When you're an entrepreneur, you have two basic options to launch a startup. You can either start an entirely new industry, or enter an existing one.
Very few businesses are able to create a brand new industry, so the majority of entrepreneurs tackle the challenge of enter existing markets with established players. In order to be successful, you have to find a break out in your field.
The Challenge of Market Disruption
If you look up "disruption" in the dictionary, one of the top definitions appears within the context of business. Dictionary.com defines the word as "a radical change in an industry." The most essential term in that phrase is "radical."
If you hope to disrupt an industry, you can't just offer change. The change has to be significant and even alarming. Any firm can enter an industry and cause a disturbance, but only the brands that are committed to long-term growth will create a true disruption.
What's the distinction? A disturbance is a momentary interruption that eventually dissipates into the background noise. A disruption entails an ongoing interference that substantially and even permanently alters the makeup of the industry.
An example of a disturbance would be a new startup that offers a free one-month trial of its services. Such an offer may attract significant attention, but the deal eventually ends and everything subsides back to the status quo ante.
A disruption would be more like a startup that offers monthly subscription rates that are half the price of its closest competitor. Not only would this grab the industry's attention, but it can survive to shift industry relations indefinitely.
Five Tips for Disrupting Your Industry
How can you disrupt your industry, and not just disturb it? That's the proverbial million-dollar question. As industries become increasingly crowded, and their various niches filled, it's imperative for a new business to answer this question sooner rather than later.
It's difficult to come up with generic advice -- every industry, business, and financial climate has its distinct character -- but the following tips can be applied to a broad variety of situations.
1. Offer a Lower Price
In many cases, the most effective option is to provide customers with a similar product or service at a lower price point. This should be common sense: The majority of consumers prefer to pay less.
Although there's something to be said for targeting the upper echelon of the market and developing a premium value proposition, in reality most customers don't care about premium. If it costs less and offers the same basic features and value, most of the market will typically select the cheaper option.
A solid example of the way offering a lower price point empowers a new business to disrupt its existing industry is MedPro. By insourcing services and eliminating superfluous costs, this relatively new company has been able to drive costs savings of 30 percent for most of its customers.
As a result, MedPro is attracting hundreds of new customers per month in an industry that in the past has largely been controlled by one or two companies.
2. Address Your Industry's Pain Points
Every good business is built on the idea of solving a pain point for the target market. Along the way, unfortunately, industries have a tendency to give birth to entirely new pain points.
Take social media, for example. Social networking sites such as Facebook and Twitter were designed to allow for communication between individuals, but the industry has given rise to an entirely new pain point: As social media has grown, businesses have uncovered the need for better solutions for communicating with customers.
Companies such as SocialRest have grasped this pain point and surfaced to help organizations watch and monitor their brand reputation on social media. SocialRest recognized a non-traditional pain point and pursued it.
There was no need for social listening tools before social media prospered. The growth of this industry produced new pain points, and firms like SocialRest listened and disrupted.
3. Reduce Complexity
If you want to disrupt an industry, find a way to take something complex and make it simpler. Simplification of service is what the entire "smart home" industry is based on.
Homeowners want to enjoy greater comfort, safety, and convenience without having to execute complex actions. By offering a streamlined alternative to traditional thermostats, Nest has been able to disrupt an industry that had been fairly stagnate for a number of years.
The product is essentially the same as the competition's, in the sense that it regulates a home's temperature settings, but it's far easier to control. The result has been a fundamental disruption in that industry.
4. Automate a Manual Feature
Any time a business can automate or streamline a feature that was formerly operated manually, that brand has an excellent opportunity to disrupt its industry. People love things that are hands-off and automatic.
Can you recall that online banking is a fairly recent practice? Think back to the mid-to-late 1990s, and you might remember that nearly 100 percent of your interactions with your bank occurred at a physical location.
The Stanford Federal Credit Union helped change that by becoming the first financial institution to offer online banking. By automating a feature, they were able to disrupt an entire industry.
5. Market, Market, Market
Any time a business attempts to disrupt an industry, marketing has to play a huge role. Without using proper marketing channels and PR strategies, it's nearly impossible for a brand to get noticed.
That's why businesses must spend a lot of time preparing for their launch by developing robust and comprehensive marketing plans designed to garner attention and convey value. Although the daily fantasy sports industry is currently in the hot seat for different reasons, it's hard to ignore how effectively companies like FanDuel and DraftKings disrupted the larger sports betting industry in the U.S.
They offered a distinct alternative to both traditional betting and fantasy sports that attracted many people. Much of the success of these companies was rooted in the fact that they took marketing and advertising very seriously.
Become a Disruptor
All your life, you've probably heard the term "disruption" in a negative context. Your mother may have told you not to "be disruptive" when your father was working at home. A teacher might have asked you to stop being a "disruption" in class.
Across most parts of society, being a disruption is a bad thing. You're supposed to sit back quietly and blend in with everyone else.
When it comes to your business and your ability to stand out in a crowded industry, being a disruption is a good thing, though. If you want to become a profitable and recognizable brand, it can be a mistake to blend in.
If you simply follow the status quo and do what every other brand is doing, getting noticed will be much harder. If you take a contrarian stance and forge your own path, you may enjoy the excitement of standing out.
Study the examples and tips in this article and push your brand into being a positive disruption.