Consider being a disrupter – why SMEs need to be digitally savvy
The biggest bogeyman in the business world is “the distrupter”. The best way to guard against distrupters is to become one.
As the old saying goes; “If you can’t beat ‘em, join ‘em” – or at least learn to think like them.
Distrupters focus on making things cheaper, simpler, more convenient, more accessible or more effective. They turn existing markets on their heads.
According to Clayton Christensen, the Harvard Business School professor who coined the phrase “disruptive innovation” in 1995, distrupters usually target the lower end of existing markets.
“It’s 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,” he says.
The key here is that existing businesses, usually focused on high margins at the upper end of the market, rarely defend the lower end. Which is why it pays to regularly scan the margins of your market for new opportunities – could you appeal to a broader demographic, or perhaps new geographic area?
What are your customers biggest frustrations? In today’s world, most distrupters are based around new technology, or delivery platforms, which turn traditional ways of doing business on their head – delivering cost-savings and convenience to consumers.
For example, Uber, effectively the world’s biggest taxi firm, owns no cars. Airbnb, one of the world’s largest accommodation websites, owns no accommodation. They are both facilitators, rather than providers – after envisioning new ways to both source and deliver their target product or service.
And it’s all made possible by technology. Embracing the latest tech trends is essential if you are going to think like a distrupter. Staying across digital developments allows you to envisage new possibilities in the way products or services are either sourced, or delivered, to customers.
For example, being an early adopter of new payment systems like AfterPay gives your customers more choice and boosts your chance of making a sale.
Conversely, if you do not have it, it may well frustrate some of your customers.
Some other tips to help you think like a distrupter are:
- Learn to spot problems: Are there any common customer complaints or frustrations? Can you use new technology to solve any of these? Distrupters exploit customer pain points.
- Scan the margins of your business: Distrupters succeed by tapping into markets no one knew existed. These are usually potential customers on the “edge” of your market. Look for those on the price, demographic or geographic margins of your market and think about how you could convert them.
- Encourage creative thinking: If you create a business culture that thinks outside the box, you are more likely to think like a distrupter.