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In today's volatile business landscape, adaptability and creativity are more crucial than ever. It is no longer possible-or even desirable-to learn one set of job skills and to work your way up the ladder. At the same time, entrepreneurs with great ideas for new products or technologies that could change the world often struggle to capture the attention of venture capital firms and incubators; finding the funding necessary to launch a start-up can feel impossible. The business leaders of our future must anticipate change to create their own opportunities for personal satisfaction and professional success. In Disrupt You!, Jay Samit, a digital media expert who has launched, grown, and sold start-ups and Fortune 500 companies alike, describes the unique method he has used to invent new markets and expand established businesses.
Samit has been at the helm of businesses in the ecommerce, digital video, social media, mobile communications, and software industries, helping to navigate them through turbulent economic times and guide them through necessary transformation so that they stay ahead of the curve. In Disrupt You!, he reveals how specific strategies that help companies flourish can be applied at an individual level to help anyone can achieve success and lasting prosperity-without needing to raise funds from outside investors.
Incorporating stories from his own experience and anecdotes from other innovators and disruptive businesses-including Richard Branson, Steve Jobs, Elon Musk, YouTube, Circ du Soleil, Odor Eaters, Iams, Silly Putty, and many more-Samit shows how personal transformation can reap entrepreneurial and professional rewards. Disrupt You! offers clear and empowering advice for anyone looking to break through; for anyone with a big idea but with no idea how to apply it; and for anyone worried about being made irrelevant in an era of technological transformation. This engaging, perspective-shifting book demystifies the mechanics of disruption for individuals and businesses alike.
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About the Author
JAY SAMIT has been described by Wired magazine as "having the coolest job in the industry." He is a leading technology innovator who has raised hundreds of millions of dollars for startups; sold companies to Fortune 500 firms; taken companies public; and partnered with some of the world's biggest brands, including Coca Cola, McDonald's, General Motors, United Airlines, Microsoft, Apple, Verizon, and Facebook. Samit is CEO of SeaChange International, a leading global multi-screen video software company. A technology innovator and entrepreneur, he was a senior advisor to LinkedIn and was appointed to the White House initiative for education and technology by President Bill Clinton. An adjunct professor of entrepreneurship at USC's Viterbi School of Engineering, Samit is the host of the Wall Street Journal Startup of the Year series.
Read an Excerpt
By Jay Samit
Flatiron BooksCopyright © 2015 Jay Samit
All rights reserved.
In Defense of Disruption
The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.
— Albert Einstein
In first-century Rome, an innovative glassmaker created vitrum flexile, flexible glass. Proud of his invention, he requested an audience with Emperor Tiberius. The emperor threw the drinking vessel down on the ground, but, much to his surprise, it did not shatter. At the time, all drinking vessels were made of gold and silver, which tainted wine with a metallic taste. Considering the glassmaker's creation, Tiberius realized it would completely disrupt the Roman economy. If goblets were no longer made of gold and silver, the value of the precious metals would diminish immeasurably. Tiberius asked the glassmaker if anyone else knew the secret formula. When the inventor took a solemn oath that he alone knew how to create vitrum flexile, the emperor had the man beheaded.
Today it is not so easy to thwart disruption.
The business headlines will tell you that the world has become a scary place. Advances in 3-D printing that create just-in-time inventory threaten the jobs of 320 million manufacturing workers around the globe. Self-driving cars, trucks, and drones will displace tens of millions more workers. Renewable energy, such as solar photovoltaic cells, which have decreased in cost by more than 85 percent since the year 2000, will shift the geopolitical future of nations whose economies are supported by fossil fuels. According to a recent McKinsey Global Institute study, the automation of knowledge work will have a $5 trillion to $7 trillion impact on white-collar jobs. Ecommerce and productivity gains in delivering retail goods are expected to further reduce the number of retail stores by as much as 15 percent. What is the real estate value of a mall, factory, or office building when its purpose is made obsolete? America's workforce is now dealing with the realization that even though the recession is over, it has been a jobless recovery. This era of endless innovation has resulted in large multinational corporations shedding more than 2.9 million domestic jobs since the recession, and the pace of change is only accelerating. It seems that whenever reporters, news anchors, pundits, and economists discuss this rapid pace of change, they throw around the word disruption — often employing the language of warfare — destruction and disorder. As generations-old companies and once valued brands and businesses are displaced by nimble, efficient new startups, we're led to believe that disruptive new technologies have given the dogs in our dog-eat-dog world a powerful and violent strain of rabies.
The disruption characterizing our current business landscape goes beyond innovation — and there is a difference between the two. Take the mighty sword, for example. Men have been fighting with swords for over five thousand years. Early bronze swords were lethally sharp, but, given the weak tensile strength of bronze, they had to be short in length. The innovation of steel and other alloys allowed the sword to grow in length, broadness, and societal importance. Skilled swordsmen became the defenders of kings and kingdoms, and the sword became the symbol of liberty and strength. Innovation therefore consisted of how each new culture and generation improved upon swords, changing how they were forged and how they were wielded in combat. But one of the great Hollywood adventure movies, Raiders of the Lost Ark, provides the perfect illustration of how disruption works. When Indiana Jones is challenged to a duel by an Arab swordsman flamboyantly waving his massive scimitar, Indy nonchalantly reaches into his holster, pulls out a revolver, and shoots the swordsman dead. With the presence of the pistol, the sword was made obsolete. Disruption is to existing businesses and business models what Indy's Smith & Wesson was to the sword: it instantly changes the way the world functions and the course of history.
Disruption is almost always led by a technological change. But disruption's impact extends far beyond the technology industries. Eli Whitney's invention of the cotton gin in 1793 did more than just make cotton a profitable crop; it led to a quintupled growth in the number of slaves in the South and sparked the industrial revolution in the North. It catapulted a young nation's economy and hastened the onslaught of the Civil War. Every American's life was affected. History was altered by this one technological breakthrough. A technology or product is disruptive when it creates an entirely new market, consumer base, or user and destroys or displaces the market for the technology it replaced. Email disrupted postal mail, for example, and Wikipedia disrupted the traditional multivolume bound encyclopedia.
Early in my career, I saw firsthand the difference between something that is truly disruptive and something that is merely innovative. When I launched my first company, Jasmine Productions, we were a small twelve-person operation doing small-time graphic and special-effects production work for hire. I was eager for an entry into mainstream Hollywood. At the same time, the Japanese electronics manufacturer Pioneer was also looking for an inroad. Pioneer had acquired control of a new home video format — the laser videodisc — from Philips and MCA (Universal Studios). Branded LaserDisc, the twelve-inch vinyl-record-size platters had audio and video quality vastly superior to that of VHS and Betamax videocassettes, which were then popular with consumers for home video entertainment. The laserdisc player was marketed as a "record player that produces beautiful sound and pictures," which could be enjoyed on your television. Laserdiscs were read by lasers and had no moving parts, as fragile videocassettes did, so the picture and sound quality would not deteriorate over time, nor would the discs jam or tear the way videotape did. Additionally, whereas videotape had to spool linearly through the entire tape to get to a different point, the lasers could instantly go from any point in the video to any other point, thus creating the possibility of "interactive video." Stories could have different outcomes depending on which choice a viewer made. Unlike the linear narratives of movies and television, the laserdisc could combine the interactivity of video games with the production values of film. I was convinced this would revolutionize all forms of entertainment, and I wanted to lead this revolution.
Pioneer Electronics needed developers to create consumer titles for this emerging field. The technology was so superior to videotape that I couldn't see how it could fail. I joined up with other filmmakers to work on Time Frame, the first interactive laserdisc title produced for the home, which Pioneer was going to distribute under its newly minted DiscoVision label. I felt like a rock star signed to a music label. We had dozens of ideas for interactive laserdiscs for kids and adults to enjoy. We planned to produce hit after hit. IBM and the Japanese electronics manufacturers had spent hundreds of millions of dollars inventing this new medium, and I was lucky enough to get in on the ground floor. I was going to be the king of the laserdisc and forever change home entertainment. I was sure the laserdisc would replace videocassettes the way television replaced radio after World War II.
Unfortunately, after the first Christmas season, it became clear that because home consumers couldn't use laserdiscs to record their favorite television shows, the way they had been doing with videocassettes, consumers saw the value of laserdiscs as being very limited. Our first major sales season was a bust. We knew we were going nowhere fast. The laserdisc's only redeeming legacy was that its core technologies would become the basis for the more successful optical disc formats that followed over the coming decades: the CD and the DVD. As quickly as I had imagined how big the interactive video home market and my personal fortune were going to be, the sales never materialized, and Pioneer abandoned home entertainment. How could we have been so wrong?
I learned then that there is a difference between failing and failure. Failing is trying something that you learn doesn't work. Failure is throwing in the towel and giving up. I refused to be a failure. As Winston Churchill once said, "Success is stumbling from failure to failure with no loss of enthusiasm."
* I learned then that there is a difference between failing and failure. Failing is trying something that you learn doesn't work.
I realized that the laserdisc hadn't transformed home entertainment because the only new thing it offered customers was an improved experience. The laserdisc sought to compete on the playing field already established by the VCR. The VCR disrupted television viewing for an entire generation; laserdiscs were just an incremental improvement in visual quality. Laserdiscs were sold in the same sales channels, by the same salespeople, to the same consumer as videocassettes.
For a product or a process to be truly disruptive, it must create a new market and transform an existing business model. This realization launched my thirty-year study of disruption. True disruption alters a market or system forever. The DVR, for example, didn't just change how we watch television; it upended the entire advertising-supported television business model of the previous fifty years.
* True disruption alters a market or system forever.
But just as early man progressed from the Stone Age to the Bronze Age to the Iron Age, each disruptive technology will itself eventually be disrupted. One hundred fifty years ago, the invention of the gramophone was disruptive. Because of the gramophone, mankind's love of music became a mass media industry (a market was created), and for the first time in history, artists and musicians were able to amass great wealth from their craft (a new business model was launched). The gramophone meant that experiencing the musical talent of Enrico Caruso, the greatest tenor of his generation, was no longer restricted to just a few affluent patrons of opera. Common citizens developed a passion for music and could suddenly afford a library of popular recordings. Records were so popular with the masses that blues singer Bessie Smith became a millionaire in the 1920s. Eventually, through incremental improvements in recording and playback, the compact disc was born. The CD became the crowning technological innovation of the music industry, but it did not force any significant changes to the multi-billion-dollar business model. Artists still signed with labels, labels still produced and released albums, and consumers purchased the entire thing on a CD, just as they had once purchased a record.
The $40 billion music industry was born of one invention — the gramophone — and comfortably relied on one business model for more than a century of profits. Then disruption came from another technology: the Internet. Disruptive digital services such as Napster, iTunes, and Spotify killed the mighty album, creating a market for single downloads; eviscerated the music labels' revenue model; and shot the industry dead. One can argue about the inherent value of each incremental innovation in business, but the impact of disruption is undeniable and unmistakable. In the wake of digital disruption, EMI — the hundred-year-old company that invented electric recording, the company that signed Caruso, the Beatles, and thousands of other artists — simply ceased to exist.
In the twenty-first century, billion-dollar industries can be disrupted and waylaid virtually overnight — no sector of commerce or government is immune to the threat.
For the record companies and recording artists disrupted by digital downloads and MP3s, for the postal workers and direct-mail businesses disrupted by email, for the newspaper and publishing executives disrupted by new advertising models like Craigslist and delivery platforms like ebooks and desktop self-publishing, disruption brings with it a sense of doom and gloom. We think of these businesses contracting and jobs being lost. But the truth is, wherever a business has been disrupted, volume is released. Massive opportunity is created and major shifts in economic wealth follow. Disruption creates opportunity. The railroads created railroad barons. The automobile created oil tycoons. Silicon Valley has created thousands of dot-com millionaires. Most people are surprised to learn that the richest man in Los Angeles is not a Hollywood celebrity, but a doctor who made over $7 billion by developing disruptive pharmaceuticals. Identify the right trend or create the right startup, and billions of dollars could be yours. Anyone has the power to disrupt, and everyone has the opportunity to benefit from disruption. There has never been a time in history when upward mobility has been so equitably disbursed.
* There has never been a time in history when upward mobility has been so equitably disbursed.
Yes, the pace of disruption has increased exponentially, thanks to a confluence of disruptive technologies that change how we work, communicate, travel, learn, and age. A century ago, having a few thousand customers for your product made you nationally known to America's seventy-six million citizens. Now, over six billion potential consumers are just one click away from becoming customers. Cloud computing, wearable technology, 3-D printing, and the Internet of Things may just be abstract concepts to you today, but the impact they will have on your career and fortune is inevitable. There are fortunes to be made by identifying and exploiting the smallest aspects of these seismic shifts in technology and business organizations. Executives at Gulf Oil didn't have to know how to design or manufacture automobiles in order to recognize the growing demand for gasoline in 1913; they just had to satisfy the consumer's needs, so they created the first drive-in gas station. Today the world spends $2.5 trillion consuming petroleum, and oil companies account for five of the world's top ten revenue-producing companies. To financially benefit from technology changes, you don't need an engineering degree or an M.B.A. To survive and thrive in the era of endless innovation, you merely need to think like a disruptor.
FORGET THEORIES OF DISRUPTION
Since Clayton Christensen coined the phrase "disruptive innovation" in his 1997 book The Innovator's Dilemma, scores of academics and management consultants have studied a range of industries and companies in order to identify and classify various forms of disruption. Christensen asserts that there is a firm distinction between sustaining technologies and disruptive ones — think of the improving gas mileage of cars over the past thirty years as a series of sustaining technologies. But an electric car that doesn't require gasoline: that would be disruptive technology. At first, disruptive technologies pose no threat to the entrenched technology because of poor performance. In the case of the first generation of electric cars, the mileage may be great, but the battery can't get the vehicle from Los Angeles to Las Vegas. If Tesla, on the other hand, were to launch a $30,000 car with a thousand-mile range, then it would be game over for the combustion engine.
Following in Christensen's footsteps, an entire cottage industry of innovation experts have developed their own jargon for identifying and labeling disruptions. There are now more theories of disruption out there than we can count. Some focus on the most profitable high end of an existing market, while others examine how disruption works by encroaching on the low end. One theory holds that disruption starts at the fringe of existing markets by addressing unmet needs of new customers. Yet another focuses on price as its market force. My favorite piece of modern management jargon is the technology S curve, which shows on a graph that new inventions grow slowly in the market, then have an explosive growth period, before gradually tapering off as they mature over time. In other words, things start off small, get big, and then die off. My personal belief is that the technology S curve could be used to graph anything from the life cycle of the hard-drive industry to the life cycle of an oak tree. Every living thing grows and eventually dies. Everything. Knowing the S curve of the dinosaurs doesn't help us understand why they disappeared or how mankind can avoid extinction. Neither can plotting the S curve of your product or company better prepare you for the inevitable. The management science of disruption has now reached its own maturation stage, as evidenced by the fact that the University of Southern California, where I am an adjunct professor, even offers an undergraduate degree in disruption! But the problem with all the theoretical approaches is that they are like the blood-spatter science used by Showtime's Dexter Morgan: great for revealing what killed the victim, but worthless for predicting who will be slaughtered next.
Excerpted from Disrupt You! by Jay Samit. Copyright © 2015 Jay Samit. Excerpted by permission of Flatiron Books.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
In Defense of Disruption
Become a Disruptor
The Disruptor's Map
Build a Brand of One
Disruptors at Work and the Value of Intrapreneurship
In Search of the Zombie Idea
Pivoting Your Energies
Unlocking the Value Chain
Research and Development:
Unlocking the Value of Waste
Design: Disruption Through Aesthetics
Production: Reuse, Repurpose, Re- create
Marketing and Sales: Finding the Problem to Fix Your Solution
Distribution: Unlocking Unattained Value and the Challenge of Unlimited Shelf Space
Capital Revisited: Other People's Money
Disruption in the Era of the Crowd
Disrupt the World
The Self- Disruptor's Manifesto