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Blog

Does a Startup Have to be Disruptive to Succeed?

Mihir Gandhi

The history of the human race is littered with examples of disruptive innovation and the subsequent progress it initiated. It’s a key ingredient in the progress recipe, but the dish isn’t necessarily ruined if you leave it out.

Disruptive Technology

The term ‘disruptive technology’ was first used in 1995 in a published report by Harvard Business School professor Clayton Christensen. Christensen described ‘disruptive technology’ as a breakthrough that significantly changes at least one thing in a particular market. Later, however, Christensen changed his thinking, and modified the term to ‘disruptive innovation’. Technology itself isn’t necessarily disruptive, he said, but how businesses put it to use is.

Disruptive Innovation

True disruptive innovation is quite rare. Sustaining innovation is much more common, and it’s what 99 percent of all business activity is based upon. The advent of the Internet is an example of disruptive innovation. Minor improvements in model versions, such as the iPhone6 after the iPhone 5, are examples of sustaining innovation. Both are important.

How to Tell if Your Startup is Disruptive

The distinction between disruptive or non-disruptive is often subjective, and opinions vary depending on perspective. Here a few things to look for inside your own startup.

  • At least one competitor is unhappy: Your success will have a dramatic impact on theirs. They see you as a threat.

  • Your business model is brand new: You’ve figured out how to be at least ten times faster and cheaper. You are scalable enough to dramatically drive demand up and prices down.

Success Without Disruption

Now back to Christensen. Not to worry if you don’t see your startup as disruptive after all. There is a place for non-disruptive business too. Christensen says that many companies innovate more quickly than customer needs actually evolve, and they end up with an offering too complex, to costly, and too advanced for the current market.

Sure, some investors out there are only looking for “that next big thing”, but others will value the sustaining innovation approach as a slightly less risky investment with a slightly higher potential of return. In some cases, you may just attract more investment with this non-disruptive approach.

When you’re ready to bring investors on board, let VerifyInvestor.com help you abide by federal laws that make it mandatory to verify your investors are accredited.