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Big Bang Disruption
Big Bang Disruption is a consumer adoption that consists of a condensed rise and fall, looking like a shark fin. Whereof incremental improvements in technology tended to have a bell-curve-shaped pattern of consumer adoption.
Technologies that suddenly expand the trapped value gap drive big-bang disruption by creating an opening for new entrants and fast-moving incumbents to give consumers something dramatically better than they currently have access to.
What Is Big Bang Disruption?
By nature, businesses are conservative entities. They thrive on building a brand, designing products, and conducting thorough marketing. They tend to move slowly and only make changes when it’s clear that it will not disrupt profits or operations. Stability is the name of the game when it comes to business success, and even those businesses with innovative ideas need a stable foundation upon which to operate.
When Challenges Arise.
Of course, businesses have also been dealing with market disruptions for years too. One visionary might make it to market with a big idea and make millions, only to see those ideas taken up by other competitors. This is when profits dwindle.
Traditionally, even when competitors seek to enter the same market, businesses involved have time to make plans, design new strategies, come up with new slogans and marketing, and move inexorably toward adapting to the competition.
Normally, market disruptions start out small. Another company might produce a competing product and take it to market. Established businesses in this market usually have time to act. They may develop new products or even buy out those new businesses to silence the competition. In some cases, they’ll conduct vicious price wars to freeze out competitors.
In all cases above, established businesses rely on their market dominance to gain the upper hand and adapt to new conditions. More importantly, their adaptation relies on a model of disruption that assumes any competitors start out small and introduce products that are either inferior in quality or don’t threaten their core products.
Crucially, this model of smaller-scale disruption gives the dominant businesses time to act and put together strategies for adaptation. The problem is that this model of disruption doesn’t take into account large-scale innovation and change that affects multiple market segments quickly. This is Big Bang Disruption.
A Study in Large Scale Disruption.
As an example of Big Bang Disruption, consider the fate of companies such as Garmin and Magellan. Once upon a time, not so long ago, these companies were at the forefront of in-vehicle navigation. Their products were used by couriers and consumers alike. Their updated maps were downloaded from central servers, and their navigation units were connected to GPS satellites. So, what happened?
Navigation companies like this were effectively disrupted on a large scale by leaps in technological development. Applications, such as Google Maps, are on every Android phone. Voice recognition through applications such as Siri makes it incredibly easy to simply use a smartphone instead of a Magellan or Garmin navigation device. Powerful smartphone computers and smart operating systems effectively replaced navigation devices that only did one thing. By contrast, smartphones are used for all kinds of things and fit easily in your back pocket or handbag.
The Big Bang Model.
So, how did it happen? How did we move from navigation devices from several big companies to using our “do it all” smartphones for exactly the same thing?
As stated earlier, the traditional path to market disruption typically follows the same pattern: a competitor copies a superior product but makes one that’s inferior; they introduce it to the market at a less expensive price and then try to erode the edges of the market and create their own market niche. It’s small, and most companies can adapt to it quite comfortably, even though they are conservative by nature.
What happened with navigation companies was different. The Big Bang Disruption follows a very different trajectory:
1. The Competing Products Came From a Different Segment
When Apple developed the iPhone, they weren’t even thinking about competing with Magellan or Garmin. They just wanted to develop a new kind of communication technology that built on their decades of experience in taking away the friction between their customers and their products.
2. Dominant Companies Were Blindsided
Because the products didn’t come from the same segment as those navigation devices, companies such as Magellan were completely blindsided. They just didn’t see the disruption coming because it came from a completely different market segment.
3. The Product Was Stable
Smartphones have gone through a lot of changes, but the base product is stable. The operating systems upon which navigation aids like Google Maps run, such as Android and iOS, are stable and have access to centralized and easy updates.
4. The Competitor Didn’t Need to Start at the Bottom
Apple had been building a market long before Magellan was even a company. Their brand had been built decades before and had matured to the point that the company could research and develop a new kind of technology. In short, they did not need to start at the bottom rung of the market.
5. Customers Switched Almost Overnight
When customers switch products overnight by changing their buying strategies and their behaviour, they freeze out formerly dominant market players. In the case of smartphones, customers started buying them up en masse and re-engineering their lives as soon as they hit the market.