Why Small Businesses Should Be Embracing Disruptive Technologies
Rather than being something businesses should fear, a change in an industry's landscape should present plenty of opportunities. Here's why
It’s almost unheard of for a company to say “we’re not interested in utilising disruptive technologies”. Perhaps if a company is already the leader in its field it would have a vested interest in making sure competitors don’t use those technologies, but surely even then they would not turn down an opportunity to increase efficiency and costs, and perhaps change the world.
For the most part, it is not a case of companies, or organisations, not being interested in disruptive technologies. Rather business leaders are not, on the whole, aware of how or where to spot these opportunities, and in particular how to make use of them.
Disruptive shouldn’t be a dirty word
Disruptive technologies at their core displace their predecessors or carve out an entirely new market. This may mean an overhaul of the current standard and undertaking an entirely new endeavour, which is a scary proposition.
The word ‘disruptive’ also has many negative connotations, and often goes hand in hand with uncertainty and risk, words no executive longs to hear. However, as any investment professional will tell you, uncertainty and risk breed opportunity for those willing to take the plunge.
Learn to think differently
A strong strategy on the matter would be to ensure your team is always looking for new ways to approach problems. Just because one way of doing things works, it doesn’t mean it is the best or only way – efficiencies can always be found, and methodology improved. Cross-disciplinary solutions can be used to great effect, for example applying engineering minds to medical problems, or creative minds to engineering problems could push exponential leaps in operations.
Look for a niche
It’s virtually impossible to predict what the next big disruptive technologies will be; if it weren’t then the world would be a very different place. As such, businesses should not necessarily spend all their time searching for the next breakthrough technology, but rather look for areas of opportunity.
My advice would be to look at what areas are ripe for automation, and what technology is doing that already – like robotics and AI; which technologies are reducing energy costs and increasing efficiency, like renewables and clean energy; and which technologies are aiding medical advances.
These are the areas that have the most impact on our everyday lives, and will therefore always be ripe for innovation and disruption. To effectively make use of disruptive tech within these sectors you must look at the business case, which ones can your business make use of and which ones can you easily integrate into your current business model? If you can find a way of automating inefficient processes that reduces cost, then your business will edge ahead of the competition.
You don’t have to always be first
Timing is also an important aspect to consider. Undertake due diligence and see what has already failed and why before you risk your capital. Unfortunately, early adopters are seldom the ones who make it.
Sergey Brin and Larry Page were not the first to utilise web crawlers in a search engine, but they perfected it, and now JumpStation and Altavista are distant memories. Microsoft introduced tablet computers almost 10 years before the iPad and they were a resounding failure.
Sometimes an idea is way ahead of the technology – the public weren’t interested in a slow tablet with limited functionality. Do the market research and make sure you understand what your customers/clients want?
Failing to prepare, is preparing to fail
This isn’t to say that bullish behaviour shouldn’t be encouraged. History is littered with failures that can be attributed to disruptive technologies. Kodak is a good example of a huge multinational company that failed to take on the challenge of disruptive innovation. It was perfectly positioned to lead the way in digital and online photography and photo sharing but Kodak failed to move with the times – not realising the threat at its door.
Instagram is then a perfect counter example. Instagram was originally a location based check-in app.
The creators quickly realised that the photo sharing feature was guiding far more traffic through the app than anything else and they pivoted to concentrate on that aspect. It focused on the technology behind photo sharing, creating a better platform than its competitors that seamlessly allowed users to share photos across their entire social media ecosystem.
Instagram, a five-year-old company, is now worth $35bn and Kodak a company established over 120 years ago is worth just $2bn.
No industry is safe
Disruptive technologies are an inevitability, and utilising them is a necessity. It is easy to fall into the trap of thinking that a market is safe from disruption, but this is a mindset that no entrepreneur should harbour.
To be successful one must always be moving forward and trying to solve new problems with new solutions.
Tej Kohli is founder and chairman of Kohli Ventures and founder of the Kohli Foundation