1. Disruptive Innovation
Simon Sturmer
19 Apr 2012

2. Innovation
Quick thought experiment
○ Think of the fastest-growing, exciting, most
innovative business of our time..
○ Now fast-forward 15-20 years

3. Definition & Origin
Disruptive Innovation - Clayton Christensen, 1997
"An Innovation (product, service or experience) from a
newcomer that enters a market displacing or crippling
existing businesses"

4. Examples
New Entrant vs Incumbent
○ iTunes vs Sony Music
○ Amazon/Ebay vs Brick & Mortar
○ Skype vs Traditional Telco
○ PC vs Mainframe

5. Disruption
Without market disruption, would we even
have startups?
○ Big businesses get bigger
○ Rich get Richer
○ New Entrants don't have the capital, brand or
distribution channels

6. Sources of Disruption
○ New Distribution Channel (the Internet)
○ De-regulation, Geo-political
○ New Markets (China, Mobile phones)
○ Disaster, Financial Crisis
○ **Accelerating Growth in Technology** ...

7. Black Swan Events
Nicholas Taleb - "Fooled by Randomness" - 2004
"A surprise event with major impact which, in hindsight,
seems obvious"
○ The rise of the Internet
○ Google -
○ The iPhone
○ Financial/Economic

8. Unpredictability
Ideas that are disruptive
○ Popularity vs Potential to be Revolutionary
● 5-10% - Brilliant, Majority think it's insane
○ Not necessarily, a new company, but a new entrant
to an industry (iTunes)
○ Inherently unpredictable (Black Swan), but in
hindsight it's obvious (Google)

9. Moore's Law
Gordon Moore, 1965
"Number of transistors doubles every 1-2yr"
○ Started with 5 data-points
○ Non-linear curve is extremely hard to identify at first
○ Applies to various fields
● Storage, CCD density
● Gene Sequencing
● Internet Growth

10. Ray Kurzweil's Extrapolation

11. Pace of Human Innovation
○ Every innovation the result of one or more prior
innovations
○ Think of Ideas as "procreating" and look at
innovation similar to population growth
○ Emergent Layers of Abstraction
● Life sciences (genetics, biology)
● Energy and clean-tech
● Internet

12. Coming back to the Web
○ Greatest new distribution medium since the
printing press (Dell, Amazon, Skype)
○ Prior to this, how many great innovators would ever
have their ideas see the light of day?
○ Globalization & lower barriers to entry
○ Internet itself is growing in a nonlinear fashion

15. Disruptive Market Entry
○ Entering a market as a cheaper, lower-quality or
lower-performance alternative (VOIP, CCD, E2W)
○ As technology improves, pushes the incumbent into
an ever-shrinking high-end niche
○ As growth crosses the "knee" in the curve, the new
entrant has effectively disrupted the market
○ Large companies often see this coming, but rarely
have the power or foresight to stop it

16. Present Day Examples
○ Mobile is doing to the PC what the PC did to the
Mainframe
○ Electric Vehicles (E2W - China)
○ 3D Printers
○ ARM - Intel

17. Exponential Growth of Computing

18. Projecting Technological Growth
○ Can't predict "Black Swan" -style disruptions, but
we can count on the bigger-picture growth
○ Looking at mobile computing growth purely
mathematically, by 2036:
● size of a red blood cell
● MIPS times 10^9
○ Applications in Medical, Clean Tech, Bio/Nano
engineering, Machine Learning, etc

19. Wrapping up
○ We're witnessing unprecedented growth in
industries such as the Internet
○ Due to predictable and unpredictable forces, new
entrants have incredible advantages
○ Regardless of Financial, Economic and Political
effects, the pace of human innovation increases
ever faster

20. Disruptive Innovation
Simon Sturmer
simon.sturmer@gmail.com
http://gplus.to/sstur
github.com/sstur
(will link to slides and references using github or meetup)
Thanks for your time.