Investment bankers Bill Hambrecht and Clayton Christensen took to the Disrupt SF stage today to defend the concepts of disruption and to address the ways the Valley predicted the future of financial services and technology.
Christensen is the author of The Innovator’s Dilemma and a lauded professor at the Harvard Business School. His writing on “disruption,” a concept he says the world has taken and modified, was recently the subject of a piece by Jill Lepore called “The Disruption Machine.” In it, she shows the “bad side” of disruption, although Christensen disagrees with her thesis.
“‘Disruption’ is, at its core, a really powerful idea,” he said. “Everyone hijacks the idea to do whatever they want now. It’s the same way people hijacked the word ‘paradigm’ to justify lame things they’re trying to sell to mankind. There wasn’t a way for Holiday Inn to go against the Four Seasons. They could emulate the Four Seasons by going upmarket,” he said. He believes, however, that companies like Airbnb have been able to disrupt that market by changing the way rooms are rented.
“It’s not so much going up as going around,” said moderator Jon Shieber.
Hambrecht and Christensen primarily want to disrupt investment banking. They reminded us that IPOs were once the only way. Adobe went public for an IPO of $5 million while Intel went public at $8 million. However, Hambrecht says that these were early outliers. Now, he says, thanks to the VC community, there “are plenty of buyers for smaller companies.”
In short, Christensen and Hambrecht believe in disruption. They key is to define terms and come to understand truly disruptive companies. His thoughts on ride sharing?
“It’s not really clear to me that Uber is disruptive,” said Christensen.