Q: Must an entrepreneur create a truly disruptive technology in order to succeed?
A: Having a disruptive technology that sets you apart from the competition certainly doesn’t hurt, but it doesn’t necessarily mean you will succeed — and it’s far from being the only path to success. After all, how often do we come across truly disruptive technology?
In my experience working with entrepreneurs all over the world, the successful ones are those who know their customers and needs well and create products or services that address what their customers want in a unique way.
Whether that product or service is a “technology” depends on how you apply the term. Henry Ford’s disruptive innovation wasn’t the invention of the Model-T automobile, but the mass-production methods that lowered cost and hence allowed more people to buy cars. Entrepreneurs, such as the founding team at Tencent in China, didn’t invent messaging, but they did indeed capture the power of the Internet combined with low-cost text messaging to form one of the world’s largest mobile communication platforms.
Know your customers and meet their needs
Even in the realm of tech startups, many of the most successful businesses are using existing technologies to solve real-world problems, not inventing new technologies from whole cloth.
One great example from the Pacific North West is Porch, a network that connects homeowners with home improvement professionals, such as contractors and electricians. There were already plenty of ways to find and evaluate these providers—Craigslist, Yelp, Angie’s List and word of mouth, to name a few—but the information was scattered all over the place. The Porch team saw the need for a tailored solution -- like a LinkedIn for helping you find trusted workers for your home project --and has achieved tremendous growth by bringing together all the right information and making the process simple and intuitive. This is not to say that the company has not developed innovative technologies that are vital to its success, but Porch is disruptive primarily because of a focused central idea and fantastic execution.
The nature of success
The real question here is: “How do I succeed?” In order to answer that question, we need to look at some companies that have been unsuccessful. There are many reasons companies fail and in some cases it has nothing do with their ability to create a disruptive technology. They fail because they’re unable to find the right business model, or they’re unable to anticipate the impact of other disruptive technologies or they can’t respond fast enough to changes in customer attitude.
Take Xerox for example. Once the absolute leader in copying machines, Xerox lost market share when Canon and Ricoh introduced low-end copiers that expanded the market and chipped away at Xerox’s dominance.
The moral of the story here is that these companies had very different approaches – from business models to target audiences. They didn’t attack the incumbent head on or offer better technology—quite the opposite actually—but their approach eroded Xerox’s position in the market all the same.
To conclude, I’d say that success as an entrepreneur doesn’t necessarily mean creating a truly disruptive technology; instead, it’s the art of how you respond to disruptive technology in a way that uniquely differentiates your company from the rest. By keeping a strong focus on your customer needs and the opportunities they present you, and by using technology to give you an edge, you are definitely on the right path to building a successful business.