Buzzwords: Disruptor

A company, technology, good or service that is so innovative and widely adopted it disrupts an existing market

Originally Published on November 1, 2019 by Jennifer Fergesen on Comstocksmag.com

In ordinary English, “disruptor” might conjure up images of a kid acting out in class, or someone holding up traffic. Among the startup set, though, disruptor has become one of the highest compliments one can receive — or give to oneself.

“The word ‘disruptive’ in the startup industry has a very positive connotation, but in the general public it doesn’t,” says Laura Good, co-founder of the accelerator StartupSac. In ordinary English, “disruptor” might conjure up images of a kid acting out in class, or someone holding up traffic. Among the startup set, though, disruptor has become one of the highest compliments one can receive — or give to oneself.

The current usage comes from the business theory concept “disruptive innovation,” coined in 1995 by Clayton M. Christensen and his collaborators. They defined disruption narrowly, reserving it for small companies that beat out competitors by catering to overlooked market segments. In 2015, at the height of the word’s buzz, Christensen took to the Harvard Business Review to chastise what he saw as the misuse of his coinage. “If we get sloppy with our labels, … then managers may end up using the wrong tools for their context, reducing their chances of success,” he warned. 

The Buzz

“Every startup I work with likes to say that they’re disrupting,” says Good, whose organization connects Sacramento-region startup founders with information, investors and each other. While she considers many of her partner startups innovative, she hesitates to call any of them disruptors. “It takes time to really be able to say that (an innovation) is disruptive,” she says.

Good says startups like the label because they imagine it will attract investors who are holding out for the holy grail: a company that will create and lead a new market. Often, these startups will pitch themselves as reinventions of well-known disruptors, say the Netflix of training modules or the Airbnb of parking. Risk aversion is a common trait among investors, though; some won’t want to gamble on a startup that doesn’t have a proven market.

The Word

Louis Stewart, the first chief innovation officer of the City of Sacramento, sees a lot of self-styled disruptors through his work with the city’s Demonstration Partnership Policy. He says the public sector’s ability to encourage widespread adoption of a technology can help these startups reach their disruptive potential. “Companies should not necessarily look at government and regulation as bad, but look for opportunities to enhance the lives of the citizens through evidence-based policy work,” he says. 

Read entire article here