The Impact of Disruption
During the early days of the startup boom, “innovation” was the watchword of the movement. However, in recent years, as more and more startups have cropped up around the world, and as the startup scene became more and more competitive, “innovation” evolved into “distuption”.
This change marked an evolution in the entrepreneur mentality, which meant that merely developing a product or a service that was a new twist on an existing technology was not enough to survive, much less thrive, as a startup. Nowadays, startups must strive to build something that is not only new, but also completely overthrows, overhauls, and in some ways, “overkills” the status quo of existing markets.
And, as you would imagine, disruption does not come without consequences; some would even say collateral damage.
In this excerpt from the book, Disrupt You!: Master Personal Transformation, Seize Opportunity, and Thrive in the Era of Endless Innovation, author and Founder Institute Mentor Jay Samit explains the various ways disruption has impacted the world, from some of the earliest uses of technology to our modern industries.
In first-century Rome, an innovative glassmaker created vitrum flexile, flexible glass. Proud of his invention, he requested an audience with Emperor Tiberius. The emperor threw the drinking vessel down on the ground, but, much to his surprise, it did not shatter. At the time, all drinking vessels were made of gold and silver, which tainted wine with a metallic taste. Considering the glassmaker’s creation, Tiberius realized it would completely disrupt the Roman economy. If goblets were no longer made of gold and silver, the value of the precious metals would diminish immeasurably. Tiberius asked the glassmaker if anyone else knew the secret formula. When the inventor took a solemn oath that he alone knew how to create vitrum flexile, the emperor had the man beheaded.
Today, it is not so easy to thwart disruption.
The business headlines will tell you that the world has become a scary place. Advances in 3- D printing that create just-in-time inventory threaten the jobs of 320 million manufacturing workers around the globe. Self-driving cars, trucks, and drones will displace tens of millions more workers. Renewable energy, such as solar photovoltaic cells, which have decreased in cost by more than 85 percent since the year 2000, will shift the geopolitical future of nations whose economies are supported by fossil fuels.
According to a recent McKinsey Global Institute study, the automation of knowledge work will have a $5 trillion to $7 trillion impact on white-collar jobs. Ecommerce and productivity gains in delivering retail goods are expected to further reduce the number of retail stores by as much as 15 percent. What is the real estate value of a mall, factory, or office building when its purpose is made obsolete? America’s workforce is now dealing with the realization that even though the recession is over, it has been a jobless recovery.
This era of endless innovation has resulted in large multinational corporations shedding more than 2.9 million domestic jobs since the recession, and the pace of change is only accelerating. It seems that whenever reporters, news anchors, pundits, and economists discuss this rapid pace of change, they throw around the word disruption, often employing the language of warfare — destruction and disorder. As generations-old companies and once valued brands and businesses are displaced by nimble, efficient new startups, we’re led to believe that disruptive new technologies have given the dogs in our dog-eat-dog world a powerful and violent strain of rabies.
The disruption characterizing our current business landscape goes beyond innovation — and there is a difference between the two. Take the mighty sword, for example. Men have been fighting with swords for over five thousand years. Early bronze swords were lethally sharp, but, given the weak tensile strength of bronze, they had to be short in length. The innovation of steel and other alloys allowed the sword to grow in length, broadness, and societal importance. Skilled swordsmen became the defenders of kings and kingdoms, and the sword became the symbol of liberty and strength. Innovation therefore consisted of how each new culture and generation improved upon swords, changing how they were forged and how they were wielded in combat. But one of the great Hollywood adventure movies, Raiders of the Lost Ark, provides the perfect illustration of how disruption works. When Indiana Jones is challenged to a duel by an Arab swordsman flamboyantly waving his massive scimitar, Indy nonchalantly reaches into his holster, pulls out a revolver, and shoots the swordsman dead. With the presence of the pistol, the sword was made obsolete. Disruption is to existing businesses and business models what Indy’s Smith & Wesson was to the sword: it instantly changes the way the world functions and the course of history.
Disruption is almost always led by a technological change. But disruption’s impact extends far beyond the technology industries. True disruption alters a market or system forever. The DVR, for example, didn’t just change how we watch television; it upended the entire advertising-supported television business model of the previous fifty years.
But just as early man progressed from the Stone Age to the Bronze Age to the Iron Age, each disruptive technology will itself eventually be disrupted. In the twenty-first century, billion-dollar industries can be disrupted and waylaid virtually overnight — no sector of commerce or government is immune to the threat.
Yes, the pace of disruption has increased exponentially, thanks to a confluence of disruptive technologies that change how we work, communicate, travel, learn, and age. A century ago, having a few thousand customers for your product made you nationally known to America’s seventy-six million citizens. Now, over six billion potential consumers are just one click away from becoming customers. Cloud computing, wearable technology, 3- D printing, and the Internet of Things may just be abstract concepts to you today, but the impact they will have on your career and fortune is inevitable.
There are fortunes to be made by identifying and exploiting the smallest aspects of these seismic shifts in technology and business organizations. Executives at Gulf Oil didn’t have to know how to design or manufacture automobiles in order to recognize the growing demand for gasoline in 1913; they just had to satisfy the consumer’s needs, so they created the first drive-in gas station. Today the world spends $2.5 trillion consuming petroleum, and oil companies account for five of the world’s top ten revenue- producing companies. To financially benefit from technology changes, you don’t need an engineering degree or an M.B.A. To survive and thrive in the era of endless innovation, you merely need to think like a disruptor.