Nobody thought someone like Jack Ma would ever become a disruptor. Jack Ma failed at every venture and profession he had ever set his hands on until he founded Alibaba. No one would have thought someone who was rejected by a lot of establishments, including the police and KFC, would ever become a disruptor in the global retail and wholesale business. Today, Jack Ma is regarded as a business leader who rose from humble beginnings to establish one of the most successful businesses in the world. He is a businessman, an investor, and a philanthropist who supports an open market-driven global economy.
Jack’s discovery of the internet and his fascination with the endless opportunities it presented largely influenced the founding of Alibaba, China’s largest and most valuable internet company in 1999 alongside 18 others. The company made history in 2014, setting a record as the world’s largest public stock offering at $25 billion with interests in areas like e-commerce, online finance, retail, and entertainment. It is the world’s biggest online trading company with its three main sites, Taobao, Tmall, and Alibaba.com hosting millions of merchants and small businesses all around the world.
Alibaba was founded with the interest of small-scale businesses at heart, evidenced by its pioneer work of B2B marketplaces. It started operations by helping small scale Chinese businesses look for clients abroad. After winning $25 million twice in 1999 and 2000, Alibaba started to turn in huge profits from 2003. The income stream for the company was diversified into B2C (Tmall) and P2P (Taobao) trade. The Chinese policy of open trade adopted in 1979 opened up China to the global market. The market restrictions, however, meant that the cost of production remained high, and small-scale businesses were restricted to the local Chinese market, at the mercy of larger—well-funded companies. Alibaba became the bridge between the small scale business in China and the rest of the world; the monopoly of large clearinghouses was shattered.
Alibaba paved the way for how to become a disruptor by offering small businesses a simple, fast, and convenient way of locating international clients for their goods and services, effectively bypassing legislative and administrative bottlenecks. The platform monetized its buyer to buyer platform by simply charging commissions on transactions. It also ventured to offer sellers annual subscriptions to fine-tune their personal shop via SEO and larger product listings. Alibaba operates without warehouses and remains a pure B2B platform and paved the way for similar ventures around the globe.
So How Do You Become a Disruptor?
Market disruptors defy boundaries and proffer solutions that cause disruptions in their chosen industry to existing problems, just like the example of Alibaba illustrated above. The digital age of the 21st century has made it easy to become a disruptor. Market disruptions become inevitable as new tech is rolled out every day. Many established digital firms today began as market disruptors. Being a disruptor is not enough however, you have to take steps to remain at the top otherwise your company will quickly fade into the background.
There are three principles you should keep in mind if you want to become a disruptor;
- Don’t be afraid to start from the barrel bottom—you shouldn’t be constrained within the environment of what is already available.
- Select an industry and address the gaps in the available services—you should solve these problems with solutions outside of the traditional methods.
- Leverage on Technology—this is one of the biggest enablers of disruptors in the marketplace. With technology, the effect of your actions will be felt across the globe.
1. Starting Again from the barrel bottom
When disruptors veer away from the status quo, they are in a hurry to beat the competition to the market. They dominate the market and build on the momentum to entrench their brand within the public space. People find their brand exciting and invigorating, leading to an entrenched culture of brand loyalty. This is what companies like Amazon, Uber, and Netflix have been able to accomplish.
Airbnb is presently valued as a $25 million company and regard as a success in the hospitality industry. It did not become a success story overnight though; the company nearly folded up in the early years after it was founded. Airbnb was founded in 2008 and acted as a market disruptor for the hospitality industry in the United States.
The company is a vacation rental online marketplace; the first of its kind in the world. Its business operations include the maintenance and hosting of a hospitality marketplace accessible to consumers through a phone app and a website. Clients going on holidays or traveling to any part of the world can log in to the service and book hotels registered with the business at a cheaper price than if they had booked directly.
Before becoming such a global success, the company nearly collapsed because a lot of investors believed that the idea would not work. According to a medium article of one of the co-founders, Brian Chesky said seven investors rejected the company’s idea; this forced the founders back to the drawing board. The team capitalized on the US election of 2008 to rebrand itself as a people-friendly business. The special edition cheerios cereal boxes made for the two Democrat candidates at the time; Barrack Obama Join McCain made a lot of money for the company to stabilize itself today.
Apple is another example of a company that had to go back to the drawing board to save itself from imminent collapse and bankruptcy. Although Apple started off as a computer-making company, it is known today as a luxury brand that produces mobile phones, wristwatches, and other gear much more complicated than the Apple 1 or II that made the company famous through the 70s and 80s. Talk about how to become a disruptor in a big way. Apple has come a long way from creating just Macs and iPods to revolutionizing the tech industry with a retinue of high-tech luxury products. Although Its first computer in 1976 was barely noticed—it was the success of the Apple II in 1977 that put the company on the path to greatness.
The departure of Steve Jobs from the company in 1984 took the company through 12 years of a downward spiral; development was stalled and people were looking to Microsoft, the arch-rival of Apple, for guidance in the tech industry. The company was operating at a loss when Steve Jobs was rehired in 1997. One of the first things Jobs did to turn the fortune of Apple around once more was to forge an alliance with Microsoft to create a Mac version of its office software.
This marked the start of an explosion of high-tech products and services from Apple. The company revamped its computers and introduced the iBook as a personal laptop. Mp3 players, the iPod series was introduced as well as a media player software called iTunes. It thereafter ventured into the world of mobile telecommunications, producing the iPhone series which propelled the company to even greater heights. The death of Steve Jobs in 2011 left the world in doubt regarding the viability of Apple. The company however surpassed expectations after Tim Cook was appointed as CEO. Apple has grown to the level of large Oil Corporations, displacing Exxon Mobil as the S&P’s 500 most valuable companies.
2. Addressing the gaps in the available services
Companies have achieved success by being the connection for a missing link, solving a problem or filling a gap in existing services. You can become a disruptor in the marketplace by identifying and seizing the opportunity in every situation. The cab-hailing app, Uber, fits into this disruptor role perfectly well. Many people do not know that Uber was initially called UberCab when it was launched in 2010. The company received its first cease and desist letter that forced a name change to Uber.
To become a disruptor, one should study a company like Uber that stepped in to address the gap in taxi services beginning from San Francisco. The concept of providing safe, easy, and classy transportation through the organization of independent cab drivers on a single platform was a feat not seen before in the American transportation industry. The cab-hailing app had a funding problem in the early days until a deal was reached between its founders and Marc Andreessen in 2011.
The company has been able to disrupt transportation services in over 900 urban centers across the globe with an estimated 78 million users on its mobile app. The app has also grown from a ride-sharing app to cornering about 24 percent of the food delivery market in the United States alone. These days Uber is known for a range of services which include; ride-hailing, food delivery, package delivery, couriers, and freight transportation. The company also collaborates with Lime to lease electric bicycles and motorized scooter rental.
Uber’s business model was so revolutionary within the sharing economy that there is a ripple effect on other industries. Although Uber has been criticized heavily for its treatment of its drivers as independent contractors, increase in traffic congestion in urban areas, and disruption of the taxi business in the United States. It is still a good example of how to become a disruptor in already established industries.
Another way of addressing the gaps in the existing services is by introducing the service where non-existed. Here you’re taking advantage of the prevailing situation and providing alternatives for people. A good example of a company like this is Opay founded by Opera in 2018. When the company moved into Nigeria, it started as an online wallet app and a means of sending money between bank accounts without the barrage of bank charges being unleashed on people by the Nigerian government.
With a $50 million funding, the company broke into the Nigerian market, moving forward to providing loans for small-scale businesses on its app. It later integrated bike hailing services, cab-hailing services, food delivery, logistics, and sports betting. One could literally do anything on the app which was seen as revolutionary.
Unlike Gokada, which restricted itself to Lagos, Opay spread its tentacles across some major Urban centers in the country, including; Lagos, Ibadan, and Akure (all-important urban centers in the southwest). The rise of Opay was checked mostly by Government policy. The Nigerian government has an unhealthy history of killing startups through Draconian policies when they start to make profits. This should not discourage you from your journey to become a disruptor.
3. Leverage on Technology
The digital age of the 21st century is being described as the second wave of industrialization. Just as the invention of the steam engine changed the world and made it smaller, so too has the invention of the computer and the internet. The internet and social media has made the world a true global village and has made business transactions so much easier than they were 50 years ago. Matter of fact, the biggest companies in the world today are internet and data companies (Google, Apple, Facebook) and not oil corporations.
Increased internet coverage, new technology, and an increase in the number of mobile phone users around the globe have changed the way business is done. A digital company in 2021 can easily disrupt the market by leveraging streaming services, hailing services, electronic wallets, blockchain technology, and social media. The ability to use these technologies that did not exist 50 years ago has reshaped the way consumer markets operate. With technology, there’s an increase in information and awareness. Businesses can communicate directly with their customers, and the role of the middle businessman is more or less taken over by high-tech apps.
Netflix is an example of a disruptor that leveraged technology to become a giant in the movie streaming industry. The online streaming platform is considered the first major disruption to the television and movie industry. Because of Netflix, more people have moved on from traditional television shows and cinemas. This is because Netflix provides a much less expensive alternative to cable television services. Since you can access the streaming services of the platform from anywhere on the globe where there’s an internet connection, millions of people depend on Netflix for streaming movies and TV shows.
Netflix was established in the era when the VCR player was going into extinction, the VCD and DVD were gaining global acceptance and cable TV was also on the rise. Also during the same era back in 1997, video rental was a booming enterprise and Netflix came late into the game as an online video rental store. Users would order a movie from the store’s website and wait for the DVD to be delivered physically via mail. When the customers were done, they would post the DVDs back to the store via mail.
After a few years, Netflix decided to change its business model to a subscribers-based model. The new model allowed customers to keep a borrowed DVD for as long as they liked. They couldn’t rent another DVD however until the previously borrowed movie had been returned. Before Netflix, however, there was Blockbuster. This video rental company had a physical presence unlike Netflix and depended on having a physical presence in major cities across America. The gradual move of Netflix from renting physical DVDs to digital streaming services put giants like Blockbuster out of business.
Ironically, Blockbuster had a chance to buy Netflix for $50 million back in 2000, the CEO however refused the offer. Blockbuster filed for bankruptcy in 2010 while Netflix had a market cap of $209.7 billion and a share price of $476.89 as of July 2010.
4. Have Capable Hands in Charge
The 21st-century business space is a very competitive one. This means it is not enough to just become a disruptor in the market, you have to firmly entrench yourself at the top so that the competition does not run you out of business. Disruptors can quickly fade into the background if there’s no innovation and capable leadership to help take advantage of the momentum. If you fail to innovate and evolve, your share of the market will diminish over time. What made your firm attractive when you started the business may start to work against it. At this point, you’d have no choice but to review your plans.
5. Information is Power
Information is power, this is why you should also keep learning about your industry. Keeping abreast of the latest developments can help your business disrupt the market and stay on top. Hiring capable hands also help in immense ways. One of the reasons why tech companies like Alibaba have been able to thrive is the quality of staff being hired and the training process they go through as they pass through the firm.
On a Final Note,
Your development partners also matter. Partners here being the collaborations made at different stages of providing a service or creating a product. The business environment of the 21st century depends on interconnectivity and interdependence between various industries. For example, the mobile phone industry relies on the mining industry and hardware producing companies. Regular businesses and big companies also depend on website companies to build and maintain an interactive website for their business. Firms like Iconic digital world helps you as a business owner to become a disruptor and capture your selected industry. You can get help with not only setting up your website, but maintaining it seamlessly as well.