Monday, December 08, 2014
Good Disruptors Disrupt Themselves
In the age of digital and disruption, we can get hung up on worrying about what the next trend is that may disrupt established players or even growing players as industries change and move more rapidly than ever before. To brands everywhere: take a page out of Amazon's playbook and not be afraid to disrupt yourself. Amazon has been intentionally cannibalizing its products to draw retailers into its ecosystem with its next big disruption--drug and grocery. It has been building up this side of its business quietly for awhile, but now it is truly getting aggressive. Amazon isn't afraid to take new trends head on even if it means hurting their current strengths. They aren't afraid to pivot. Netflix is another great example... a business that completely disrupted video and film to the point of putting Blockbuster out of business to disrupting its own core offering that dethroned the giant blue-and-yellow brand by offering streaming footage instead of just its DVD delivery service. Great disruptors are not afraid to disrupt themselves when there is disruption going on around them.
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Lisa,
I think this is a great point and a strategy that most brands are terrified of doing. However, this is the best way to stay ahead of the competition. I remember when Netflix changed their business model pivoting away from DVD-by-mail to streaming video. Clearly, Netflix saw what many didn't, that internet bandwidth would only grow and that mobile devices would capture more viewing time in the future. Rather than rest on its laurels, Netflix made a temporarily painful decision to increase DVD rental cost to force users to stream videos instead. This executive decision worked out for both the Netflix and its customers. Netflix lowered its costs to buy and process DVDs and users got more reliable streaming video.
Facebook encountered similar backlashed when it transitioned from page walls to timelines. However, Facebook had a similar vision whereby content would populate a users newsfeed - to create this user experience, Facebook had to transition away from its previous look and feel. While the initial change was painful, Facebook's foresight paved the way for its very lucrative ad business, both on desktop and mobile.
I think the moral of these examples is that as barriers to technology continue to fall, more and more competitors will be entering these lucrative industries. Dominant players must use their scale and capabilities to anticipate user behavior and macro-trends. In the end, the consumer will benefit from this unrelenting push towards the future.
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