Entrepreneurship through Disruption

Every few years a new buzzword emerges within entrepreneurship. The current iteration of fashionable language is “disruption”. Disruptive entrepreneurship takes on established industries and economic models and disrupts the status quo by offering products or services in a new way. Uber disrupted the taxi industry. Blue Apron disrupted grocers. Amazon disrupted traditional retailers. Streaming services like Netflix, Hulu, and HBO Go disrupted traditional network television. These disruptive startups don’t necessarily have to be startups. Entrepreneurial businesses have the capacity to evolve their business models to improve on their industry norms.

When individuals look at emerging disruptive entrepreneurial concepts, they often concentrate on technology. The businesses listed above as examples of newer entrepreneurial efforts all utilize advances in technology to challenge existing business models. Technology may act as the conveyance mechanism for the entrepreneurial activity, but at its core, disruptors are simplifying structures. Newer technology may enable entrepreneurs, but it is not the cause of the aforementioned entrepreneurial ventures.

Businesses and organizations can take advantage of a “disruptive” mindset to offer better services, create margins, add value to the consumer, and shorten cash cycles if they ask themselves some basic questions:

1. What annoys you in your industry? As a business person, are there supply chain issues that bother you? Are there products or product portals that don’t exist? Can your consumers influence products and services? When you identify things that frustrate you within your industry, you may have stumbled upon an opportunity you can monetize.

2. What is the purpose behind your procedures? A lot of businesses and organizations will get stuck in a routine, even when outside advancements make parts of the routine irrelevant. I think we’ve all been a part of a meeting that consisted of people talking at each other with no interactive dialogue (i.e.- a meeting that should have been an email). By looking at your internal procedures and asking “why?”, you may find ways to improve efficiency, or replace tasks with something that represents a new market model. Why do we need to go through a traditional taxi service when we can order an Uber?

3. Is your business meeting the needs of the modern consumer? The “value proposition” is something that we talk a lot about at Main Street. Sometimes people emphasize portions of a business that mean a lot to them, but those same business elements mean very little to the consumer. Sometimes, the consumer base really wants a particular product or service from a business, but the business doesn’t offer the category. By talking to your consumers and recording their “wish list” of products or services, you may find new ways to draw consumer traffic and sales. You can conduct a formal survey (utilize Survey Monkey or work with Emporia State University’s School of Business), an informal survey (an open question on social media), or instruct your staff to ask certain questions of your customers (and record results).

4. How can advances in technology improve your products or services? The ability for a consumer to interact with a business type 24/7 outside of the four walls of a business is increasingly important. For small businesses, utilizing technology that can project your expertise is a critical selling point. Identify trends in technology that could cross apply to your business type. When tech can decrease labor needs, automate repetitive tasks, or improve customer access, your company can grow.

5. What can your business do to speed up deliverables? Time is money. Finding ways to expedite the cash cycle of your business can result in improving your risk profile and improving profits. Money has a “time value”, and the opportunity cost represented in tying up capital in an extended transaction can be detrimental for a business. Finding ways to speed up the sales and fulfillment process is a simple disruptive activity that can produce immediate gains.

6. How can you establish a modern take on a monopoly? Just to be clear here, a monopoly in the traditional sense (one company that crushes all competitors through artificial barriers to entry) is a bad thing. Newer businesses are pursuing monopolistic goals through intense consumer focus. They ask themselves “how can I be so valuable to a consumer that they would have to be an idiot to spend anywhere else?” By designing a business that is truly consumer centric, you may establish something that disrupts your industry.

7. Who are competitors that refuse to change? All business types evolve. The retail powerhouses of 100 years ago are largely nonexistent today. Woolworths, Mongomery Wards, Kress 5 and Dime, and a host of other businesses that once dominated a consumer segment are no more. Did people stop buying “stuff”? No. Consumers shifted their buying trends, and they will continue to do so. Businesses that refuse to change their model are susceptible to changing consumer expectations. Smart entrepreneurs can identify ways to meet consumer demands and grow. Just because a business is big, doesn’t mean it can’t fail.

New entrepreneurs aren’t the only ones that can disrupt a market. Existing businesses can identify shifts in their industry or adjacent business categories and disrupt the model. Because of an existing familiarity with the market, their business needs, and the needs of the consumer, established businesses may be more capable of industry disruption.

Changing things within an established order isn’t easy, but when businesses can improve speed, efficiency, quality, price, and/or customer reach through alterations of a business model, economies shift. Look at the seven questions listed above, and identify some ways that your business can use the disruptive model to improve sales, margins, and traffic. You may not become the next Waze, but you could improve your business profitability.