Digital Disruption

A new book takes a look at what may be the future business model and it isn’t the large corporation.

“Digital Disruption” by James McQuivey is a small 150-page book that asks a huge question: “Is the age of the big corporation over?” Technology has enabled young entrepreneurs to start businesses, some of them quite profitable, without a labor force, a lot of capital, or much of an infrastructure. 

McQuivey, an executive of Forrester Research (a company that advices startup businesses), calls these “disposable companies” in that

“they exist solely to accomplish a particular task and can rapidly scale up, drawing on mercenary employees with whom they will have no permanent relationship. They can also assemble to serve a particular need, serve that need, and then dispose of the company.”

As an example, the book cites the tale of 12-year old Thomas Suarez who builds smartphone apps when he isn’t in school. How about a company, Ferrokin BioSciences, which sells molecules that address blood disorders? It has no physical office, only uses wireless phones and internet connections, and has employees some of who have never been met.  Mr. McQuivey calls these people “disruptive innovators.”

“Economists talk about trends that reduce barriers to entry. The force of digital disruption doesn’t just reduce barriers to entry, it obliterates them.”

This book builds on a 1997 book by Harvard Professor Clayton Christensen. The book, called “The Innovator’s Dilemma”, argues that large, well-run companies can be destroyed by “disruptive innovators.” However, while Christensen focused only on a very well-defined set of circumstances, McQuivey now sees this as a universal norm. 

“Digital tools allow digital disruptors to come at you from all directions – and from all ages, backgrounds and nationalities. They are equipped with a better mindset and better tools. Thousands of these disruptors are ready to do better whatever it is that your company does.”

In other words, a completely new business model that large corporations may not be equipped to handle or fight. 

Is there a defense? Yes!!!

Mr. McQuivey argues that large corporations need to start thinking like these digital disruptors.  Companies MUST make this priority one. He says corporations must give up the metrics like return on investment and, instead, focus on return on disruption (ROD). 

While McQuivey focuses in on the technology industry I see this as having some real applications for the arts where, sadly today, creativity and innovation is strangely lacking. 

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