Getting Started with Disruptive Business Design

Posted on November 9, 2009

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Here are some ideas:

1. Simultaneously simplify a number of advantages together to create a new cost base.
When Southwest Airlines launched they flew only one aircraft — the Boeing 737. Today, they still have one aircraft. They have one class of service. They have simple fare strucutures. They sell direct to end customers. They go to the less frequented, second-tier airports. They have broad job descriptions and cross-train so that one person can do many jobs — including pilots handling luggage. The created radical simplicity by simplifying many dimensions. They are not the only business where complexity has stopped adding value. New, radically simple business models can be created in everything from financial services to healthcare.
 
2. Give away the other guy’s razor! Craig Newmark garnered dominant market share by giving away almost all the blades. Put more formally, every “two-sided market” has a vulnerability — and if you can enter by aiming at that vulnerability, you can win. In China, Google is now giving away MP3’s and sharing the ad revenue with the artists. Paid music is now all marketing promotion. In addition, at Wired magazine’s Disruptive by Design conference, a featured book was Chris Anderson’s Free.
 
3. Look for new, radically cheaper ways to do the job. Yeh used run-of-the-mill technology — cell phones, video cameras, and even a styrofoam cooler — to create a much cheaper design. Consumer technologies and on-demand services like Amazon’s Mechanical Turk enable new business designs that could have a fraction of the cost to deliver the same services. Imagine a security company that was truly designed around the inexpensive, internet connected, monitoring equipment available today.

  4. Think about leveraging a very few individuals with extraordinary talent. It is possible today for a small group of people to make a spectacular movie (think Pixar) or to manage billions in capital (think hedge-funds). Is there a way to create incredible value for your organization by leveraging the power of a small group across millions of consumers or billions of dollars?

  Source: http://blogs.harvardbusiness.org/sviokla/2009/10/getting_started_with_disruptiv.html

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