• April 6, 2016

Disruption to Dollars: Flip Disruption into a Moneymaking Opportunity

In the idea economy, disruption is the norm. No industry is spared from the legions of innovative start-ups and ideas that evolve the status quo. Changes in consumer behaviors can also diminish revenue and drain the life from an industry. As a result, business as usual is no longer a winning strategy. The challenge is to find a new way to be competitive. One good approach: Flip disruptions in your favor.

In other words, rather than try to compete directly against a disruptor on its terms and turf, find a way to exploit or piggyback on the disruption for your company’s benefit.

The Music Didn’t Stop

Peer-to-peer (P2P) file sharing was seen as a debilitating force in the music industry. Musicians and copyright owners have struggled for years with declining revenues caused by disruptors like streaming music services, digital music sales, and ad-based subscription models. Changes in consumer behavior added to their woes, specifically piracy through widespread digital music sharing between peers. This change left artists and record companies in the disadvantageous position of having to hunt down and prosecute fans. Not exactly the best thing to do when your aim is to increase the fan base.

Spotify has walked the line between fans and artists successfully by paying record labels each time a song is streamed. Listeners are exposed to paid advertising or pay a monthly fee and can listen to songs on demand.

Music industry veteran Tommy Funderburk is attempting to flip the disruption into a new monetized model with Muzit. Specifically, the company uses Big Data technologies to connect artists directly to the huge P2P fan base to build direct and lasting relationships. This also opens a channel to offer fans merchandise, first access to new music, concert tickets, and other items and services endearing to fans—and profitable to the artists.

“Muzit was created to be an artist- and fan-friendly alternative to existing ‘anti-piracy’ efforts,” said Funderburk, CEO of Muzit, in a statement to the press. “We’re copyright owners ourselves. We’ve actually lived the impact unauthorized downloading has had on the music business. But we also know the relationship between artists and their fans is sacrosanct. No artist wants to be a part of any effort that alienates their fans.”

Investigate and Imagine 

The way many disruptors find disruptive innovation is examining existing business models and then evolving them to their advantage. Think Square, a company that is upending the payment industry by providing credit card processing for micro-merchant processors.

By flipping the model—whether it’s a traditional model (the payment industry) or one that has already been disrupted before—the enterprise can follow a direct path to innovation. The key to success is keeping tabs on the value of the disruption, namely the value to the company and to the customer. Focus on the end result, and get rid of distractions. As Hewlett Packard Enterprise CEO Meg Whitman says on HPE Matter, “Success today is defined by the ability to turn ideas into value faster than your competition.”

Data-driven technologies, such as real-time analytics, are crucial to innovation. And here’s one last critical point: All of this must also be done quickly because the next disruption is just a digital blink away.

Learn more about using disruption to your advantage in our Q&A with HPE experts Jim “Coop” Cooper, Chief Technologist, Mobility & Workplace Global Practice; and Sudesh Shah, Chief Technologist and Strategist, Asia.