Even successful companies don’t live forever. And now Big Bang Disruption—where new goods enter the market immediately, better and cheaper than existing products—is converting disruptors to the disrupted. Learn from the strategies of the Big Bang survivors.
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Finding your company's second act
When Big Bang Disruptors take off, they do so quickly, rising and falling less like a curve and more like a shark’s fin. Now, there are only two market segments: trial users and everybody else.
Business leaders that focus on making their product and customer experience as compelling as possible often restrict existing assets—and the organization’s ability to flex when change bites.
Eight habits can make big bang disruptors highly vulnerable:
1. RUNNING TOO LEAN
Companies fail when they devote all their resources to a single product—the first act.
2. HAVING THE WRONG CAPITAL STRUCTURE
Companies should raise substantial outside capital for expansion and production much earlier.
3. BEING TOO FOCUSED
“Happy accidents” are invariably the source of second act success.
4. FAILING TO RETAIN FOUNDERS
Founders are often sidelined into engineering roles they find too constraining and leave.
5. OVERSERVING SHAREHOLDERS
Public investors—and the research analysts who advise them—are even more conservative than traditional creditors.
6. TRUSTING IN LUCK
Buying a winning lottery ticket does not make you an expert in lotteries.
7. RELYING ON REGULATORS
Increasingly, incumbents are turning to long-time regulators to derail insurgents and buy time.
8. SERVING THE WRONG CUSTOMERS
“Winner takes all” phenomenon means that first product customers show up all at once, sending confusing signals about future sales and follow-on product potential.
Timing is everything. Companies that want to be sustainable
must put innovation at their core, experimenting and discarding
innovations in equal measure. Learn from the masters.
BUILD A PLATFORM, NOT A PRODUCT
Most sharing economy enterprises, including Uber, Airbnb, and TaskRabbit, have no physical assets of their own, but connect buyers and sellers while driving down the transaction costs that make interactions inefficient.
MAKE YOUR PRODUCT A SERVICE
Amazon Web Services, which generated US$718 million in operating income, hosts the software, data, and processing for millions of other enterprises, making it the dominant provider in the fast-growing cloud services business.
DON’T BE HELD BACK BY THE PAST
China’s home appliance manufacturer Haier has reconfigured nearly 64,000 employees into 180 micro-enterprises, each accounting for and sharing in its own profit and loss and launching dozens of innovative products.
MOVE RAPIDLY TO THE NEXT INNOVATION
INVEST IN OR ACQUIRE NEXT-GENERATION DISRUPTORS
EMPHASIZE COMPANY DEVELOPMENT OVER MARKET EXPERTISE
INVEST FOR VALUE
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