Theoretically we all want cheaper and better. But isn't there a limit to how often people will replace goods for something that, while less expensive, still costs money?
This is the real beauty of big-bang disruptions: no more early adopters or early adoption costs. A few trial users work with developers as collaborators and even funders, helping entrepreneurs find the right better-on-all-dimensions offering. Consumers only get involved at that point, and so the products and services they get are not only revolutionary but also combine the right technologies, features, and business models.
In a sense, the few true enthusiasts are the workhorses, developing big-bang disruptors for the rest of us. Once they get it right, consumers prove the point by adopting rapidly and across all market segments. Few people actually bought e-book readers until Amazon got it right with the Kindle, and then everyone made the jump. It was the right technologies with the right company--and the Whispernet network--behind it.
Once the disruptor is established, consumers will wait until the next real one comes along before they buy again. The Kindle Paperwhite for the same price or less than the original? Sold. Today's late-to-the-market smartphones? So far, anyway, the market seems to be saying move along, nothing to see here.
Big-bang innovation presumably endangers capital-intensive industries most of all. So does rebuilding U.S. manufacturing become less desirable?
On the contrary. Manufacturing becomes more important. But it needs to be much more flexible, using many of the same information-based tools that are behind the big-bang disruptors themselves. The major disconnect today is between makers and innovators. Makers want a steady stream of demand. Innovators, even at the largest companies, are rarely continuous or even predictable. This leaves manufacturing with fluctuating utilization levels and sub-optimal efficiency.
In the era of big-bang disruption, manufacturers will need to design facilities for rapid reconfiguration, develop more optimal-demand scheduling tools, and use data analytics to gain early insight into future markets. That way, they can better predict where markets are going and find the future market leaders to which they can hitch their wagons.
How nimble can manufacturing get? Consider the democratization of three-dimensional printers, which are now cheap enough to be a consumer product for small businesses and even individual artisans and enthusiasts. Devices from companies including MakerBot and 3D Systems turn every business into its own manufacturer, and the equipment can be reconfigured on the fly just by loading a different design. The practical applications so far are somewhat limited. But as a model and a platform, it clearly points to the future of manufacturing.
You mention in your article that M&A strategies need to change. Is there any point in acquiring businesses for their products, since those products are also subject to disastrous disruption? Or are you only acquiring companies for talent?
Depends on the role you intend to play. As a producer, you may want to achieve scale so that you can supply other people's big-bang disruptors. As an innovator, you may want to merge to corner talent critical to the experimentation process, or to enable taking the lead on the creation of a new development platform. But buying existing businesses for their existing revenue streams will be increasingly risky. Current product revenue will become harder to forecast as the risk of disruption rises. And whatever time it takes to absorb and integrate an acquisition is time lost for innovation--a potentially-fatal delay.
Does brand become more or less important in this model? I can imagine arguments on both sides.
Again, that depends on the role you play. End consumers are likely to value brand less as they trust other consumers on evaluation sites and social networks more: a feature of big-bang disruption we call "near-perfect market information." Hot products that are market tested and proven will generate and determine brand strength. And famous brands that are disrupted, like some leading phone and PC makers, will struggle to best monetize their brands, especially if they wait too long.
On the supply side, brand can remain important as an indicator of reputation, good and bad. The brand will stand for the history of delivering on promises...say, to deliver 10,000,000 units in 30 days. One PC maker was recently caught up short when its newly-launched Windows 8 notebook got great early reviews, forcing the company to put the unit on backorder for 90 days. But of course 90 days may as well be forever. They lost the sales and damaged the brand.
Even more important than delivering products that gain sudden popularity is servicing them: solving user problems quickly and effectively. In the era of big-bang disruption, the biggest determination of brand value may well have little to do with marketing and advertising and much to do with the strength of customer service and support. That's another reason to cultivate lifelong relationships with trial users. Through knowledge bases and user forums, they may become a volunteer force of customer support agents far more effective and trustworthy than outsourced partners.
How do small businesses and start-ups take most advantage of big-bang disruption?
Small businesses and start-ups need to secure their role in the entire cycle of a big-bang disruption.
They must develop the predictive capability to understand when and by what measure a big-bang disruptor will next arrive in their industry. They have to focus relentlessly on core skills of delivering new products and services reliably and at scale, with virtual partnering with the right suppliers, assemblers, and retailers. They need to be prepared, even before succeeding, to exit quickly when saturation is achieved and sales (and margins) begin to collapse. And they must choose an end game. If they are a "once and done" competitor, then they need to focus on a timely sale of the company at a top-of-the-market price. But if they aspire to being a serial disruptor--a traditional company such as 3M or a modern-day counterpart such as Google, Pixar, or Amazon--they need to study the culture of innovation and honesty such companies embody, and code it right into their corporate DNA.
If a company is small because it's lean and mean, then it's already two steps ahead of larger, incumbent competitors. If it's small because it hasn't figured out what it's good at, then the big-bang ecosystem will broadcast that defect quickly and decisively.
