Larry Downes - Big Bang Disruption: Strategy in the Age of Devastating Innovation

A ddress books, video cameras, pagers, wristwatches, maps, books, travel games, flashlights, home telephones, dictation recorders, cash registers, Walkmen, Day-Timers, alarm clocks, answering machines, yellow pages, wallets, keys, phrase books, transistor radios, personal digital assistants, dashboard navigation systems, remote controls, airline ticket counters, newspapers and magazines, directory assistance, travel and insurance agents, restaurant guides and pocket calculators.

What do these things all have in common?

Each has, or is in the process of becoming, a victim of Big Bang Disruption, a new kind of innovation with the power to undermine stable businesses in a matter of months or even days.

The speed and the dramatic impact of Big Bang Disruption are the result of disruptive technologies that continue to enter the market better and cheaper than their predecessors. In this brave new world, new products and services start out life competing simultaneously on price, performance, and customization.

Thanks to ubiquitous high-speed (or broadband) computing networks, standards, and the rapid deployment of over a billion mobile devices, consumers around the world can discover these breakthroughsthe Big Bang Disruptorsas soon as they come into existence. Marketing is led not from above, but by the users themselves, who drive much of the buzz (and customer service) through social networks, review sites, microblogging platforms, and other information-sharing tools.

The often counterintuitive behavior of these new disruptors and the innovators who create them has already redefined the rules of engagement in highly competitive, technology intensive industries, including consumer electronics, computing, and communications. But as the computing revolution continues to insinuate itself into every corner of our lives, Big Bang Disruptors are starting to appear in every industry.

For each of the items listed above, for example, the source of disruption is the samethe programmable smartphone, a hybrid computing and communications device with an endless number of small software apps. Apps can be small because most of their data processing takes place elsewhere, in what is known as cloud computing. This combination of hardware, software, and distributed computing have quickly replaced a wide range of devices, products, and services; some very old and others relatively recent innovations themselves.

Well beyond individual products and services, the very process of innovation is being disrupted. The companies and entrepreneurs that build Big Bang Disruptors dont practice business as usual. Instead of developing their products in secret, they work in the open, letting early users test and extend each iteration of their design. Rather than relying on proprietary technologies and research methods, they simply combine increasingly cheap off-the-shelf hardware and software components, and then release the result into the market.

If they fail, they fail quickly. If they succeed, the early users become collaborators and even investors, jump-starting the leap to mainstream markets.

Once the disruptors arrive, theres little chance for a competitive response. The supply chains of mature industries offering goods that are suddenly yesterdays inferior alternatives are suddenly destabilized, even devastated. If you havent learned to see the disruptors coming long before your customers do, its game over.

For incumbents and their carefully constructed strategic plans, Big Bang Disruption is the innovators disaster.

This book will help you avoid that disaster.

But first, an introduction. Separately and together, we have been studying the evolution of disruptive innovations most of our careers. Big Bang Disruption builds on our previous books, including Unleashing the Killer App and Jumping the S-Curve, which looked at the impact of new technologies on the strategies and processes that drive modern enterprises.

Killer App was an early look at how the Internet and other digital technologies moved from back office to front, driving strategic change rather than simply supporting it.

Jumping the S-Curve similarly explored the ever-shrinking gap in time between one wave of disruptive technologies and the next. It offered crucial advice for business leaders determined to survive the increasingly traumatic transitions between them.

The heart of Big Bang Disruption, however, is our continuing multiyear study of the changing nature of disruptive innovation, analysis we are conducting in conjunction with the Accenture Institute for High Performance. This research looks at the nature of competition and strategic change in over thirty different industry segments, with over a hundred detailed case studiesmany recent but some historical.

We have cataloged dozens of Big Bang Disruptors that have appeared seemingly without warning to devastate the plans of some of the best-known companies in the world, sometimes fatally. And we have conducted in-depth interviews with entrepreneurs, investors, and executives in businesses old and new. We have learned their secrets for spotting potential disruptors sooner than their competitors, and for finding the fastest and least expensive ways of experimenting with them to determine whether, or when, they are ready for prime time.

Many of the most dramatic examples, not surprisingly, come from some of the most admired technology innovators of the new centuryincluding companies such as Google, Apple, Samsung, Sony, and Microsoft. Others will come from enterprises you may not have heard of until recently, if at all, including start-ups such as Airbnb, Uber, Kickstarter, and Udacity.

Still others come from incumbent companies that have learned the techniques of Big Bang Disruption, delivering dramatic new products and services that leverage their existing assets and abilities. Some arent even companies at alljust experiments that turned into dramatic success stories without necessarily intending to. In the pages that follow, you will meet academics, artists, and even one high school student who have managed, if only by accident, to create Big Bang Disruptors whose arrival unsettled the strategies of large public companies.

We did not, of course, begin our work with a clean slate. There is already a vast and growing literature on the impact of disruptive technologies on the formation and execution of business strategy, including books to which we have contributed. While theres little point to reviewing this work in detail, much of what has been written, particularly the work of Joseph Schumpeter, Peter Drucker, and historian Thomas Kuhn, remains not only valid but essential reading. (Researcher Carlota Perez, we should also note, made slightly different use of the term big bang to denote revolutionary technologiesthe kind that attracted killer apps.)