Disruptive technologies
Disruptive technologies are the ones that catch the leader in an industry by surprise.
These technologies when they enter the market, they do not appeal to mainstream
customers as they are low on performance attributes. They do not appeal to the market
leader because they are low on profit margins. But most of these technologies follow
Moore’s law and keep improving at a very rapid rate both in terms of performance as
well as profits. And before we know it they become the market leaders. We have seen
this happen again and again with companies like Xerox (Photocopy) and Kodak
(Cameras) in the past and with Google (Search), Apple (Music, Phones, Tablets),
Facebook (Social Network), Wikipedia (Encyclopedia), M-Pesa (Mobile payments
and remittances in recent years. All the recent disruptions have been riding on the
internet and mobile technologies. Let us try to understand some of these examples
in a bit more detail and try to see what this might mean to our future.
customers as they are low on performance attributes. They do not appeal to the market
leader because they are low on profit margins. But most of these technologies follow
Moore’s law and keep improving at a very rapid rate both in terms of performance as
well as profits. And before we know it they become the market leaders. We have seen
this happen again and again with companies like Xerox (Photocopy) and Kodak
(Cameras) in the past and with Google (Search), Apple (Music, Phones, Tablets),
Facebook (Social Network), Wikipedia (Encyclopedia), M-Pesa (Mobile payments
and remittances in recent years. All the recent disruptions have been riding on the
internet and mobile technologies. Let us try to understand some of these examples
in a bit more detail and try to see what this might mean to our future.
Birth of the Internet
The internet was conceived by the Defense Advanced Research Project Agency
(DARPA) as Advanced Research Projects Agency Network (ARPANET). It was
mostly used for defense and military purposes for the first 30 years. The internet
went public in the 1990’s. It created something similar to the Gold Rush for the first
10 years when people started using the words like “New Economy” and valuations
for companies born on the internet went through the roof and millionaires were
created overnight. By the year 2000 the craziness had reached a peak. As with all
bubbles, the internet bubble burst and we had the dot com bust during which many
(DARPA) as Advanced Research Projects Agency Network (ARPANET). It was
mostly used for defense and military purposes for the first 30 years. The internet
went public in the 1990’s. It created something similar to the Gold Rush for the first
10 years when people started using the words like “New Economy” and valuations
for companies born on the internet went through the roof and millionaires were
created overnight. By the year 2000 the craziness had reached a peak. As with all
bubbles, the internet bubble burst and we had the dot com bust during which many
internet companies went bankrupt and many people lost their fortunes. As shown by
the famous Gartner hype cycle we are now getting out of the trough of disillusionment
and entering into the slope of enlightenment and Plateau of productivity for internet
companies. What follows arestories of companies who are creating the latest disruptions
in the internet era.
the famous Gartner hype cycle we are now getting out of the trough of disillusionment
and entering into the slope of enlightenment and Plateau of productivity for internet
companies. What follows arestories of companies who are creating the latest disruptions
in the internet era.
Google (Two Sides Markets, Search, Automatic Cars, Internet Balloons, Robotics,
Machine Learning)
Google was founded in 1998 by Larry Page and Sergey Brin when they were PhD
students at Stanford University. Their primary product was a fast search engine
that provided the most relevant results on the internet. They monetized their Search
technology with AdWords by offering users relevant Ads based on what the user was
searching for. This was the use of the two sided market concept where Advertisers
paid while the users got to use the search engine for free. After search they went into
Gmail, Maps, Chrome (browser and OS). They acquire YouTube (videos), Android
(mobile).
students at Stanford University. Their primary product was a fast search engine
that provided the most relevant results on the internet. They monetized their Search
technology with AdWords by offering users relevant Ads based on what the user was
searching for. This was the use of the two sided market concept where Advertisers
paid while the users got to use the search engine for free. After search they went into
Gmail, Maps, Chrome (browser and OS). They acquire YouTube (videos), Android
(mobile).
They are now focusing on Automatic Cars, Internet Balloons, Robotics and
Machine Learning.
Machine Learning.
Apple (Disrupting Music and Telecom industry. Creating Tablet industry)
Apple first came into the limelight by disrupting the music industry in 2001 with its
iconic iPod. The iPod soon became a fashion statement and allowed people to carry
1000 songs in their pocket and allowed consumers to buy a single song for 99 cents
from the iTunes store. This was disruptive because, before the iPod and iTunes came
along, people could only buy CD’s which contained 10 to 15 songs of one particular
artist or band. Now people could buy 15 different songs from 15 different artists at
a much cheaper price at the click of a button in a matter of minutes.
iconic iPod. The iPod soon became a fashion statement and allowed people to carry
1000 songs in their pocket and allowed consumers to buy a single song for 99 cents
from the iTunes store. This was disruptive because, before the iPod and iTunes came
along, people could only buy CD’s which contained 10 to 15 songs of one particular
artist or band. Now people could buy 15 different songs from 15 different artists at
a much cheaper price at the click of a button in a matter of minutes.
Then Apple went on to disrupt the telecom industry with the introduction of its iPhone
in 2007. The iPhone came with a multi-touch interface and it was a phone, music player
and internet browsing device all in one. It did all these things in a simple user-friendly
way with a beautiful user interface.
in 2007. The iPhone came with a multi-touch interface and it was a phone, music player
and internet browsing device all in one. It did all these things in a simple user-friendly
way with a beautiful user interface.
Then Apple created a totally new device and new market with its iPad tablet which
was released in 2010. Many people called it a bigger iPhone and some people even
made fun of it by saying that the name iPad felt like it was a feminine hygiene product.
But it was Steve Jobs and Apple who had the last laugh.
was released in 2010. Many people called it a bigger iPhone and some people even
made fun of it by saying that the name iPad felt like it was a feminine hygiene product.
But it was Steve Jobs and Apple who had the last laugh.
Now Apple is planning to disrupt the payments industry with Apple Pay and the
wearables industry with iWatch. Another interesting technology they are working on
is 3D mapping Laser beam projector system.
wearables industry with iWatch. Another interesting technology they are working on
is 3D mapping Laser beam projector system.
Facebook (Social Networks and Viral Messages)
Mark Zuckerberg started Facebook in 2004 when he was a Harvard undergraduate with
2 of his roommates. It rapidly spread from Ivy League campuses to high schools and
eventually to everybody with access to an internet connection. Facebook recently
went mobile in 2012. The Facebook platform allows users to share experiences like
listening to music, viewing a photo, reading an article and movie reviews. It allows the
users to share their deepest thoughts, emotions and feelings and it is saved on their
timeline. It also allows users to discover people, photos, places and interests.
Currently there are 1.23 billion active Facebook users. So a wealth of rich data about
all these users is now available on this platform. The concept of viral
2 of his roommates. It rapidly spread from Ivy League campuses to high schools and
eventually to everybody with access to an internet connection. Facebook recently
went mobile in 2012. The Facebook platform allows users to share experiences like
listening to music, viewing a photo, reading an article and movie reviews. It allows the
users to share their deepest thoughts, emotions and feelings and it is saved on their
timeline. It also allows users to discover people, photos, places and interests.
Currently there are 1.23 billion active Facebook users. So a wealth of rich data about
all these users is now available on this platform. The concept of viral
marketing and viral messages became popular because of the ability that Facebook
provides its users to share all kinds of content with their friends and acquaintances.
provides its users to share all kinds of content with their friends and acquaintances.
Facebook is now looking into Virtual Reality, Payments by Facebook Messenger
which may very well change the way we socialize and the way we transact in the
digital world.
which may very well change the way we socialize and the way we transact in the
digital world.
Wikipedia (Wisdom of the Crowds)
Wikipedia was founded in 2001 by Jimmy Wales. In a short span of time it became
the 6th most popular website on the internet with 34 million articles in 288 languages.
It has 18 billion page views and 500 million visitors each month. It is able to manage
this with contributions from all its users and 73,000 active editors. It is completely free
with no advertisements. It is relevant as it keeps getting updates on a regular basis.
Its accuracy keeps on improving as it is reviewed by a lot of people.
(“Given enough eyeballs, all bugs are shallow” – Linus’ Law as formulated by Eric
the 6th most popular website on the internet with 34 million articles in 288 languages.
It has 18 billion page views and 500 million visitors each month. It is able to manage
this with contributions from all its users and 73,000 active editors. It is completely free
with no advertisements. It is relevant as it keeps getting updates on a regular basis.
Its accuracy keeps on improving as it is reviewed by a lot of people.
(“Given enough eyeballs, all bugs are shallow” – Linus’ Law as formulated by Eric
Raymond).
In the future Wikipedia may be able to offer us virtual reality tours into the past,
present and future based on the content it accumulates.
present and future based on the content it accumulates.
M-Pesa (Mobile and Bottom of the Pyramid)
M-Pesa was launched in 2007. It was owned by Vodafone and operated by Safaricom
in Kenya. It is a fast, secure and affordable payment service to “Send Money Home”
by SMS. It does not need a Bank account. This was one of the key selling points for
this service as many people in Kenya at that point in time did not have a bank account.
Annual money transfers using M-Pesa have reached 10 billion USD as of Mar 2014.
M-Pesa made a profit of 183 million USD in 2012. M-Pesa is a classic success story
in the Mobile space and highlights the fact that there is in fact money to be made at the
bottom of the pyramid as highlighted by C K Prahalad in his book Fortune at the bottom
of the pyramid.
in Kenya. It is a fast, secure and affordable payment service to “Send Money Home”
by SMS. It does not need a Bank account. This was one of the key selling points for
this service as many people in Kenya at that point in time did not have a bank account.
Annual money transfers using M-Pesa have reached 10 billion USD as of Mar 2014.
M-Pesa made a profit of 183 million USD in 2012. M-Pesa is a classic success story
in the Mobile space and highlights the fact that there is in fact money to be made at the
bottom of the pyramid as highlighted by C K Prahalad in his book Fortune at the bottom
of the pyramid.
Sharing Economy, Collaborative consumption (Uber, Airbnb)
The latest disruption that has come up is something called the Sharing Economy or
Collaborative consumption. The primary premise behind this concept is that there
are a lot of underutilized resources and assets which can be put to good use with
the help of platforms that can match these assets or resources to the right people.
This has led to emergence of disruptive companies like Uber in the transportation
industry and Airbnb in the Lodging industry.
Collaborative consumption. The primary premise behind this concept is that there
are a lot of underutilized resources and assets which can be put to good use with
the help of platforms that can match these assets or resources to the right people.
This has led to emergence of disruptive companies like Uber in the transportation
industry and Airbnb in the Lodging industry.
Internet of Things (IOT)
All the above leads us to the Internet of Things which is the next big wave in technology
based disruption. As of today the primary devices that connect to the internet are
laptops, mobile phones and tablets. Going forward more and more devices will connect
to the internet. Cars, Refrigerators, Microwave ovens and many such appliances will
connect to the internet and exchange data back and forth. For example your refrigerator
will automatically send an order to an online retailer when it is running out of milk,
eggs, and fruits. Your car will send a message to your mechanic to book a time slot
when it is due for servicing or when there is an imminent part failure.
based disruption. As of today the primary devices that connect to the internet are
laptops, mobile phones and tablets. Going forward more and more devices will connect
to the internet. Cars, Refrigerators, Microwave ovens and many such appliances will
connect to the internet and exchange data back and forth. For example your refrigerator
will automatically send an order to an online retailer when it is running out of milk,
eggs, and fruits. Your car will send a message to your mechanic to book a time slot
when it is due for servicing or when there is an imminent part failure.
Ray Kurzweil an eminent technology thought leader predicts that by 2029 a 1000
USD computer will have the same raw computing capacity as that of a human brain.
He also predicts that nano computers will be embedded into the human body in the
not so distant future. Biology and computer technology will merge. This will lead to
some kind of collective intelligence which will govern the Internet of Things.
This also leads to possibilities depicted in movies like the Matrix and Terminator
series where machine intelligence overtakes human intelligence and machines take
control and start destroying humans. Since I am an optimist I believe that we can
USD computer will have the same raw computing capacity as that of a human brain.
He also predicts that nano computers will be embedded into the human body in the
not so distant future. Biology and computer technology will merge. This will lead to
some kind of collective intelligence which will govern the Internet of Things.
This also leads to possibilities depicted in movies like the Matrix and Terminator
series where machine intelligence overtakes human intelligence and machines take
control and start destroying humans. Since I am an optimist I believe that we can
control this next phase of evolution which will see a convergence of Information
Technology, Biotechnology and Nanotechnology.
Technology, Biotechnology and Nanotechnology.