In recent years, ‘disruptive innovation’ has become a guiding strategy for companies ranging from the whiteboard stage (early) to the ‘white hair’ stage (very mature). Disruptive innovation dictates that companies (or products) upend existing markets not by trying to out-innovate existing players to cater to high-end markets, but rather by simplifying their offerings to make a highly accessible product that reaches a broader market.
We’ve seen countless products arise from disruptive innovation, and we may not even realize it. Amazon, Goodyear, Caterpillar, Instagram, and Canon are diverse examples of companies that have followed this path to great success; now, Learn to Win strives to follow the same path to disrupt the learning technology sector by democratizing skills development and training, making it available and accessible to all.
So, how does the disruptive innovation model work? How has Learn to Win used the approach to stand out as a disruptor in the training and learning space?
Below, we’re diving into the two types of disruption and the requirements for this kind of innovation. We also address how brands are integrating this strategy to transform the future of everything from media and automotive industries to employee coaching and military training.
What Is Disruptive Innovation?
Disruptive innovation is a business term introduced in 1995 by Harvard professor Clayton Christensen. When Christensen first introduced it, he proposed a new way of thinking about innovation-driven growth for businesses.”One of the most consistent patterns in business is the failure of leading companies to stay at the top of their industries when technologies or markets change,” Christensen and his co-author, Joseph Bower, wrote.
The root issue behind leading companies failing to stay on top, they argued, boiled down to disruptive innovation–innovations that re-shaped competitive landscapes by undermining sophisticated products or services with products that were more accessible or more affordable. By becoming a more attainable option for ‘the everyman’, disruptive products and companies replaced legacy competitors who historically had a stronghold on the market.
Common to disruptive innovation stories is a disruptive technology that enables a market transformation in the first place. A commonly cited example in Christensen & Bower’s seminal paper is the early days of disk storage wherein smaller, cheaper increments of disk storage became possible. Small, low-end disk makers were rejected by businesses who needed more storage faster, but individuals who were using home computers for the first time gravitated to those offerings. Years later, the industry leaders in high-end disk storage like Winchester are long-forgotten, but the disruptive innovators of the era, Seagate and Connor (Compaq) are remembered.
As Christensen & Bower describe it, the disruptive innovation process usually starts at the bottom of the market. Counterintuitively, this strategy allows companies that are disregarded as ‘cut-rate’ to gain a foothold with users uninterested or unable to buy top-of-the-line products; over time, these ‘cut-rate’ companies move up and scale until it outperforms competitors long established in their niche. This is the case of Toyota, as we will explore below.
This approach is the opposite of sustaining innovation (building more sophisticated products and charging more for the biggest, best, and fastest tools), which is the temptation of most well-established companies. They believe they became ‘great’ through innovation, so they would stay great the same way. They pick core competencies, triple-down on them, and become ‘industry standard’ for die-hards and experts–all the while, basic users are priced out or overwhelmed with features/functionality they could never utilize. It’s the $44,000 brand new Harley Davidson, which misses the delivery driver who just needs a $4,000 scooter to weave in and out of traffic.
In a competitive market, disruptive innovation is a good thing. It keeps legacy enterprises on their toes.
Types of Disruptive Innovation
Before jumping into case studies, there are two types of disruptive innovation: low-end disruption and new-market disruption. The names give a bit away about how and where these disruptions happen in the market, but here’s a better breakdown:
Low-end disruption utilizes a low-cost business model. A company will enter a market at the bottom, claiming a new segment with little to no incentive profit-wise.
Established companies aren’t willing to invest time and effort in this market space. They know it won’t make their money, which leaves them focusing on different market areas. That oversight allows newcomers to shine.
The products that come out of this kind of disruption are usually described as “good enough” since they are low-cost. However, these products don’t stay this way for long. They slowly move up and into the market as they scale.
Airbnb is an example of low-end disruption. The platform started as an air mattress or couch rental service for out-of-town conference-goers. Today, you can rent out luxury villas, 5-star hotels, and unique stays like treehouses and glamping yurts on this global travel accommodation and home-sharing website.
The other kind of disruption we see in the marketplace is new-market disruption. Here, businesses create a whole new sector in a market rather than start at the bottom of an already established one.
A new-market disruption occurs when someone takes products or services that were once out of reach (whether access-wise, price-wise, or sophistication-wise) and transforms them into something that is accessible to a much broader population.
The main difference between low-end and new-market disruption is that, with new-market disruption, you’re creating an entirely new market. There’s no one to compete.
With low-end disruption, you’re simply gaining market share against original market players by trying to attract the population they failed to secure.
Back when it first launched, Apple’s iPhone was a new-market disruption. There wasn’t a phone out there like it that could connect phones, music, the internet, and countless functional apps.
Understanding Disruptive Innovation
The key to success in disruptive innovation is marketing a new and improved product to a previously non-targeted or non-attracted audience. It takes advantage of gaps in the market to serve the underserved with something far more accessible than anything it has seen previously.
Learn to Win strives to exemplify the principles of disruptive innovation in its approach to industry training. The easy-to-use platform democratizes the technology and ability to up-skill and sharpen current skills through mobile-first technology.
By combining established components (content, quizzes, analytics) in new ways, slimming down the offering to solve specific problems (new product rollout) instead of systemic problems as a Learning Management System might (mass enrollment across 25 campuses), Learn to Win seeks to breathe innovation into a somewhat slow-moving industry.
This is effectively what Christensen describes in The Innovator’s Solution where he expanded the topic in greater detail. In its most simple terms, disruptive innovation or technology is something new that has not been seen before in a particular way or at a particular ‘sophistication’ level. The internet was once a disruptive innovation itself. Many companies used the technology from the internet to create new markets that previously did not exist, such as Facebook and Amazon.
Examples of Disruptive Innovation
Examples of disruptive innovation are all around us, whether we realize it or not. Some of the very things we rely on so much each day are a product of disruptive innovation.
When Toyota first entered the US Market in the 60s and 70s, they entered without the fanfare of a Tesla, but they eventually gained traction by offering small but affordable cars more accessible to housewives and college students–people who were often relegated to driving used cars and hand-me-downs.
Eventually, Toyota started moving up the value chain. It gained a stronghold on the market and began competing with other sectors such as luxury cars with its sister brand, Lexus. Now, Toyota is synonymous with quality, and their cars are widely known for their ability to retain value for decades.
Netflix came in when DVDs and VHS tapes were still king. At the time, people were still renting from movie stores such as Blockbuster.
They took a much different approach, gathering an extensive catalog of DVDs and allowing customers to browse this selection. Subscribed users could choose what they want without the worry of inventory, getting their choices mailed directly to them promptly.
Today, Netflix has evolved into an on-demand streaming service and a content production house that spends billions of dollars a year to bring fresh content to its streaming platform. Their original innovation, though, was something small: allowing multiple DVD rentals at once for low costs and eliminating ‘late fees’ that Blockbuster charged.
Learn to Win
Learn to Win disrupts traditional learning management products (which are powerful systems built primarily to manage, not deliver learning) and old school training methods (‘sage on the stage’, ‘spray and pray’, and ‘put-your-stapler-on-the-keyboard’ e-learning) by bringing a simple, engaging, mobile tool to experts and their learners. This is an example of low-end disruption.
Baking difficult-to-understand cognitive science and pedagogy (science of learning) principles into the product, Learn to Win makes wonkish best practices in learning accessible and achievable by anyone with subject matter expertise. For example, difficult to execute active learning principles are hard-coded into the product, which increases accessibility to novice trainers. This is an example of new market disruption.
Innovative disruption comes in all shapes and sizes, from cars to apps, to learning platforms. And what makes these products and services so successful is the way they rethought their markets and products to sneak up on sleeping giants.
Toyota cars upended Chrysler to become the most popular and reliable in the US. Netflix upended Blockbuster to be the #1 source of movies and content globally. Learn to Win strives to upend learning tools that focus on administration rather than point-of-delivery learning.