Are You Capitalizing on Disruptive Opportunities?

Peter Diamandis and Steven Kotler followed up their book, Abundance, with an exciting book on trends that are affecting our lives and business, called Bold: How to Go Big, Achieve Success and Impact the World. Their thesis is that many changes in the world today are no longer linear – where growth goes from 1 to 2 to 3 etc., but exponential – where growth compounds on itself.

A classic example of exponential growth is Moore Law which says that every 18 months the computing power doubles. It was based on the fact that Intel was releasing new generation of chips at that frequency and they were doubling PC computing power. Since then, this pattern has been observed in other areas of technology. See the difference by comparing the following: 30 steps of a meter each cover a distance of 30 meters; 30 exponential steps (1 doubles to 2, 2 to 4, 4 to 8), take you a distance of a billion meters or the ability to orbit the Earth 26 times.

Their framework focuses on 6 Ds. The first three are:

• Digitization – when you create a copy of a document, you now have two; create a digital version it can go viral, creating countless “copies”.
• Deception – in the period immediately after something is digitized, exponential growth goes mostly unnoticed. Only after a critical mass is achieved do the doublings become visibly disruptive.  We often refer to the eventual exponential growth as “viral”.
• Disruption – while the initial release of an innovation may seem insignificant, once it becomes exponential it creates a new market which we call disruptive. For instance, when the iPhone was first released, the focus was on telephony. Yet the ability to take pictures and send them to others easily disrupted he already dying analogy industry and the nascent replacement – dedicated digital cameras.

The first set sets in motion a chain reaction that produces the second set:

• Demonetization – the process of removing money once paid for goods and services, transforming industries. As Chris Anderson demonstrated in his book Free, companies today make lots of money by giving things away. Today, you can use a free browser, to create free documents using Google Docs, send Tweets, read news, etc., using the free wireless access from your local coffee shop… all because these providers of these services make more money from other services/products. Skype demonetized long-distance telephony and Craigslist demonetized classified advertising.
• Dematerialization – the vanishing of good and services. Digitalization of pictures, not only let to the end of the film industry but dedicated cameras for everyday capturing photos. With the average smart-phone today you may not need dedicated products such as the digital video camera, two way video conferencing, GPS, liberty of books, record collection, flashlight, EKG, video game arcade, tape recorder, maps calculator, clock, etc.
• Democratization – when the hard costs drop and access increases, people are empowered in ways they never were before. The Arab Spring was facilitated by the availability of free services like Twitter and Facebook; the ability of anyone to take and transfer photos/videos has enable citizens to report on police abuse, potholes, traffic jams, and other issues affecting people. In the Third World, access to cell phones, with access to internet payment systems, is spurring entrepreneurism by everyone. The efforts of Google and Facebook to use balloons, satellites, and drones capable of providing them with free or ultra-low-cost internet access, create countless new opportunities.

Over a decade ago, Clayton Christianson told companies that the only way to avoid being disrupted by others is to disrupt themselves. Diamandis and Kotler take this one step farther: the future is full of disruptive opportunity and encourage us to take advantage of these opportunities (e.g., 3D printing being one).

Are you and your team are paying enough attention to both the disruptive stresses and responding, as well as to the opportunities and capitalizing on them? Share with us how you’re studying the impact of the 6 Ds on your industry/market, your company/customers, and the new directions you’re taking

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