Over the last 20 years we’ve seen many household name brands become obsolete or lose market share as a result of new players in the industry. In the common business vernacular they’ve been ‘disrupted’. One of the most commonly cited examples is Uber’s disruption of the taxi industry.
Allow me to be slightly pedantic for a moment and then I’ll get on with the point of this article.
The term disruptive innovation was originally coined by Clayton Christensen, professor at Harvard Business School, in his 1997 book The innovator’s dilemma.[1] The original definition of disruption was the following:
‘It transforms a product that was historically so expensive and complicated that only a few people with a lot of resources had access to it. Disruptive Innovation makes it more accessible and affordable to a much larger population.’
Disruptive innovation is a process in which an organisation or start-up enters the bottom end of a market with a simpler and cheaper form of a product, thereby making it accessible to a whole new group of people who couldn’t afford it previously. And then ends up displacing the established competitor. The classic example is the advent of the personal computer which gave everyone access to the kind of technology that previously only large organisations could afford.
If we were to adhere strictly to Clayton Christensen’s definition, Uber wouldn’t be considered a disruptive innovation in the transport industry (as they often are) because they’re not servicing a whole new market that previously couldn’t afford or have access to this facility.
But I don’t want to get hung up on semantics. So let’s expand the definition of disruption to mean anything that is a significant departure from the way things were done in the past.
By that definition Uber could be on the verge of being disrupted. By who?
The New Kid on the Block
There’s a new player on the block. Blockchain that is. A South Korean blockchain startup called MVL(Mass Vehicle Ledger) launched a new service called TADA in Singapore last month. It means “Let’s ride” in Korean. (Although I rather like my pronunciation of TaDaaa).
Unlike Uber, it doesn’t charge commission from its drivers and is focussed on creating value for its entire ecosystem of participants rather than its investors. MVL (pronounced ‘emvel’ rather than as an acronym) provide what they refer to as a ‘trust driven mobility ecosystem’ which encompasses not just the driver and the passenger but also the car dealer, mechanic, car owner, car pooler, insurance company and any other players in the web. The currency is data which is the ‘new oil’, paid in the form of crypto coins – to players in the network. This is the next evolution of peer-to-peer platforms made possible by this new tech.
Who’s next?
Of course Uber is not the only service provider who will be impacted by blockchain. Virtually every industry will be ….. eventually. Point is – no one is immune to the threat of disruption. And the advent of blockchain is only ONE potential source.
The best way to be future-ready is to have a culture of innovation where business –as-usual is clearly identified as public enemy number 1 and where intrapreneurs are nurtured and celebrated.
Until next time
Irena.
[1] Christensen, C. (1997). The innovator’s dilemma: When new technologies cause great firms to fail.Boston: Harvard Business Review Press.
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