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Phases of New Market Disruption

When does new market disruption occur?

As one type of disruption, new market disruption has a unique measure of success. Usually the new market disruption occurs when a specific product or service addresses an opportunity for consumption in an existing category. In other words, market disruption by a new product or service happens when it is given to customers in a way that the incumbents have not, presenting a partial or whole new model.
New market disruption is also known as cheaper and available in more places, countries and even languages. But what is the main drive that intensifies the sphere of disruption effect by a new product or service?
The inability to use existing products in a specific desired way. In other words, customers who can not use a product or service as it is presented, in a new way which they decide they prefer, will most likely prefer an alternative over it.  So as soon as a new product or service enters their awareness, the incumbent risks loss of a segment of their users.

The phases of new market disruption

Steven Sinofsky, Board Partner, Andreessen Horowitz and Des Traynor Co-founder intercom.io use the same terms for the 4 stages of disruption.  They are:

  • Disruption of Incumbent
  • Rapid linear evolution
  • Appealing convergence
  • Complete re-imagination

New market disruption obviously happens in new markets and involves stages, from its beginning to the end.  But we suggest that there is an additional stage; that of:

  • Partial imagination (please see below)

Disruption of incumbent

The initial contact in which the conversation about disruption happens (ex. the moment the iPhone took over the BlackBerry as the ultimate business phone).

Rapid linear evolution

Once the disruption is evident, the innovation takes place on the marketplace, creating a successful trajectory and developing the product or service in an utterly disruptive force.

Appealing convergence

The need of replacement of the incumbent product or service and the point from which the disruptive force undergoes a subtle redefinition (waking up to the capabilities of a new product that may additionally disrupt the marketplace).

Complete re-imagination

Just like the birth of the Internet, the digital photography or the new forms of transportation, a complete re-imagination is essential for a product or service to finish the phases of disruption – resembling and even making the previous disruptive technology to be a legacy.

Partial imagination

But, in many instances only a partial re-imagination or partial imagination will occur.  This can be because:

  • The incumbent successfully or partially successfully defends their installed base (remember the old saying … never underestimate the power of the installed base)
  • The startup intending to accomplish the disruption did not imagine its desired result well.  Or, it does not execute in an optimal way and thus partially or completely fails.  Or, in essence just gives the incumbent time to defend itself successfully or partly successfully
  • Some combination of the above
  • Other market factors or reactions by other players interfere in a way that positively or negatively impact the attempted disruption or its sphere of disruption effect

This partial imagination stage may be followed by a complete re-imagination phase; or not.

Notes

  • Price does not create disruption by itself
  • Disruption can occur very quickly, or at any other speed.  Over time the size of the sphere of disruption effect will distort and change; and the fuzziness of the periphery will also change
  • Change and disruption are not the same
  • A successful business is not necessarily disruptive
  • As shown in a listed reference, Steven Sinofsky of Andreessen Horowitz suggests that “the response and emotions to undergoing disruption are analogous to the classic stages off grieving”; Denial,  Anger,  Bargaining, Depression, Acceptance

Conclusion

In the end, the big truth is – product and services do disrupt (or partially disrupt) and are doomed to be disrupted (or partially disrupted). However, the product/service development is a social science without any laws of nature. Without any laws of nature and with (not always) comfortable patterns to follow, launching a disruptive product/service is a form of uncertain change – one that a new form of technology (or other factors) brings to the industry.  Think of distorted “spheres of disruption effect” with fuzzy edges when you try to think through potential scenarios of change.

References

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