Disruption. From frenzied investment pitches on Sand Hill Road to the name of the top conference for startups in Silicon Valley (i.e. the people who pay my bills), that word has become synonymous with everything and everyone creating innovation today.
Yet, the communal rhetorical choice is quite peculiar. When you deeply think about it, disruption is a pretty unpleasant word to be associated with. We sigh when a schedule disruption cancels our trip to the East Coast because of another aircraft maintenance problem. We search our drawers for candles when a power disruption shuts off our lights. Perhaps the only progressive activity associated with the word is the euphemistic labor disruption (read: strike). And that is certainly not an activity that Silicon Valley appreciates.
In a strange sort of hipster anti-mainstreamism, Silicon Valley loves to place positive spins on such negative words – just look at our society’s views on the word “hacker” compared to our own. It is the ability of our startup community to redefine its reality that makes it so compelling, and yet, simultaneously so riven with flaws.
For we don’t live in the technological oasis that is so often envisioned by venture capitalists and startup founders, where objective technological superiority is always a guarantee of success. Rather, we live in a world where politics, narratives, and human relations play an outsized role, and where incumbents hold most of the cards of the deck.
It is the ability of our startup community to redefine its reality that makes it so compelling, and yet, simultaneously so riven with flaws.
That’s why our obsession of disruption is tragically ironic. It is defined by the Oxford Dictionary as “disturbance or problems that interrupt an event, activity, or process.” And really, that’s exactly what Silicon Valley does these days. For a group of self-described problem-solvers and solution-finders, we seem to have to invent a lot of problems just to be able to fix them. Only through crisis can we find progress.
How did we get here? Well, the theory of economic disruption has a fairly extensive history, but its main academic cheerleader comes from Clayton M. Christensen, the writer of The Innovator’s Dilemma, a book that is certainly at the top of the pantheon of cited references for writers of startups. Christensen posited that industries are disrupted when new entrants into a market build simpler and less expensive products that eventually evolve to compete against incumbents but at a better cost model. Incumbent companies often respond by becoming more specialized, eventually forcing them to ever smaller niches as they retreat from the wider market.
In this week’s copy of the New Yorker, Jill Lepore attempts a strong takedown of Christensen’s work, arguing that its case studies are not diverse enough for such a generalized theory, and questions many of the conclusions of the various industries studied in the book. She also points out an interesting pattern: that many of the incumbent companies assumed by the original book to be heading toward death remain at the top of their fields, while the disrupters are no where to be found.
It is a solid critique, and a much needed corrective to a text held up almost religiously by its adherents. However, it misses so much about the language of disruption that one wonders whether Lepore was effective in her critical analysis.
“Disruption,” like so many buzzwords, is a programmed idiom. These words do not just convey a concept or a theory, but also act as shibboleths, a kind of arcana to ensure that the speaker and listener are part of the same affinity group.
We have so many of these phrases in the Silicon Valley universe that it truly has become its own language, with newcomers expected to pick it up just to be understood. As an example, a first course might be “mobile-first”, “social/local/mobile”, “cloud computing”, “advanced persistent threat”, “big data”, “delightful”, “disruption”, “innovation”, “software-defined networking”, “next-generation”, “ephemeral”, “engagement”, “acquihire”, “net neutrality”, “software-as-a-service”, “rockstar”, “Bitcoin-enabled”, “3D printing”, “partner”, and, of course, “yo”.
Disruption, though, remains at the top of the rhetorical pyramid. It’s occurrence in a pitch deck or presentation is practically a guarantee, yet its meaning is deeply incoherent, and that is the fundamental flaw of Christensen’s theory. By placing his emphasis on a single type of disruption, Christensen misses the wider constellation of directions that innovation can take. Its original narrow applicability has since become so generalized and popularized that few remember that the theory has limitations.
Most “disruption” has not looked like the disk drive or steel mill industries, in which new competitors started with inferior products and then improved to (theoretically, at least) clobber the incumbents. In fact, quite the opposite has taken place in Silicon Valley. The startups that have grown into today’s household names were many times the best in their fields, and were priced at a premium rate to boot.
The startups that become unicorns … fundamentally alter the need for people to have a particular mousetrap in the first place.
Take a startup like Uber. It wasn’t a cheaper taxi service that offered a lower-quality ride, yet one that people found acceptable enough to use. Instead, it came in at the high end of the market, creating a seamless and delightful experience for users at a price well-above existing taxi services. Later, the company developed additional lower-fare options that allowed it to move down the market. It may be “disrupting” the taxi industry, but it did so from the complete opposite direction of Christensen’s theory.
Similarly in hardware, Apple’s iPhone wasn’t a low-end feature phone that evolved to compete with Motorola and Nokia but at a more competitive price point. Instead, it completely shifted what a phone experience could be, and was launched at a price point that was among the most expensive in the market. If you want a more startup-focused example, take a look at Nest Labs. Nest built a beautifully designed thermostat at a premium price point. Its thermostat didn’t disrupt the industry from the bottom, but created a new market at the top through a superior product.
This is the diversity in tactics that is missing from our general usage of “disruption.” The more accurate message is that startups can change their markets in quite different ways. The startups that become unicorns don’t just try to build a cheaper model of a mousetrap and evolve it, they fundamentally alter the need for people to have a particular mousetrap in the first place. The new market may supplant the old one, but the two bear such little resemblance to each other that it seems hard to make the connection between them except historically.
To be fair, there are certainly startups that are more in line with Christensen’s view, such as Warby Parker and its disruption of Luxottica. But even here, it isn’t clear that Warby Parker’s products are inferior to the glasses provided by the Italian eyewear monopoly.
I think that’s why Lepore’s observation that many of the disruptive companies featured in The Innovator’s Dilemma are no longer here, yet the incumbents are. As much as these startups wanted to defeat the incumbents in their markets, they focused on building better products using the same model, rather than changing the model itself. Eventually, the incumbents either catch up through internal invention or external acquisition. The startups that take their market don’t defeat their incumbents, but simply make them irrelevant.
Let’s get beyond the words without meaning to the sentences that could change the world.
I am less concerned about our overuse of the Innovation Dictionary in speaking about startups than Lepore. Our idioms and argot are key for founders to communicate with others about what they are building. We don’t have to fear the Cult of Disruption, but don’t let it stand in the way of clear-headed thought. Never dumb-down your own thinking just to fit a theory or a word, and don’t be afraid to develop whole new approaches to solving a particular market problem. That is often the most important element of designing a startup, and not one to be avoided.
For everyone involved in startups, from journalists and investors to the founders themselves, my call is this: precision in language is just as important as precision in strategy. We are all involved in disruption, if by disruption we mean building new companies in existing markets and product spaces. But the nature of that disruption is quite varied, and we need to be intellectually honest about what exactly we are trying to accomplish, and why that strategy in the market is likely to succeed where others fail. Let’s get beyond the words without meaning to the sentences that could change the world.