Over the past four years, I’ve been mentoring at various incubators in Greece, teaching “market research for startups” and assisting both young and older individuals in establishing businesses. In this context, I’ve collaborated with and supported over 50 startups and must admit that I’m weary of hearing the term “disruption” in business idea presentations.
In Greek, “disruption” refers to market disturbance. In the business realm, it signifies the change and shake-up brought by something new and fresh to long-standing practices.
The term “disruption” was coined by Clayton Christensen and refers to a revolutionary change that “disrupts” the existing market or industry. This could be a new payment method, a different delivery approach, or a novel way of using a product. The core idea is that a company aims to change everything in the market.
Disruptive companies typically develop technology to alter how people use products or services, making life more comfortable or efficient. Examples include Uber in transportation, Airbnb in accommodation rentals, and Netflix in entertainment.
This eagerness among startup founders to shake up the market, coupled with their certainty of success, always concerns me.
I believe this stems from a “sick” atmosphere in the startup ecosystem that forces them to seek the “holy grail” to attract investors, rather than simply trying to solve a problem.
There’s a mania and anxiety to raise funds quickly and achieve overnight success, leading them to chase the wildest and perhaps most useless ideas they can conceive.
And I say “useless” because if the consumer doesn’t want or need what you’re selling, they won’t buy it.
They forget that the market decides which application or product will bring about disruption. Users will determine if something you’ve created is revolutionary and will change everything, not you.
Often, the market labels something as disruptive even if the startup founders didn’t envision it that way. This happens because users found a way to use it that changed the product’s market overall.
Facebook might have started as an application for students to rate their classmates’ attractiveness, but its use and evolution turned it into one of the world’s largest companies, encompassing nearly every human activity.
The ecosystem needs to change. We shouldn’t pressure startups to become the new and innovative company that will change the market and the world, but rather a company that has identified a problem and has a solution.
This way, we’ll create the space many scientists need to develop products and services without the pressure of disruption and see later if the public labels it as such.
Let’s always remember that the race towards disruption has many obstacles, such as:
- High Capital: It takes a lot of money to change the market, especially in a short time.
- Uncertainty: Even if a startup manages to disrupt the market, there’s no guarantee it will be profitable and not incur losses.
- Competition: Very quickly, other companies will try to copy you and profit from your effort.
- Legal Barriers: Often, these efforts face legal obstacles or regulatory challenges as they attempt to change existing regulations or industry sectors.
The latter is a significant problem in the Greek market, which has many constraints and safety valves that leave little room for such efforts.
However, the above doesn’t mean that startups shouldn’t strive to be disruptive. It just needs to be done with proper planning and preparation, and not as an end in itself.