bwd apr 2012 - disruptive innovation

Disruptive InnovationSimon Sturmer

19 Apr 2012

Innovation

Quick thought experiment

○ Think of the fastest-growing, exciting, most

innovative business of our time..

○ Now fast-forward 15-20 years

Definition & Origin

Disruptive Innovation - Clayton Christensen, 1997

"An Innovation (product, service or experience) from a

newcomer that enters a market displacing or crippling

existing businesses"

Examples

New Entrant vs Incumbent

○ iTunes vs Sony Music

○ Amazon/Ebay vs Brick & Mortar

○ Skype vs Traditional Telco

○ PC vs Mainframe

Disruption

Without market disruption, would we even have startups?

○ Big businesses get bigger

○ Rich get Richer

○ New Entrants don't have the capital, brand or

distribution channels

Sources of Disruption

○ New Distribution Channel (the Internet)

○ De-regulation, Geo-political

○ New Markets (China, Mobile phones)

○ Disaster, Financial Crisis

○ **Accelerating Growth in Technology** ...

Black Swan Events

Nicholas Taleb - "Fooled by Randomness" - 2004

"A surprise event with major impact which, in hindsight,

seems obvious"

○ The rise of the Internet

○ Google -

○ The iPhone

○ Financial/Economic

Unpredictability

Ideas that are disruptive

○ Popularity vs Potential to be Revolutionary

● 5-10% - Brilliant, Majority think it's insane

○ Not necessarily, a new company, but a new entrant

to an industry (iTunes)

○ Inherently unpredictable (Black Swan), but in

hindsight it's obvious (Google)

Moore's Law

Gordon Moore, 1965

"Number of transistors doubles every 1-2yr"

○ Started with 5 data-points

○ Non-linear curve is extremely hard to identify at first

○ Applies to various fields

● Storage, CCD density

● Gene Sequencing

● Internet Growth

Ray Kurzweil's Extrapolation

Pace of Human Innovation

○ Every innovation the result of one or more prior

innovations

○ Think of Ideas as "procreating" and look at

innovation similar to population growth

○ Emergent Layers of Abstraction

● Life sciences (genetics, biology)

● Energy and clean-tech

● Internet

Coming back to the Web

○ Greatest new distribution medium since the

printing press (Dell, Amazon, Skype)

○ Prior to this, how many great innovators would ever

have their ideas see the light of day?

○ Globalization & lower barriers to entry

○ Internet itself is growing in a nonlinear fashion

Disruptive Market Entry

○ Entering a market as a cheaper, lower-quality or

lower-performance alternative (VOIP, CCD, E2W)

○ As technology improves, pushes the incumbent into

an ever-shrinking high-end niche

○ As growth crosses the "knee" in the curve, the new

entrant has effectively disrupted the market

○ Large companies often see this coming, but rarely

have the power or foresight to stop it

Present Day Examples

○ Mobile is doing to the PC what the PC did to the

Mainframe

○ Electric Vehicles (E2W - China)

○ 3D Printers

○ ARM - Intel

Exponential Growth of Computing

Projecting Technological Growth

○ Can't predict "Black Swan" -style disruptions, but

we can count on the bigger-picture growth

○ Looking at mobile computing growth purely

mathematically, by 2036:

● size of a red blood cell

● MIPS times 10^9

○ Applications in Medical, Clean Tech, Bio/Nano

engineering, Machine Learning, etc

Wrapping up

○ We're witnessing unprecedented growth in

industries such as the Internet

○ Due to predictable and unpredictable forces, new

entrants have incredible advantages

○ Regardless of Financial, Economic and Political

effects, the pace of human innovation increases

ever faster

Disruptive InnovationSimon Sturmer

 simon.sturmer@gmail.com

http://gplus.to/sstur 

github.com/sstur 

(will link to slides and references using github or meetup)

Thanks for your time.