Billions through disruption

innovationIn summer of 1935 Allen Lane changed the way public thought about books forever. He did this by bringing out paperback versions of writings of Ernest Hemingway, André Maurois, Agatha Christie and the likes. This was a big move during the times when owning a book was for the classes and even if you had money to buy you could not find a bookstore close enough to make a convenient purchase.

Allen Pane was not the first to publish a paperback; but he was the first to bring out quality work on quality paper. His version of paperback was priced at six pence each. During first year, 3 million such paperbacks were sold in a country with a population of about 38 million. Soon there was a Penguin (the company Pane founded) Paperback in almost every home with love of reading.

You all, lover of big ideas and dreaming of making millions or billions; can you do an “Allen Lane”? Can you bring about a disruption like that? If you are able to do that you will fulfill your dream and be able to reach out to a large population.

Technology industry is replete with companies that made their business based on disruptions they brought about – Netscape, Google, Facebook, and EBay etc. But technology is not the only space where companies have used disruption to make improvements and win market share. NetFlix did it with DVD rental business and zoomed past Blockbuster. Pixar did same with animation. Look what Cirque du Soleil did with their unique mix of circus art and street entertainment. Openness can create disruption. MIT did through their open courseware (OCW) initiative.

Single individuals like one Salman Khan of Khan Academy are creating disruption and showing the world a new path through the way he teaches – harnessing the power of technology.

For Walmart it began with “we sell for less”. Heineken has done it with DraughtKeg.

Why think about disruption?

Because that is where there is real money and growth. In today’s fast paced world it gives companies a chance to stay in business, gain new ground and move ahead of competition. New entrepreneurs and enterprises thinking of entering into market – gain a perspective on creating better products than what exists in the market.

Think about better delivery, better pricing, better ownership experience – and you are in for a large scale disruption in existing product categories or the real bonanza – the creation of a new product category.

Where to drive innovation through disruption?

It is about creativity, understanding of market dynamics. Innovation can thrive in most unlikely of places. It can be done in a space where people least expect.  Those on a cautious path can do it as an experiment. Possible areas where mass can be benefited like – healthcare, power, automobiles. Few more ideas;

Food and food services: Think of a restaurant where people can invite their guests and join the chef couple of hours earlier to cook themselves. Think about a healthy food alternative for travelers – light to carry, can be mixed with cold water, to make a complete meal that fulfills all requirements of body. Go to the jungles (or hire somebody to do it for you) and find a food with same nutritional value, size, ease of carrying as almond.

Education: Think of a weekend school for adult learners where students take turn to teach and be taught with participation from across the world (web-enabled).

Technology (Human-Computer Interaction): What about a computer screen that changes illumination depending on the light in the room or place where you are using it or a computer (notebook, iPad) screen which can be used in bright sunlight especially for the lovers of beach.

Web: A medium like web is highly disruptive that is why huge opportunity lies there. Think about faster apps, mash-ups, market places, aggregators of content. Look back in the history – see how it has progressed so far – directories, search, social networks, what next? Think about it.

How you can do it?

Can your business help from this idea? Can you think of a similar intervention where masses are benefited?  You can make these billions if you do something like what Allen Lane did. He changed the price point of a product providing similar experience as the higher priced product (Hard-bound books). Allen Lane did it with books when he brought the contemporary writing and classics at a price point to enable easy access for masses.

How to create disruption?

Keep your ears and eyes open: It is good to live an alert life and not as a zombie. It helps you in every walk of life. The idea is not to try and poke our nose in everything that we come across. But it is good to have a holistic view of things that interest you.

Think about the possible change: How can you make a product better? Can you offer same or better quality at better price? Can you deliver it better? Can you offer an exceptional guarantee (think Zappos, 365 days return guarantee and both way shipping by company). So innovation can be on quality, price, delivery, and ownership experience – any aspect of the product which customer can see value in.

Do not always think price: It is good to be a premium priced product or to charge a healthy margin. But if there is a compelling reason or a big opportunity for disruption based on pricing then no harm in pursuing it.

Think big, think to innovate: The promise of long-tail and power it has given in the hand of individual producers of products and services – makes sense for many. Still there are ambitious and tremendously capable souls of 21st century – who live with dreams of making hundreds of millions and billions. Good. It helps to be true to oneself. To fulfill such dreams – you need a product, service with a mass appeal; and you should be able to deliver it efficiently. Research, exploration all contribute to disruption.

What is in it for you?

An opportunity to make billions (potentially): Those who create big disruption are talked about and if they convert this disruption into business proposition – then they are in for a lot of wealth in a short span of time.

Chance of reaching out to the world: This has bigger implications. Think about all the dollars following social causes – working on eradication of hunger and disease. If a disruption can reduce the cost of a vaccine into half then the impact of same dollars will double. World will be a better place with effective but cheap vaccines; clothes to save poor from heat and cold and with One Laptop Per Child (OLPC).

What can businesses do?

Can you increase the reach and profits by keeping the value intact and decreasing the price. It can in fact save an entire business or help it take a lead. See what Heineken did with DraughtKeg; it has helped it find it a unique position in premium segment – getting better margins and less undercutting based on price by players like Budweiser.

Future

I foresee a possibility of a worldwide distribution super-way; where everyone can put their stuff up for distribution at the cost she wants.

Long tail and web has given the power in the hands of people to produce and distribute. But the mechanism can be made more efficient. It will probably need a core – in an open source environment – which will provide foundation and execute suggestions just for the fun of doing it or for name, fame or possible wealth. There will be evangelist, do-gooders, opportunists and some people trying to pull down the system like in every great cause; but the market will take care of them. This will take time but may be a reality sooner than we expect.

Till then distribution platforms like iTunes store and marketplaces like Amazon will rule the roost. All stakeholders will have to be happy with the guidelines of these behemoths. Guess, most will be happy till they get their fair share.

Nothing in this world is permanent. Old always makes way for the new – by choice or by condition. As we go along their will be takeovers, tie-ups, partnerships and mash-ups. Who knows Facebook will offer some intelligence to Amazon – which may use it to power its recommendation engine.

Have you noticed an area where disruption can help your work and make a mark? I am very keen to listen.

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