How Disruptive Innovation Drives Change

Almost everything people wrote about Disruption was wrong, yes, including the late Clayton Christensen. Uber didn't disrupt Taxis by being cheaper, or having a lower cost base, it was a better user experience. Airbnb didn't disrupt Hotels by being cheaper, it opened an adjacent market. The iPhone wasn't a cheaper Laptop or Phone, it was a radically different thing. Disruption was asking "What if the rules were different?" Disruption is merely challenging assumptions that hold us back. Disruption isn't about technology at all. Disruption is about imagination, courage, audacity, empathy. Now, quite often Disruption IS about technology. Netflix thrived because streaming meant media could be on demand, it meant 160 countries could come on tap, with no new offices or staff Shein thrives because rather than sending 40,000 SKUs a week to stores, it can take pictures of 40,000 and only make in volume what people like. Often it's nothing to do with tech, it's thinking. Nespresso was an amazing disruption because it challenged the notion people would spend $50 a month on coffee at home. Dyson challenged the idea people cared enough to spend $500 on a vacuum. Nest challenged the idea that Thermostats could ever be bought by end users. But often it's more complex. Tesla can thrive because when you change how cars are made, you can change how they are designed, you can change how they are bought and distributed you can change how they are serviced, you can change how they are financed, and marketed. It turns out progress is about the parameters of possibility, about regulation, consumer behavior, business models, but most of all about the assumptions that hold you back. Disruption isn't doing everything differently. It's the confidence to ensure your progress is shaped by the parameters that others back and constrains drive you forward to a better place. And technology is interesting, because it allows old rules to be broken. It can reconcile long assumed trade offs. It makes building something new, easier than changing something old. It makes imagination the limit more than engineering. It makes agility sometimes more important than experience. It makes ambition more important than assets.

Duke Rohlen built and sold 5 companies for $1.7B.  Here's how he's disrupting medical industry with his new model👇 Rohlen started a restaurant business at 22, scaling it to $20M+ in revenue. Post that, he went on an entrepreneurial journey in building medical devices. He built and sold 5 companies in the role of either Co-founder, CEO, MD, or Director. Today, he runs Ajax Health—a private equity platform backed by KKR. His playbook? To turn large, slow companies into lean, fast-moving venture portfolios. Take Cordis, for example → It was once stuck at $700M with slow growth and thin profit, but is now doing over $1B in annual sales after the acquisition of Ajax. Here’s how he is doing it👇 1./ Learnings from different industries Rohlen started in the restaurant industry, scaling and selling a successful chain before ever touching healthcare. But that outsider experience became his edge. He brought with him: • Operational rigor • Relentless efficiency • Customer-first thinking At Lumen, Fox Hollow, and CV Ingenuity (his earlier companies): he applied these same principles. As per him: “We needed a better way to balance capital efficiency and technological ambition.” 2./ New Venture and R&D Models After the acquisition of Cordis, he created “Cordis-X,” a venture arm under Ajax. Since most medtech innovation is either too risky or too slow, he fixes that by restructuring the innovation pipeline. He breaks development into three categories: • Transformative → Bold, high-risk tech • Synergistic → Enhancements to existing products • Incremental → Small but essential updates So, instead of betting everything on a moonshot, he blends all three. This approach blends bold bets with steady improvements, driving faster, lower-risk innovation without wasting capital. 3./ Focus on Capital Efficiency Rohlen’s model redesigns medtech innovation around two principles: • Strategic Budgeting • Hiring independent talent As per him: spending $100M on the wrong bet is career-ending. He focuses budgets on key inflection points, Ajax compresses timelines from 8 years to just 3.5, without cutting quality. There's also a smart talent trick in play. Instead of a traditional org chart, Rohlen uses a model where: - Cordis-X runs like an App Store.  - Engineers and entrepreneurs get scoped projects. - They have fixed budgets and upside in the outcome. This model removes the biggest blockers of capital inefficiency and bureaucracy. Ajax’s model didn’t stop at Cordis. They’ve partnered with multiple multibillion-dollar corporations, building custom growth engines inside each one. Why this works: ↳ Faster, de-risked innovation ↳ Legacy firms avoid disruption ↳ Entrepreneurial talent gets autonomy + support A story with tons of insights for both acquirers and founders.

A Disruptive Strategy is about making solutions more affordable…EVEN if they're not as sophisticated. The goal of a disruptive strategy is to get the job done more cheaply, which is a strategy that is appealing to both over-served customers and non-consumers (people who don't have the means to afford existing solutions). Here are 4 examples that demonstrate the dynamics of a disruptive strategy: 1. Google Docs: - Less feature-rich than Microsoft Office - But free and accessible anywhere - Gained mass adoption from overserved users and non-consumers 2. TurboTax: - Simplified tax filing vs traditional services - Lower cost than professional preparers - Captured customers who found CPAs too expensive, and wanted to do it themselves 3. Dollar Shave Club: - Basic razors compared to Gillette - Significantly lower monthly cost - Attracted customers tired of premium pricing 4. Coursera: - Less comprehensive than traditional universities - Fraction of the cost of formal education - Opened education to previously excluded audiences If you want to pursue a disruptive strategy, the pattern is clear: - Target overserved customers - Offer a "good enough" solution - Offer dramatically lower prices - Expand access to non-consumers A truly disruptive innovation sets the groundwork for the eventual pursuit of a Dominant Strategy, where the process of disruption is concluded by getting the job done better AND more cheaply over time. 1. Start with a basic, affordable offerings 2. Gradually improve the offering over time to get the job done BETTER and more cheaply 3. Eventually compete with premium solutions and underserved customers 4. End up displacing market leaders Knowing the process of disruption opens the door to long-term winning strategies.

Disruptive innovation - Biopharma style. In 1997, Clayton Christensen published his groundbreaking book describing how certain disruptive technologies reshape economies on a global scale. These technologies usually start as not so effective niche products, but with gradual improvements, overtake and destroy existing competitors that cling to older technologies that cannot adapt. Note in point here where GLP-1 drugs were made decades ago for diabetes but not potent nor convenient enough for adoption as a weight loss mechanism. With the rise of the new GLP-1 drugs from Novo and Lilly, incremental improvement led to a potent and convenient (chronic) way to treat diabetes, and morphed into an adjacent area of obesity. GLP-1 drugs continue to expand indications to heart disease, liver disease, and potentially neurological disease. In the process, the fashion industry, behavorial weight loss industry, and the packaged food industry were also highly impacted around the sequelae of GLP-1 mediated weight loss effects. In a different way, the GLP-1 effect is akin to the iPhone disrupting the camera industry, the map industry, news industry, entertainment etc. The latest update now is WW, formerly known as Weight Watchers, has succumbed to GLP-1 juggernaut as the behavorial modification company files for bankruptcy. Their attempts to turn around the company, to even offer online GLP-1, eventually failed. Plans are to emerge from bankruptcy and transform itself into a wellness based company. Founded in 1963, WW had a major run in weight control for nearly 60 years, but could not compete with pharmacological intervention. Read the fascinating history of WW here in the Guardian. https://lnkd.in/e6gR6Hxe