Patrick Schwerdtfeger is a motivational speaker who can cover disruptive innovation and technology at your next business event. Contact us to check availability. The full transcript of the above video is included below.
Full Video Transcript:
Hi and welcome to another edition of Strategic Business Insights. Today we’re going to talk about disruptive innovation. What is disruptive innovation? Think about disruptive innovation as essentially an earthquake within an existing industry. It’s almost like a seismic shift within an existing industry.
Perfect example is when the computer came along and overtook the typewriter industry. And there were very good electronic typewriters that were being produced before, in fact at the same time when computers had already come out, but you see, no one even thought that computers were going to threaten that industry because computers were so clumsy at the beginning that it seemed so far away. The electronic typewriter was way better than those early computers. Or another example is analog photography going to digital photography. Digital photography at the beginning was clumsy and the resolution was very poor and there was no infrastructure to support it.
So these disruptive innovations are a function of what I refer to as exponential technologies. These are technologies that start very slowly but they pick up speed along an exponential curve, so it’s deceptive at the beginning. Things are evolving slowly and they’re not as good as the existing industry, the existing service or product offerings, but what happens is they start to evolve and they start to scale. They start to increase by orders of magnitude and all of a sudden they come up out of nowhere, it seems like, and they all of a sudden become much better than the existing product or service offering.
That’s the whole point, is that these new technologies, once they gain speed, they invalidate the existing business model. That’s why disruptive innovation is such a threat to large companies because you see, large companies, they thrive on the existing business model. That’s their revenue. That’s where their profits come from. So when these new technologies come up, those big companies, they can’t go to those new technologies because it would cut off their existing business model. And so what do they do? They avoid those disruptive innovations and they try to insulate themselves from it. They try to protect themselves from those disruptive innovations. But it’s that exponential evolution of these technologies that all of a sudden can come up and threaten their very existence.
That’s exactly why this is such an important concept, because of course any new startup, any new company that’s coming up out of nowhere, they’re going to look at the new way of doing things. They’re going to look at these disruptive innovations, “What can we do to completely turn this industry upside down and have a brand new technology that makes the existing model invalid?” But the large companies, those are publicly held large companies. They need to challenge themselves. They need to look at those disruptive innovations all the time and keep their eye on them and have a part of their businesses devoted to those technologies as well. This is why Google is very well-known for having 20% of their employee time designed for those employees to work on their own projects. What is that doing? It’s fostering this culture of disruptive innovation within Google, within the large corporation, so that they can hopefully stay ahead of these curves and see the potential of some new technology and start to incorporate that technology into their existing business model as it becomes increasingly relevant.
So disruptive innovation is more important today than it was in the past because exponential technologies are more important today than they were in the past, and as exponential technologies continue to revolutionize our world it’s going to become increasingly important for large companies to keep their eye on the ball, keep their eye on those disruptive innovations as they’re developed, and with any luck develop them within their own companies.
Thanks so much for watching this video. My name is Patrick, reminding you as always to think bigger about your business, think bigger about your life.
Patrick Schwerdtfeger is a keynote speaker who has spoken at business conferences in North America, South America, Europe, Africa, the Middle East and Asia.