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Disruptive vs Sustaining Innovation

Steve Morris

Oregon Technology Business Center

Slides: otbc.org/tools

2

What is a disruptive innovation?

3

4

Disruptive Innovation

Clayton Christensen, The

Innovators Dilemma

Time

5

1965 Ford Mustang

1965 Toyota Corolla

Disruptive Innovation

6

Disruption & Startups

• Research from Thomas Thurston, formerly with Intel Capital: Startups that disrupt are much more likely to be successful

Thomas Thurston,

Growth Science International

7

Disruption & Startups

Sustaining

Disruptive

Startup Big

Company

8

Types of Disruptive Innovation

• Cheaper

• Uglier

• Smaller

• Less capable

• ... but good enough for the target customers

Low Cost More

Accessible

New Market

• Simply didn’t exist before

• Easier to access

• Easier to use

9

What is a business model?

10

Business Model Canvas

Key

Partners

Key

Activities

Customer

Relationships

Customer

Segments

Key

Resources Channels

Cost Structure Revenue Streams

Value

Proposition

Problem

Solution

Value

12

What is a startup?

13

14

A startup is a

temporary organization

in search of a

scalable, repeatable, profitable business model.

15

The Scientific Method

Theory

Hypothesis

Test

16

Business Model Canvas

Key

Partners

Key

Activities

Customer

Relationships

Customer

Segments

Key

Resources Channels

Cost Structure Revenue Streams

Value

Proposition

Problem

Solution

Value

17

To test your hypotheses

Get out of the Building

18

Research Challenge

What Customers Say

What Customers Do =

19

The Startup Solution

1. Document what you believe

2. Develop testable hypotheses

3. Test the Plan - cheaply/quickly

- First: what customers say

- Then: what customers do

20

Business Model Canvas

Key

Partners

Key

Activities

Customer

Relationships

Customer

Segments

Key

Resources Channels

Cost Structure Revenue Streams

Value

Proposition

Problem

Solution

Value

Problem/Solution Testing

Document the Problem

Create Hypotheses

Identify 10 Customers

Test the Problem

Hypotheses

Customer Interviews

Build and test Low Fidelity

MVP

Customer Interviews

Build MVP and Validate Qualitatively

Customer Interviews

Validate Quantitatively

Customer Metrics

22

Business Model Canvas

Key

Partners

Key

Activities

Customer

Relationships

Customer

Segments

Key

Resources Channels

Cost Structure Revenue Streams

Value

Proposition

Problem

Solution

Value

24

Summary

1. Disruptive is different

2. Goal: find a viable model

3. Document - test - iterate

Quickly & cheaply

25

Disruptive vs Sustaining Innovation

Slides: otbc.org/tools

26

Questions?

Slides: otbc.org/tools

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