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To Disrupt or Not to Disrupt?
Article

To Disrupt or Not to Disrupt?

Disruption isn’t always the right strategy for startups. It’s a choice.

Joshua Gans
MIT Sloan Management Review, 2020
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
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Recommendation

Market disrupters enter a market with a new or cheaper product hoping to capitalize on a weakness found in a traditional business – perhaps customers looking for cheaper or more convenient alternatives. Disruption is a choice, however, and opting to work with a legacy company can offer substantial benefits. Entrepreneurs should consider the strategies outlined by Joshua Gans in MIT Sloan Management Review. Gans offers a logical approach for entrepreneurs to weighing alternative, and often more successful, strategies to the path of disruption.

Summary

Market disrupters aim to capitalize on vulnerabilities in existing businesses.

Disruptive companies introduce new products into the market niches where traditional businesses fail to offer what their current and potential customers need. However, entrepreneurs should consider alternative approaches to directly competing with existing companies.

In the early days of the internet, Amazon offered consumers alternative ways to shop for books, decisively – and successfully – disrupting existing book stores. A similar strategy flopped for Webvan whose efforts to disrupt grocery stores failed to reach the necessary scale. In contrast...

About the Author

Joshua Gans is a professor of strategic management and holds the Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship at the Rotman School of Management at the University of Toronto. 

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