Reinventing The GameIntroducing disruptive products to tech-savvy markets

Dana Bullister, ProductCamp 2017Saturday, June 10, 2017

Who am I

• Dana Bullister

• Background in computer science, human cognition

• Data scientist and then D.S. product owner at SolarWinds, an enterprise IT software company

What we will talk about

• What is disruptive innovation• How development, launch of disruptive innovation is

unique• Why knowing how to disruptively innovate is critical

for startups and large companies alike• Questions

(1)What is “disruptive innovation”?

• Term coined by HBS professor Clayton Christensen

"A process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors."

-http://www.claytonchristensen.com/key-concepts/

Case Study: Airbnb

• Company started in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk after the first two decided to put an air mattress in their living room and turn it into a bed and breakfast.

• Evolved into an online platform enabling users to easily rent out beds, rooms, and properties to other users.

• Now has >3M listings in 191 countries and valued at ~$31 Billion.

The Airbnb Experience (at the beginning)

The Traditional Hotel Experience

• What kinds of customers did Airbnb initially attract?• How might a traditional hotel have viewed fledgling

Airbnb? • How do they view it now?

-More expensive “up market”-Live in luxury-Traditional/familiar-More polished, you know exactly what you’re getting

-Cheaper “down market”-Live like a local-New/cutting edge/app driven-Not as polished/still working out the kinks of the app

Case Study: Airbnb

Disruptive vs. Sustaining Innovation

• Disruptive innovation exists in contrast to what Christensen calls sustaining innovation.

• I.e., innovation that simply enhances the quality of an offering within the existing value exchange framework.

• It doesn’t matter how sophisticated the underlying technology of the innovation is; it’s the business model that matters.

• E.g., a luxury hotel adding sophisticated technology for custom alerting patrons of optimal times of day for sun tanning based on sunlight and skin tone would not be a disruptive innovation.

• (regardless of the sophistication of algorithms & technologies used)

• The Honda Acura ILX

• Coursera

• Apple II computer

• IBM’s second generation, transistor-based mainframe computers replacing vacuum tubes

Disruptive or Sustaining?

Is the project that you are working on disruptive or sustaining?

- Disruptive- Sustaining

- Disruptive

- Sustaining

- Disruptive

- Sustaining• The Ford Model T

• Harvard University online portals for current students

(2) Creating disruptive innovation is different from introducing sustaining innovation

• Both are important. But a PM that is good at one is often very bad at the other.

• What do we notice about all of the disruptive innovations from the previous slide?

• They were produced by outsiders and entrepreneurs, not companies dominant in their industries. This is not always the case, but is a trend.

• Largely because many of the strategies required for successful disruption are diametrically counter to those required for sustaining innovation (which is the generally the main priority of market incumbents).

Strategies for Success

• Market is known and quantifiable - get out the Excels to maximize profit and minimize risk.

• Long-term planning, granular gantt charts can be useful for coordination. Big grand launch.

• Focus on scaling and growth.

• Market is unknown. Close your Excel and GOOTB (get out of the building).

• Incremental discovery over long-term planning. Many small launches.

• Focus on learning, business model validation, and profit.

Disruptive InnovationSustaining Innovation

(3) Why familiarity with disruptive innovation is critical for startups *and* mature businesses

• Everyone is fundamentally working within a changing market landscape.

• Of evolving technologies, competition, fads, suppliers, distributors, policies, regulations, etc...

• An extreme change in any of these factors could enable or destroy a business model.

• Businesses must learn not just to adapt, but to proactively seek out disruptive opportunities.

• Conclusion: Clayton Christensen and the “startup machine”: My own experience within SolarWinds.

For more topical information

• The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail by Clayton M. Christensen• The Innovator's Solution: Creating and Sustaining Successful Growth by Clayton M. Christensen, Michael E. Raynor• Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen, Taddy Hall• Crossing the Chasm: Marketing and Selling Technology Projects to Mainstream Customers by Geoffrey A. Moore• Only the Paranoid Survive by Andrew Grove• Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim, Renee

Mauborgne• Scrumby Jeff Sutherland, JJ Sutherland• Disciplined Entrepreneurship by Bill Aulet• The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric

Ries• When Computing Got Personal: A History of the Desktop Computer by Matt Nicholson

Questions?

Thank you!Dana Bullisterdana.bullister@gmail.comhttps://www.linkedin.com/in/danabullister/