Dispruption

Disruption is a key force in dramatic changes, including exponential technologies. Let’s face it, a lot of better technology is efficiency. If there is more efficiency, read that less cost in something, the vendors in that space tend to make less.

Here is Clayton Christensen’s short video take from Harvard Business Review.

Sometimes it is a conventional business model going after another business model. Products happen like this a lot. As information is free, solely digital products tend to be disrupted from people, often individuals delivering a better solution and making it available for free.

Encyclopedia companies, likely didn’t see free information coming as soon as they might have, but what move did such CEOs have once it became clear that their business was being disrupted?

Assuming the management team was working for money, a percent of the take on the product they sold, they were likely in a state of disbelief when Wikipedia, and others, were brought to their attention as a potential threat to their business. Amateur submissions via an algorithm driven community giving away information for free!

At some point when it became clear that their sales were dropping severely and they weren’t coming back, the very incentives that made that business work made it impossible in the world of free. They still have their brand but their sales all but disappeared pretty quickly.

Not to pick on encyclopedias, but people used to go door to door selling those things. People used to have jobs vetting content produced in static books. Now, the single source of Wikipedia has more complete, correct and so much more easily acceptable information than all the encyclopedias put together.

That business was disrupted.  All those people in the encyclopedia business made their living that way. Free, or even simply less cost for the consumer shrank their business. Almost all businesses, including government, law enforcement, healthcare, education, utilities and corporations in general, tend to protect and expand their budget.

Much like encyclopedia companies, they will tend to ignore as much of technological efficiency, unless it increases their profits, for as long as they can. Until they are disrupted.

Disruption is a messy and often painful way forward, but it is the way forward. We just have to know what to do with the resources freed up.