Product Management Dictionary

The Product Management Dictionary: disruptive innovation

Discover the meaning of disruptive innovation in the world of product management with our comprehensive dictionary.

In today's rapidly changing business landscape, innovation is essential for companies to stay competitive and relevant. Among the many types of innovation, one that has gained significant attention in recent years is disruptive innovation. This article aims to provide a comprehensive understanding of disruptive innovation and its applications in product management.

Understanding Disruptive Innovation

Disruptive innovation is a term coined by Clayton Christensen, a renowned business theorist. It refers to a type of innovation that creates a new market by creating a product or service that is simpler, more affordable, and more accessible than existing products. Disruptive innovations often start small, with modest offerings, but gradually improve and grow to eat away market share from established players.

Defining Disruptive Innovation

Disruptive innovation is not the same as sustaining innovation, which refers to continuous improvements made to existing products and services to enhance their market appeal. Disruptive innovations often appeal to a different set of customers and enable new consumption patterns, leading to the creation of new markets.

The History of Disruptive Innovation

The concept of disruptive innovation was first introduced by Christensen in his book "The Innovator's Dilemma" in 1997. He argued that established companies often fail to adopt disruptive innovations because they are focused on protecting their existing market and products. This creates opportunities for upstart companies to disrupt the market and create new customer value.

Key Characteristics of Disruptive Innovations

There are several key characteristics of disruptive innovations, including:

  • They are simpler and more convenient than existing products
  • They are cheaper and more affordable than other products in the market
  • They appeal to customers who were previously underserved by existing products
  • They enable new consumption patterns and create new markets

One example of a disruptive innovation is the advent of ride-sharing services like Uber and Lyft. These services disrupted the traditional taxi industry by offering a simpler and more convenient way to hail a ride. They were also cheaper than traditional taxis, making them more accessible to a wider range of customers. Additionally, ride-sharing services enabled new consumption patterns, such as the ability to easily split fares with friends or to schedule rides in advance.

Another example of a disruptive innovation is the rise of streaming services like Netflix and Hulu. These services disrupted the traditional television industry by offering a cheaper and more convenient way to watch TV shows and movies. They appealed to customers who were previously underserved by cable TV providers, such as those who lived in areas without access to cable or who couldn't afford the high cost of cable subscriptions. Streaming services also enabled new consumption patterns, such as binge-watching entire seasons of shows in one sitting.

Disruptive innovations can have a significant impact on industries and the economy as a whole. They can create new jobs and opportunities, but they can also lead to the decline of established players who fail to adapt to changing market conditions. Understanding disruptive innovation is therefore crucial for businesses and entrepreneurs who want to stay ahead of the curve and succeed in today's rapidly changing business landscape.

The Role of Product Managers in Disruptive Innovation

Product managers play a critical role in identifying and developing disruptive innovations. Their work is essential in keeping companies ahead of the curve and leading the way in their respective industries. Here are some key aspects of their role:

Identifying Opportunities for Disruption

Product managers must remain vigilant in identifying new customer trends, market shifts, and emerging technologies that could create opportunities for disruption. They must also be willing to challenge existing assumptions and look beyond current markets and customers.

For example, a product manager at a transportation company may notice a trend of people using ride-sharing services instead of traditional taxis. They may see an opportunity to disrupt the market by creating a similar service that is more affordable and convenient for customers.

Developing a Disruptive Product Strategy

Once an opportunity for disruption has been identified, product managers must develop a strategy for seizing that opportunity. This process involves creating a roadmap for product development, exploring new business models, and building a team with the necessary skills and expertise to execute the plan.

Product managers must also consider how the new product will fit into the company's overall strategy. They must ensure that the product aligns with the company's values and mission, and that it has a clear path to profitability.

For example, a product manager at a software company may identify an opportunity to disrupt the market by developing a new software product that uses artificial intelligence to automate tedious tasks. They would need to create a development plan, research the market, and build a team with expertise in AI and software development.

Overcoming Challenges in Disruptive Innovation

Disruptive innovation can be challenging for established companies to pursue. They must be willing to take risks and embrace uncertainty, which can be difficult for organizations that have historically prioritized stability and predictability. Product managers must also navigate potential resistance from entrenched business units and executives.

Product managers must be skilled communicators and negotiators to overcome these challenges. They must be able to articulate the benefits of the new product and convince stakeholders of its potential. They must also be willing to listen to feedback and adjust the product strategy as needed.

For example, a product manager at a retail company may face resistance from executives who are hesitant to invest in a new online sales platform. They would need to present a compelling case for the platform's potential profitability and demonstrate how it aligns with the company's overall strategy.

In conclusion, product managers play a crucial role in driving disruptive innovation. They must remain vigilant in identifying new opportunities, develop a sound strategy for seizing those opportunities, and navigate potential challenges along the way. By doing so, they can help their companies stay ahead of the curve and lead the way in their respective industries.

Examples of Disruptive Innovations in Various Industries

Disruptive innovations are the ones that change the game, they transform the way we live, work, and interact with the world around us. They create new markets, challenge established players, and often bring significant benefits to consumers. Here are some examples of disruptive innovations in different industries:

Technology and Software Disruptions

The technology and software industries have been at the forefront of disruptive innovation for many years. One of the most significant disruptions in recent times has been the rise of mobile devices. Smartphones and tablets have transformed the way we access information and communicate with each other. They have also created new markets for app developers and mobile service providers.

Another disruptive innovation in the technology industry has been cloud computing. Cloud services have made it possible to store and access data from anywhere in the world. This has enabled businesses to reduce their IT costs and improve their operational efficiency.

Social media platforms like Facebook, Twitter, and Instagram have also been disruptive innovations. They have changed the way we connect with each other, share information, and consume media. They have also created new opportunities for businesses to reach out to their customers and build their brands.

Healthcare and Biotechnology Disruptions

Advancements in healthcare and biotechnology have led to significant disruptive innovations in recent years. Telemedicine, for example, has made it possible for patients to consult with doctors remotely. Wearable technology, such as fitness trackers and smartwatches, has enabled people to monitor their health and fitness levels more closely.

Gene editing and personalized medicine are other disruptive innovations in the healthcare industry. Gene editing has the potential to cure genetic diseases by editing the DNA of patients. Personalized medicine, on the other hand, uses a patient's genetic information to develop customized treatments.

Transportation and Mobility Disruptions

The transportation industry has seen significant disruption in recent years, thanks to companies like Uber and Lyft. These ride-hailing services have transformed the traditional taxi industry by providing a more convenient and affordable alternative. They have also created new opportunities for drivers to earn a living.

Electric vehicles are another disruptive innovation in the transportation industry. They are more environmentally friendly and cost less to operate than traditional gas-powered vehicles. Autonomous driving technology is also a disruptive innovation that has the potential to revolutionize how we move around our cities. Self-driving cars could reduce traffic congestion, improve safety, and make transportation more accessible to everyone.

These are just a few examples of disruptive innovations in various industries. As technology continues to evolve, we can expect to see more disruptive innovations that will transform the way we live and work.

The Impact of Disruptive Innovation on Market Dynamics

How Disruptive Innovations Change Market Landscapes

Disruptive innovations have been transforming markets across industries, creating new opportunities and challenges for businesses. They can fundamentally change market dynamics by creating new market segments, disrupting existing ones, and undermining the competitive advantages of established companies. For instance, the rise of e-commerce disrupted the traditional retail industry, leading to the closure of many brick-and-mortar stores and the emergence of new online marketplaces.

Disruptive innovations can also lead to the creation of new business models and value chains that completely upend established ways of doing business. For example, the sharing economy, which was made possible by the widespread adoption of smartphones and mobile apps, disrupted traditional industries such as transportation and hospitality.

The Role of Incumbents and New Entrants

Incumbent companies face the challenge of adapting to disruptive innovations if they want to remain competitive. They must be willing to cannibalize their existing product lines, experiment with new business models, and be willing to take risks in pursuing disruptive innovations. However, many established companies struggle to adapt to disruptive innovations due to their rigid organizational structures, risk-averse cultures, and short-term focus on quarterly earnings.

On the other hand, new entrants can seize upon opportunities created by disruptive innovations to gain a foothold in new markets. Startups and entrepreneurs are often more agile and willing to take risks, allowing them to quickly develop and launch new products and services that address unmet needs in the market. For example, Tesla disrupted the automotive industry by introducing electric cars that appealed to environmentally conscious consumers.

Adapting to Disruption: Strategies for Established Companies

Established companies can take several steps to adapt to disruptive innovations. They can invest in startup incubators, partnerships with disruptors, and dedicated innovation teams to stay abreast of emerging technologies and trends. For example, Google's parent company, Alphabet, has established a number of venture capital funds and incubators to invest in startups working on disruptive technologies such as artificial intelligence and blockchain.

Companies can also create separate business units to pursue disruptive innovations or acquire smaller companies that have emerged as disruptors in their markets. For instance, Amazon acquired Whole Foods to expand its presence in the grocery industry and gain access to its established supply chain and distribution network.

Ultimately, companies that are able to successfully adapt to disruptive innovations can gain a competitive advantage and position themselves for long-term success in rapidly changing markets.


Disruptive innovation has the potential to fundamentally transform entire industries, create new markets, and revolutionize the way we live our lives. Product managers play a crucial role in identifying and pursuing disruptive innovations, but they must be willing to take risks and overcome challenges. Established companies must also adapt to disruptive innovations to remain competitive and relevant in today's fast-moving business landscape.