Disruptive entrepreneurship: Pros, cons and more

When it comes to staying ahead in any marketing scenario, many concepts and strategies come to mind. 

As an entrepreneur or a business owner, knowing how to navigate your way to the top in an already saturated and over-competitive market becomes the greatest advantage that will make the difference in the long run.

However,  there is a business model that is hardly spoken about.  Although,  it’s not a novel approach, when fully and effectively implemented will give you a lasting edge over your competitors in the market.  

The good news is that this business model is more suitable for startups and SMEs.  These set of businesses and entrepreneurs must seek ways to not just enter the market, but dominate the market that is already dominated by the whales and sharks. 

This is where disruptive entrepreneurship or innovation comes into play. And those who have mastered the act of disruption in their various markets become the winner of the day.

This article talks about disruption entrepreneurship, the misconceptions, and more.

What is disruptive entrepreneurship 

The word disruption tells of a process where a small or medium-scale entrepreneur with little resources can dominate and challenge successfully an already established and well-placed business.  

This usually happens as the incumbent or established business is poised to improve and perfect its services or products for its most assuring and most profitable customers. During this time, they unknowingly exceed the needs of their other customers and ignore their need for an affordable yet modest product or service.

When this happens,  a smaller business can take advantage of this loophole or gap and launch its products and services to target the low-end customer while it perfects its product or services for the larger market. 

How disruption takes place

Disruptive innovation or entrepreneurship takes place in low-end or new market foothold.

Businesses that prove disruptive start by adequately monitoring and looking out for those underserved segments or consumers in any business scenario and seeking to establish a foothold by delivering them more suitable products or services that meet their needs at a reduced price.

Over time these businesses improve their products and services to better serve a larger segment beyond the underserved. Gradually,  it gained a foothold in the larger consumer market by offering a better service at a cheaper rate than its dominant competitors.  When they have succeeded in becoming dominant as a result of this strategy, it’s safe to say that disruption has taken place.

A vivid example of this type of disruption is typical of Richard Brandson of the Virgin group.

For example,  he saw that the Aviation market was undeserving of its consumers, and launched Virgin Atlantic, which is a flight across the Atlantic Ocean. Though he was competing against the financial and established might of British airlines,  he was able to gradually scale up to scoop most of their customers and before they could realize it, he had already become a force to reckon with in the aviation market 

Also, disruption can be seen on the other hand as follows: when a business turns a large segment of non-consumers into consumers of a particular product and service.  

A good example was when Ford introduced the assembly line of batch production for his Model T car. This innovation gave rise to a large segment of people who had never driven a car to become consumers because it was cheap, novel, and innovative.

Pros of disruptive entrepreneurship 

1. Innovation

When it comes to disruptive entrepreneurship,  innovation is a the core of it. To be able to sway and convert the larger segment of consumers, businesses must be able to come up with something better and yet cheaper than their established competitors. 

2. Disruption 

The term disruption has often been seen as a negation.  However, in this context,  it’s on a positive note. Disruption in the sense that it fosters competition and shakes the status quo

3. New growth opportunity 

A business employing disruption as a business model is poised to grow massively both in management and revenue 

3. Increase brand loyalty

Disruptive businesses tend to have more loyal consumers because they appeal not just to their immediate satisfaction but also to their emotions.  This is what has made Apple stand out over time. To many customers, Apple Inc. is a cause to live for

Cons of disruptive entrepreneurship 

1. Risk

Disruptive innovation is risky as it may not always be successful in the long run. A business might succeed in disrupting a sector,  however, it may not turn out to be a success. This is because they may not have the managerial expertise in place and this may cause dysfunctional decision systems to be implemented which may harm the company. 

2. Disruption takes time and patience 

It’s not just as it seems.  Disruption is daunting and sometimes it may take years for the the mission to be accomplished 

Misconception about disruption 

The term disruption has often been mixed with any breakthrough that changes any market competitive pattern, and oftentimes, this is not the case. By the rule of thumb, every breakthrough in the market is not a disruption,  and all disruption does not also characterize a breakthrough. 

And so it is important businesses know what a business or innovative breakthrough is and what a disruption is, so that one may not be mistaken for another in any business scenario.

For example,  it has been widely accepted that Uber disrupted the cab market. But looking at the two criteria that demonstrate a disruption,  Uber does not fall into any of that category.  First, Uber never aimed to compete with any established cab company that has ignored a segment of their customers. Secondly, Uber did not in any way turn large segments of non-consumers into consumers. 

Therefore in light of this prevailing fact, one can conclude that Uber is not a disruptive business or innovation. 

Conclusion 

Disruption is a process and not an end as many suppose.  The idea of disruptive innovation can be a tool for challenging the status quo causing a major shift in consumer appreciation and also fostering growth in that sector. And for the most part, the startups and SMEs are the major benefactors. 

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Paul Umukoro

Paul Umukoro

Paul Umukoro is an astute content writer with makemoney.ng. He writes mostly on hot, contested, and valuable topics in business, finance, and technology. He majored in computer science.

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