Disruptive innovation: what it is, its importance, and examples

But how do some companies manage to revolutionize consumer habits and even entire markets in this way? 

The answer lies in the concept of disruptive innovation.

In this content, you’ll understand what this type of innovation is, its characteristics and importance, and see practical examples. Keep reading to learn more!

What is disruptive innovation?

Disruptive innovation is a term used to describe innovations that drastically change the way a market or industry works , often with better products or services than existing ones.

To better understand the concept, we can look at the meaning of “disruptive”: it is something that causes ruptures and interrupts the course of a process. 

In other words, disruptive innovations are known for breaking established patterns, products, or services, bringing a new scenario to the market. 

Main characteristics of this type of innovation

By promoting profound transformation in the market and creating new forms of consumption, disruptive innovation has some particularities. 

The idea is not to create something completely new, but rather to improve something that already exists and, from there, offer a new product or service to the consumer. 

Typically, smaller companies and startups challenge established leaders with more affordable and efficient solutions that ultimately replace conventional solutions.

In practice, the main characteristics of this type of innovation are:

• Accessibility : this type of innovation generally offers more accessible and affordable solutions, which democratizes the availability of products or services to the public;
• Smaller initial target market : Disruptive innovation often starts in niche markets that are not a priority for established companies and then expands;
• Simplicity : These new products or services are often simpler and more practical to use than traditional solutions, making them more attractive to consumers.

Examples of disruptive innovation

Nothing better to understand the concept of innovation than through practical examples. Below are some examples of how this type of innovation stands out. 

Netflix

Netflix is ​​one of the most important names when it comes to disruptive innovation. The company began as a sort of online rental store: users could order a movie, and the DVD would be mailed to their home.

This model didn’t attract as many consumers, which encouraged the company to create a new business format, as we know it today. 

For a monthly fee, users can access a wide range of films and series in a wide variety of styles, including exclusive Netflix productions. 

This made access to audiovisual productions much more accessible, practical and easy, leaving DVDs and even television as supporting actors. 

WhatsApp

Today, many people can’t even imagine what it was like to send paid SMS messages to chat with friends and family. WhatsApp revolutionized online communication.

With instant messaging and free registration, the app allows users to chat with multiple people and access specific features, such as video calls and group chats, for example. 

The platform also developed WhatsApp Business, aimed at companies, which also impacts the way consumers communicate with brands. 

Spotify

Along the same lines as video streaming, music platforms like Spotify have transformed the way people consume artists’ hits.

Previously, it was necessary to purchase CDs, vinyl records, and cassette tapes, as well as devices compatible with these audio formats, to listen to specific tracks on that album. 

Today, with a monthly subscription (or even a free plan), you have access to thousands of songs, from different bands and singers, in one place.

How important is disruptive innovation?

Disruptive innovations are essential for stimulating markets, developing new business models, and creating new opportunities. 

All of this contributes to an improvement in the quality of products and services, driven by increased healthy competition between companies. 

As a result, new players are emerging in the market and economic growth remains strong, allowing small entrepreneurs and startups to enter markets previously dominated by large corporations.

Beyond that, this type of innovation democratizes access to technologies and services, making them more accessible to a larger portion of the population.

The difference between disruptive and incremental innovation

The main difference between disruptive and incremental innovation lies in the impact each has on the market. While disruptive innovation brings new ideas that replace traditional solutions, incremental innovation seeks to gradually improve what already exists. 

In incremental innovation , the goal is to improve existing products, processes, and services, increasing the efficiency of that solution. Therefore, it doesn’t have as significant an impact as disruptive innovations.

This is the case when updating software to fix bugs or add new features, for example. 

Disruptive solutions, on the other hand, create new solutions aimed at niches that are often “forgotten” by the market. 

They begin to circulate among consumers and eventually replace traditional models as they are more accessible, efficient and economical. 

It is worth noting that disruptive innovation also differs from radical innovation , which creates new paradigms in the market and completely transforms the scenario, such as the smartphone, for example.