Disruption No Longer Works. Here’s Why
The Davids deserve their credit, but the Goliaths are long gone.
Disruption is the new agenda of the startup world. Most venture capitalists hunt for the next team of five geniuses who will cannibalize Facebook, Apple, Netflix and Google (FANG).
Top names already burned two billion dollars on Quibi that pitched YouTube and Netflix as the old. On this quest for a cheaper, faster, and better economy, we pledged to bury nine of every ten startup battalions.
Our justifications stem from the history of technology itself. We easily rationalize our investment strategies as evident for the days when personal computers were taking over from the mainframe computers and Google was kicking Yahoo! out of relevance.
It is true that Facebook took MySpace and every other company out of its space. And word processors helped us forget the painful days of typewriting. In the world of mobile operating systems, Android and iOS beat Microsoft in its home game and stole the market from both Symbian and Java.
Many of these disruptive innovations were not only cheap—they were also free. They were remarkable, created more value, and took us all by surprise.
These Davids truly deserve their victories. New insights, better algorithms, more intuitive designs, and innovative business models all contribute to the planetary alignment that created the new world order and the technology mammoths — the new Goliaths.
Goliaths are long gone.
It is a world of Davids. The Davids that killed Goliath(s) are the new kings. Like its biblical allusion, they have no battle to lose. The new leadership of the new reign were earned through sweat and blood, they were all David by birth and many stood strong to remain David.
As Malcolm Gladwell brought to the forefront of his narrative in David and Goliath and enlightened us, the biblical Goliath was disadvantaged by sight. The new ones retained not only their sight but with their hindsight, insights and foresight.
Google has vehemently kept her simple design and pushed it even further. Apple is not relenting in coming up with new and exciting gadgets. Netflix contents and business model attune swiftly to reality. Facebook buys off every corner the market shifts its attention. Amazon shopping recommendations get better as its age. Alexa and Google Assistant can only learn to improve with more data collection and users’ privacy at their disposal.
These giants cracked the code of nimbleness and garnered forces to repel all invasion.
So can you be cheaper than free?
What does it cost you to know who is leading the presidential election, type the phrases to any search bar, or speak your mind to the mic Google does the rest.
How about a Facebook, Instagram or Twitter account? A simple sign up form.
I think you have a way to make your YouTube free without the ads and serve better content than Netflix with half the subscription dollar.
It is ridiculous how much cash the giants are seating on and one may be tempted to assume that it is easy to let go of all the big profits to make it cheaper. Such ambitious goals are clearly out of reach.
The value these giants have created is based on billions of dollars of capital funding and the consequential deployment of such investments into continuous research and development. Remember the Amazon early days frugality and leanness and how long it took for the trillion-dollar giant to gain its spot.
Cheap has ceased to be an effective strategy for successful disruption.
Right after the acquisition of the distributed version control and source code management company, Github, Microsoft introduced the free team and unlimited private repositories and slashed the pricing across all other plans. These strategic pricing moves further bury similar companies in its space such as Gitlab, Bitbucket, and Phabricator to dark space oblivion.
So disruptor has switched gears to focus on some other words in their tricolon. Could it be: faster?
But can you be faster than flash?
New team management philosophy has drastically marked up the once existing lacuna in the release window of big companies. More than ever, teams of varying sizes are embracing the thrash early and ship often mantra.
With wider adoption of the Continuous Integration and Continuous Development, there is always an update waiting for you in the stores for Android and IoS users alike.
There is room for fully autonomous small intrapreneurial teams, even in the biggest of tech giants, who quickly spot opportunities and don’t need a long queue of assessments to get on the job and start coding up the future.
It is remarkable how the tech team at Instagram swiftly counter external forces. First, it was Snapchat and the battle for stories and highlights. Again, they slapped TikTok with Reels over the fight for who dominates the quick video market.
Airbnb quickly reshaped its business model to cater to the COVID pandemic and economic turmoil. Complete remote working environments were promptly rolled out to cater to their workforces. Bugs fixes are way more frequent than ever.
These are clearly pointed to how fast even the biggest response and shift to new realities surrounding the market.
What does it mean to be better?
The argument for better is resounding. It is sometimes evident that Google was way ahead of Yahoo and Facebook does social networking better than MySpace.
But the new reality does not give room for a listening ear. How do you sell your more accurate, efficient, and not-spying search engine to the billions of searchers that are chronic addicts of Google?
To many, Google is the ultimate fact-checker. Are you going to place your ad on the very first page of Google that people will instantly realize you are superior?
There again, you still need to pay Apple something far north $20 billion dollars to ensure you are made the new default search engine on their gadgets. Simply forget the Android operating system because that is not happening even in your dreams.
The argument for better has always been a marketing stunt. It is who tells the story better. How do you even tell the story when all the podiums are owned by the giants you look forward to sweeping out of the talk.
Is this the end of startups?
No.
There are more than enough bounties in the market for those who can till the ground rightly.
Startups are still the future across all continents, countries, and colours. Far more bright startups are still in the making and many more will sprout around the world to shape the future of the world for the better and create values for all quarters.
The core message here is not to forgo all startup dreaming but rather a clarion call for startup founders to quit their disruption agenda especially in terms of existing new tech giants.
Here are the ways I think we can go about startup up building profitably
Disrupt the ancient
There are still more monotonous traditional non-changing institutions and processes for bold and courageous entrepreneurs to make a mark and recreate the entire industry.
MasterClass and Edlyft are looking forward to changing what it means to have an education. Airbnb and Uber reinvent our understanding of the logistics and transportation industry.
Many of the processes in legal, finance, taxation and governmental institutions demand critical reform and engineering.
There is still far to break down and rebuild in these sectors.
Go zero to one
Vertical progress is extremely hard. Going from zero to one is not an easy read as Peter Thiel’s book.
Imagining the future to see what is missing is not an easy ride. Only a few have the depth of expertise and imagination to see autonomous vehicles and space shuttling as a necessity of the future like Elon Musk.
But I strongly believe it is a stunt we can all pull even if it is once in our lifetime. Or possibly as many times as the geniuses like Jack Dorsey of Twitter and Cash App.
Build an army for David
You can be the Stripe for Africa like Paystack or Shopify for Africa like KitCart.
You can create whatever it is. Whether it is of the same standards or you consider it better than the old but not with the intent of taking the giant head-on.
In fact, it should be part of your core strategy to hope for an acquisition by the giant uncle. Of recent experience, PayStack tops the mind with a whopping $200 million acquisition.
Target the M&A department, Google tops the chart with over 200 companies and Apple half that number in the acquisition. You can position yourself as the next hot Startup to gross a few million or billion bucks from any of the tech giants.
Instagram, WhatsApp and Snaptu are a few of the names that bite from the Facebook surplus.
Forge weapons of mass importance
If you come up with brilliant features ideas Shopify is missing, it is not efficient if you think those are your license to start a company to take on and disrupt Shopify.
Consider how almost impossible it is for you to capture one of Shopify's finest clients who powers a huge part of the corporate revenue.
The real problem is data migration and trusting a newbie as your company to handle their infrastructural needs because of three cool new features Shopify will probably roll out a month after a high-end client request for them.
It is best you develop these cool features ideas into an app or series of apps for the Shopify App store and thus monetize them.
I am not of the opinion you should play your entrepreneurial journey on a safe paddle, I am much particular about the need to be practical in your pursuit and spare the world another post mortem of a failed startup.
Final thoughts
The world of startup building has changed. The old trick of disrupting with cheaper, faster, and better products no longer holds.
Standing tech giants have built their proprietary technology to be self-sustaining, the teams are more agile, the ever exploding network advantage and brilliant business models continue to reinforce their dominance. There are whole new dynamics to startup building.
