DISRUPTIVE

TECHNOLOGY

Adjunct Professor Wesley

cvwesley@rhsmith.umd.edu

Copyright 2009
 Properties of Disruptive Technology?

Versus Sustaining?

Enable new value props & apps, mass, non-consumption.

Worse Price-Performance early on; Apples-to-Oranges.

Change Work Practices, Processes and End-user Behavior.

Redefine Industry Drivers, Value Chain and Business Model.

Eventually Marginalize or Obsolesce the Sustaining.

The Confluence of Failure Cured by Successful Innovation.

Copyright 2009
 Disruptive Technology & Innovation

v Versus sustaining technology?

o Disruptive is a term of Relevance; i.e. as compared to what?

v Enable new value propositions, applications and mass markets

o Faster and Better and Cheaper; Broaden viability and affordability; Non-Consumption.

v Worse price-performance, early on; traction with non-consumption

o Old metrics do not apply; apples-to-oranges comparison, often standards of Quality redefined

v Tend to redefine work practices, processes and end-user behaviors

o Change in Utility; Social and Cultural shifts,

v Often redefine industry value chain and incorporate a new business model
o Turns value drivers and value capture on their head.

v Eventually obsolesce or marginalize sustaining technology, products, process

o start at the bottom and work their way into the mainstream, relegating the sustaining to a niche.

v Often the confluence/convergence of old spawning whole new

o Technologies commonly invented by disruptee yet commercialized by disruptor

Copyright 2009
 Is Digital Music a Disruptive Technology

Versus sustaining technology?

CDs, MP3 versus analogue music: i.e. cassettes, 8-tracks, vinyl records

Enable new value propositions, applications and mass markets

Digital distribution: immediate fulfillment, purchase by the track, sample, playlists

Worse price-performance, early on; Traction with non-consumption

switching costs, setup, learning curve, marginal cost, poorer fidelity, restricted to PC

Tend to redefine work practices, processes and end-user behaviors

Obsolescence of physical media (e.g. tapes, platters), share with friends

Tend to redefine industry value chains and key drivers

Few retail music stores, e-commerce model, integration/packaging with players

Eventually obsolesce or marginalize sustaining technology

We just do not see most media, and hardly even early digital such as CDs

Often the confluence/convergence of old spawning whole new

Music + Movies + Books + Apps

Copyright 2009
 Exercise

Is the Wireless Internet

A Disruptive Technology?

Copyright 2009
 Properties of Disruptive Technology?

Versus Sustaining?

Enable new value props & apps, mass, non-consumption.

Worse Price-Performance early on; Apples-to-Oranges.

Change Work Practices, Processes and End-user Behavior.

Redefine Industry Drivers, Value Chain and Business Model.

Eventually Marginalize or Obsolesce the Sustaining.

The Confluence of Failure Cured by Successful Innovation.

Copyright 2009
 Disruptive Technology & Innovation

v Versus sustaining technology?

o Disruptive is a term of Relevance; i.e. as compared to what?

v Enable new value propositions, applications and mass markets

o Faster and Better and Cheaper; Broaden viability and affordability; Non-Consumption.

v Worse price-performance, early on

o Old metrics do not apply; apples-to-oranges comparison, often standards of Quality redefined

v Tend to redefine work practices, processes and end-user behaviors

o Change in Utility; Social and Cultural shifts,

v Often redefine industry value chain and incorporate a new business model
o Turns value drivers and value capture on their head.

v Eventually obsolesce or marginalize sustaining technology, products, process

o start at the bottom and work their way into the mainstream, relegating the sustaining to a niche.

v Often the confluence/convergence of old spawning whole new

o Technologies commonly invented by disruptee yet commercialized by disruptor

Copyright 2009
 Is Wireless Internet Disruptive?
Versus Sustaining Technology
fixed / wired networks
PC, landline phone, dumb phone
Vision, Positioning, Naming? : wireless datawireless internetmobile internetsmartphone

Enable New Value Propositions (anticipating paradigm shifts)

Sustaining model:
o compute, stationary, author docs, spreadsheets, slides, business-oriented
o complex transactions. www content, rich media
Disruptive model:
v "Wireless Internet a great tool to save time or kill time
v a few things a Japanese girl doesn't leave home without: her six-inch platform shoes,
some touch-up toner for her hair color of the day, and her i-mode phone."
o communicate, entertain, socialize, on-the-go
o simple transactions/bursts: sms/texting, photo sharing, email w/o attachments,
o consumer-oriented

Worse price-performance early on; Apples-to-Oranges comparison

small screen and key board, narrowband thruput, http:// super hard on mobile, incompatible
www content, crt mobile screen, data plans expensive
communicate NOT author, sms/text not bandwidth intensive, added communications channel
to voice not replacement for PC
v immediacy, responsiveness, mobility, personalization via ringtones and wall paper
Copyright 2009
 Is Wireless Internet Disruptive?

Enable whole new mass markets otherwise not served (e.g. non-consumption)
low-end consumers / teenagers.
more convenient way to procure consumables: e.g. music by the song
Apps, social media

Eventually Obsolesce the old

No more smart phones versus dumb phones, just phones...now all smart
Fixed phones almost dead, utility of PC and TV marginalized and model under siege

Confluence / Convergence of technologies spillover into other industries

Is it a a better phone? More convenient PC? Or, entirely other beast?
Smartphones likely more similar to TV / Media versus PC or cellphone
Key players in music outside newcomers
The auto aftermarket for iOS is greater than the entire rest of market

Copyright 2009
Disruptive Technology

PURPOSE?

Copyright 2009
 Past Disruptive Technologies

Past
Refrigerated Box Cars(trains)
Swatch electric watch
Personal Computer
Digital music
Wireless Internet
VoIP
Personal Digital Assistants(PDAs)
Cloud Computing
Smart phones
Apple & Google versus Motorola, Nokia, RIM

Copyright 2009
 Potential Disruptive Technologies

Genetically Modified Organisms(GMOs)

Zero Emission Hydrogen Vehicles
Recyclable Thermoset Plastic
Next Generation Robotics
Game
Artificial Intelligence Changer?
Self-driving cars Better Value Prop
Business
3D Printing
Mouse Model
Trap? Value Chain
Drones Faster Industry
New & Better Structure
Feature? & Cheaper Basis of
Competition
Faster or Better Convergence
or Cheaper

Sustaining Disruptive

Copyright 2009
 DISRUPTIVE
TECHNOLOGY

Adjunct Professor Wesley

cvwesley@rhsmith.umd.edu

Copyright 2009