Disruptive Innovation: Product versus Platform
DISRUPTIVE PLATFORMS often have a bigger impact than disruptive products. Some examples:
- Uber owns no vehicle, but is now the largest taxi company in the world.
- Alibaba has no inventory, but is yet the biggest world retailer.
- AirBnB owns no real estate, and yet became the biggest provider of accommodation.
Unlike disruptive products, low-end disruptive platforms can change the dynamic of an entire industry. It is more difficult for incumbents to respond to disruptive platforms than to disruptive products. The massive number of people attracted to platforms makes it difficult for incumbents to respond to them.
While DISRUPTIVE PRODUCTS offer new options to buy, disruptive platforms cause societal shifts. They have major effects on people’s lives, how they interact and how they work. For example, they trigger platform-based jobs that many people make a living out.
⇒ What other examples of platform disruption do you know of?
Singh, S. (2012). New Megatrends. Implications for our Future Lives. UK: Frost & Sullivan, Palgrave & Macmillan.
Vazquez Sampere, J. (2016). Why Platform Disruption Is So Much Bigger than Product Disruption. Harvard Business Review, April 2016.