Disrupt or be Disrupted

 I have mentored close to 30 early-stage start up businesses through my time at Seedcamp and beyond. Most use technology to offer better products and services than the established players in the markets they are disrupting.

The harsh truth is that at least half of these start-ups would not exist if the market leaders of the industries they were disrupting actually loved their customers enough. Take for instance the rapid and well-funded rise of fintech. Companies like Transferwise  and Revolut would have no market today if banks had not used their monopoly on international money transfers and currency exchange to rip off customers.

Now I am sure the banks were smart enough to have seen this new breed of financial disrupters coming, but they have clearly still opted to keep milking their proverbial cash cows. That decision is first a cultural one and will lead long term into a business cul-de-sac.

Taking the decision to disrupt your own organisation is extremely hard to do and requires something built into your cultural DNA. Look at GAFA (Google, Apple, Facebook, Amazon) as good examples.

Apple effectively killed their hugely profitable iPod by launching the iPhone, which had, at that point, zero sales. Facebook replaced the profile page as it's default with the newsfeed, Amazon threatened its physical book sales with the launch of the Kindle. All of those moves took guts, visionary leadership and above all a kind of ‘North Star’ focus around creating products and services that keep delighting customers.

So when Jeff Bezos says "Your margin is my opportunity?” it's a clear warning for any business today that puts it's margins before it's customers needs.  If you are a big player with healthy margins then disruption of your sector is inevitable. Either you will do it, or someone else is going to, the only choice you have is to control the disruption by doing it first.’

Ultimately though the winners and losers in the long term wont be defined by either scale or niche. They will be defined by a culture, company wide, that can stomach self disruption in the pursuit of super serving their customers, even if it costs them in the short term to do it.

Giles Pearman is founder of MyBrandTruth Ltd.

Helping businesses grow  by understanding why customers love them and  building brands that authentically deliver on their promises.