Five laws of disruptive business thinking

Natwest

Disruptive businesses make a big splash in the media, but how does the thinking behind them come about? We look at the key rules of disruptive business thinking.

The word ‘disruptive’ used to refer to poor behaviour in the classroom, or the impact of strikes on the railway. But the tag is now far more likely to be linked to new types of business, where market value often outweighs investment and costs. Both Uber and Airbnb entered the already crowded markets of minicabs and holiday lets, but their rethinking of the entire model was what saw them race to the top at a pace traditional businesses could only dream of.

The media can’t get enough of them, and their business growth was largely driven by digital-native millennials who had the technology. Both are now large enough to commission television ad campaigns and PR drives to mop up the older generations.

So how can other start-ups in diverse sectors use this model to dominate (or at least radically change) the marketplace?

1. Find the gap in the market

Finding the gap may require mentally dismantling your target market and rethinking it from scratch. How would you start if you were the first one into the market, or what can you do that no one else can? Uber has as many detractors as fans (as is often the case with disruptive models), but there’s no denying it does away with the lottery of knowing which cab company to ring for the fastest and cheapest journey.

“Disruptive ideas come from having an attitude to challenge and push to improve established ways of doing things,” says Jas Bagniewski, CEO of innovative mattress retailer Eve Sleep. “I think if you try to improve every aspect of an industry, becoming disruptive is inevitable.

“When we started, we looked at how we could improve every aspect of the traditional mattress-buying experience. That way of buying – going into a showroom and lying down awkwardly for 10 minutes – is broken. We offer a better experience for customers because you can buy online quickly and easily, we offer next-day free delivery and you have 100 nights to try the product. By selling direct to customers, we can also offer a premium product for a better price.”

2. Be a true original

The first thing any business will need to do is ape the old Apple slogan of ‘think different’. It may be a business-speak cliché to speak of thinking outside the box, but disruptive entrepreneurs need to do little else in the initial stage of their start-up. Without that spark and a USP, their business is just another ‘me-too’ company that could simply get lost among the competition.

True disruptive thinkers and entrepreneurs are few and far between. So great ways to disrupt often come from teams of thinkers coming together to create a business, or outside experts being brought in to rethink a market. You want the kind of idea that makes people wish they’d thought of it.

“I think if you try to improve every aspect of an industry, becoming disruptive is inevitable” Jas Bagniewski, CEO, Eve Sleep

3. Solve a problem

“Ours was a consumer problem rather than a gap in the market,” says Tom Cavill, co-founder of property investment business Bricklane.com.

“We started with the problem that we and many friends had, then worked hard on an innovative solution. Before Bricklane.com, you either had to scrape together a huge deposit and invest all you had with a mortgage, or you were shut out of the market. We allow you to own a stake in a property [with others], whatever your situation.

"We feel we’re disrupting several markets: we allow first-time buyers to keep up with the market as they save and allow those who can’t or don’t want to buy to receive the financial benefits of ownership. Renters living in our homes also get better service and stability than is average in the market.”

4. Don’t forget the small print

It’s easy to see disruptive thinkers and doers as the anarchists of the business world, but none of them would get anywhere without considering the legal or ethical implications of their new ways of thinking and working.

If you’re testing the boundaries, you can be sure lawyers will want to as well, especially when people start putting large valuations on your business. Make sure the way you wish to operate complies the law and financial regulations because small slip-ups can be costly. If your app is bumped from app stores for minor violations, you could be set back by months.

5. Think about time efficiency

Millennials drive the market for disruptive business and famously want everything done now, whether it’s their food delivered or their finances sorted.

Airbnb took a concept that was only accessible on obscure community pages and brought it to the fore, saving hours of searching and competing with hotels along the way. If you can reduce complex tasks to a couple of clicks, you could be on to something.

“We’re disrupting the automotive retail space by consolidating the customer journey of buying a used car,” says Maximilian Vollenbroich, co-founder of Carspring.co.uk, a business that allows you to search for the car you want, find financing and arrange delivery of your pre-checked motor all in one hit. “Whereas a consumer would have to do transactions with multiple parties – from the dealer, financier, insurance and warranty provider and breakdown cover – at different places and times, we enable them to sort this all in one place.”

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