Disruptive Technologies
Disruptive Technologies theory explains how simpler, cheaper offerings enter below an incumbent's radar and improve until they take the market the incumbent thought was too low-value to defend.
A rising line starts flat and low, then cuts up through the incumbent's slower curve near the top of the chart.
Reach for this when…
- A cheap competitor is nibbling at your least profitable customers and the board isn't worried.
- You're deciding whether to chase a new technology that doesn't yet match your product's quality.
- You keep improving your best product for your best customers and growth has stalled anyway.
How to run it
- Watch the low end of your market and adjacent non-consumers, not just direct competitors.
- Track the new entrant's trajectory of improvement, not just its current quality.
- Judge whether it threatens your most profitable customers or only the ones you don't want.
- Decide: defend by improving faster, or launch a separate unit that can compete on the entrant's terms.
- Act before the entrant's trajectory crosses yours, not after.
A worked example
Situation. Budi Santoso ran Santoso Optik, a chain of optician's shops in Surabaya, Indonesia, that dismissed an online lens-fitting app as too basic for anyone who cared about their eyesight.
Applied. Tracking the app's trajectory rather than its current quality, he saw it improving fast among customers who just wanted contact lenses reordered, not an eye exam.
Result. He launched a stripped-down reorder service under a separate brand before the app owned that segment outright, protecting the higher-margin exam business by not competing with it directly.
The catch
Plenty of things get called disruptive that are just competitors with a lower price; the theory only bites when the new entrant is improving along a trajectory that will eventually satisfy your mainstream customers too. It's also easy to spot in hindsight and genuinely hard to call in real time, which is exactly why incumbents keep missing it.
If it can't yet serve your best customers, that's not proof it never will.
Origin: Joseph Bower and Clayton Christensen