Help! My startup’s not disruptive!!!

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It’s terrible, tragic even.  My startup’s not disruptive!  It won’t change the world, or even an industry.  It won’t lay waste to the antiquated detritus of 20th century business, even by accident.  What am I to do???

Ok, that’s a bit tongue in cheek, but as you can appreciate, the impact of companies like Uber, Airbnb and even Apple can make it look like disruption is an indispensable part of the new economy.  Disrupt or perish, right?

In my view, a lot of what gets thrown up as being disruptive is nothing of the sort.  If you take Clayton Christensen’s’ original work on the subject, you can mount an argument that disruption can’t be planned anyway, so why bother?  It’s a serendipitous outcome of an innovation, not something that can be planned in advance.  No one is prepared for disruptive innovation; if they were, it wouldn’t be disruptive, right?

One of the reasons that disruptive innovation is such an influential idea is that it suggests that there’s a shortcut.  A shortcut to massive growth that avoids the need to carefully plan and execute a business idea over a long period of time.  Who wants to spend 30 years building a successful business when disruption offers the change to do it in five?  It gets around the pesky issue of eking out progressively larger market share based on well-honed strategy, tight cost control and incremental product development.

And of course, it’s even more appealing in the startup space.  Want to compete with Microsoft?  Hell no, we’ll just disrupt them!

But of course, disruption has become part of the new orthodoxy.  If you’re not disruptive or not aiming to be, you just don’t fit in quite as well as you might have in the past.  Want investment for your startup?  Be disruptive!

If you’re not disruptive, it makes it just that little bit harder to obtain capital then if you are, because most early stage investors want high returns in relatively short periods.  That doesn’t mean that non-disruptive startup don’t get funded, but it’s a lot easier to make the case for rapid profit if you can grow unencumbered by traditional market completion.

I’m a bit of a contrarian at heart, so I tend to recoil from the hype surrounding disruption.  But I think it’s important to remember that there are lots and lots of very successful businesses out there that aren’t disruptive and never will be.

There was a good article in Harvard Business Review last year that made just this point.  The author pointed out that “the vast majority of profit from innovation does not come from the initial disruption; it comes from the stream of routine, or sustaining, innovations that accumulate for years (sometimes decades) afterward”.  As a case in point he offers Intel, who has made about $287 billion from the series of chips that built on the original X386 chip introduced in 1985.  Not bad for a non-disruptive business, huh?  Then there is Microsoft with Windows ($325 billion) and even Apple with the iPhone ($150 billion).

I also read a piece recently (also from HBR) which talked about why bootstrapping a startup is the most successful approach to a new business in terms of raw numbers.  They criticise the ‘big money’ model that gets all the headlines for startups and point out that most of these business are better off taking it slowly – working out their business model, tuning their product to the market, and learning to get by on less, rather than more.  This article was published before the Innovator’s Dilemma, so you could argue that things have changed and maybe they have.  But I’d wager that the companies that will dominate the world in 20 years’ time are likely small and humble at the moment and will take all that time to ‘disrupt’ their competitors!

Returning to my own startup, what does this mean?  Having recently completed a modest Kickstarter campaign, we’ve been asking the question of ‘what’s next’?  One answer to this question is to ‘go big’ by raising money and taking the idea global.  That’s entirely possible, but some water needs to go under the bridge yet.

And of course, most people get the idea of what we’re doing with WineMinder, but it doesn’t immediately bring forth visions of global dominance.  Which makes it that little bit less attractive compared to rapidly scalable, potentially disruptive ideas.  And that just suits me fine, to be honest.  But occasionally it can make you wonder if its worth bothering with all the hard work and worry (and of course the fun and occasional euphoria!) if you’re not going to disrupt something – other than your family life and your bank account!

Again, being a contrarian, I wonder if a lot of profitable – but not disruptive – opportunities are being left unaddressed in the rush to creatively destroy the status quo.  And maybe my startup is in that space.  And if it is, I’ll gladly make decent returns on my efforts while watching some more disruptive ideas burn through other people’s money, before being disrupted by the next wave of, well, disruptive innovation!

In which case, I don’t really need help at all…at least, not because my startup isn’t disruptive!

Kickstarter success – what I learned!

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What I learned from my Kickstarter compaign

I recently completed a successful kickstarter campaign for a consumer electronics product called WineMinder (www.wineminder.com.au) and I think I’d have to say that I learnt a few things along the way!

Firstly, it’s incredibly rewarding to have your idea validated, and not just by people who know you and the project intimately.  That’s probably a given, but worth saying none the less!

More interestingly, there were a couple of unexpected outcomes from the campaign, which didn’t get much coverage in the Kickstarter guides and commentary that I looked at before launch. These were;

  • A massive increase in brand awareness.  Just going on website traffic alone, we had as much traffic to our site in the first day of the campaign as we had for the entire 3 months prior, and increased total new visitors to our site by a factor of 6!
  • We had two approaches for investment in the business and one from someone offering to be our agent in northern Europe.
  • Our top pledge was the biggest mover, even when it ran out and I created another, similar pledge for the same reward at a higher price level!

Many would argue that we could have found out this last point if we were following a lean startup process, but it hadn’t come up in any previous discussion – maybe because we hadn’t been forced to develop varying offers before the campaign.  So a lesson there is to get really creative with offerings, even if you are following a lean startup methodology.

Of course, many of the other things I learnt were much more commonly discussed, like;

  • The euphoria of the first day or two, where early pledges really get things going – followed by the nail chewing when this drops off temporarily!
  • The need to prepare early and well to make sure you hit your targets, because very few people are likely to stumble upon the project via the Kickstarter site itself.
  • The fact that you’ll spend the last week of the campaign mailing, texting and ringing people and just generally making a pain of yourself until all those people that said they’d pitch, get off their backsides and actually pledge!

I’d definitely do it again.  The funding we raised will be extremely useful, the brand awareness we’ve developed we simply couldn’t buy at this point and the validation of the product and insights into pricing structures was unbelievably valuable!

And, of course, it was just straight out fun!