Examples of Disruptive Startups and How They Did It

Most of the industries are now being disrupted by technology. Uber, Lyft, Didi and Ola are disrupting the traditional transportation industry. Airbnb is disrupting the hotel industry. Tesla is disrupting the car industry. Amazon is disrupting retail. TransferWise is disrupting banking. Facebook disrupted advertising business. Netflix and others are disrupting TV. And the list goes on and on, and there are still plenty of industries yet to be disrupted. But all these companies have something in common. They didn't get where they are today merely by just creating a better product. If they were simply competing on product quality and features, they wouldn't have had the same impact. It's actually possible to point out the exact areas of the business model that these companies hacked to beat their competition. And this is usually not the value proposition, or at least, not the value proposition alone. Uber and others clearly offer a better service than taxis, but the biggest change was the sales channel, because you order from a mobile app. Also, the drivers, who would be key resources for regular taxi companies, became key partners for Uber because they're not employees. Finally, the revenue model and money collection is different, and there are more customer segments. When Amazon disrupted retail, it was clearly a channel hack because they decided to do sales online only and delivery channels switched from physical shops to home delivery. They compete with physical stores without having any physical store of their own. So it never only comes down to a better product. The best disruptions happen when companies innovate in other areas than simply the product quality or features. Meaning not necessarily in the value proposition block. Inside the business model canvas blocks, we can find 10 clear ways, or hacks, which can help you to differentiate your business from others. To make it easier, we will split them in four categories. Offer-driven, customer-driven, resource-driven, and finance-driven. In the offer-driven disruptions, we will investigate the most common way to innovate, which is the offering. Meaning the product quality, features and system. But we will also explain how startups can innovate on design. This is extremely important because if you take two companies which have a product that achieves exactly the same result, one company can easily beat the other if its product has a better design. But don't worry, we'll get into each one of these parts separately so you can better understand all of them. In customer driven-innovations, we will see how startups can hack the customer segment block by targeting a unique group of customers. Then also the customer relationships block by setting up an innovative relationship with their customers. And then finally, the channels block by choosing completely different sales and delivery channels than the standards of the industry. Then for the resource-driven innovations, we will see how companies can innovate on their internal processes, meaning hacking key resources and key activity blocks and on their network, which is the key partnerships block. Finally, we will take a look at the finance-driven innovations. This is all about how companies can achieve huge success by completely changing their revenue models and hacking revenue streams and cost structure blocks. This is something so big and critical that we have a dedicated part for it. All right, everyone. Before we jump into every single business model hack one by one, there's one last thing we need to tell you. This is about how you can actually use everything that you're gonna hear and which techniques will help you to apply it. To brainstorm about it, it's good to do it in a team. We'll explain you all the techniques in detail at the end of this course. But for now, you should use the easiest one, called "What If." Basically, you can look at each block in the business model canvas and ask yourself, "What if we changed it completely?" For example, imagine a business that produces and sells socks. Yeah, socks. It's boring, but let's do it. Socks are sold for a fixed price in pairs and that is the standard of the industry. And they're usually sold through retailers in physical shops. What if you could change that and make people pay a monthly subscription, let's say, and in return, they would receive several new pairs of socks each month directly in their post mailbox? Sounds awkward, doesn't it? A bit unnatural way to purchase socks, right? But I bet all the boys here will love it. Well, as a matter of fact, we gave this example because there is a startup called Sock Fancy that did exactly that. You pay a monthly subscription and new socks are delivered to you anywhere in the world. So guys, go for it! Actually, there were even experiments with a one-time payment of $1,000 for lifetime regular socks delivery. So yeah, that kind of stuff exists. So ask yourself "What if" questions and unleash your creativity. Let's go.