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The facts and fallacies of market disruption

The term “disruption” remains popular in business schools and startups nationwide, but has there really been a shift, or is the risk/reward system different for big businesses compared to small?

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market disruption

Market disruption or maybe a paradigm shift

I am currently sitting in a restaurant that caused quite a market disruption. By disruption, I mean that their food gave me a stomach ache and it’s disrupted my work day. Well, I’m not sure if it was really disruptive. It might just have caused a paradigm shift.

In increasing number this year, there have been a series of popular articles arguing about the (possible) shift in how small businesses now successfully usurped established organizations. The foundational book that defines much of the business school discussion is “The Innovator’s Dilemma” by Clayton Christenson. The term largely in play is ‘disruption.’ If you want to learn more about it, just ask any recently graduated MBA student or spend six figures for an hour of Christenson’s time. Your choice (note: you can comfortably ask ANY MBA student – whether from the University of Phoenix or Harvard, because they are all learning this same thing).

For those who stay away from these types, here’s a haphazard summary of Christenson’s thesis: small businesses disrupt the market by focusing on cheap/low end needs while the big organizations cater to the luxury crowd. It would seriously be in your best interest to talk to someone from McKinsey about his thesis, though, because I’m probably off here, but you get the gist.

I’ve spent the last 10 years interacting with ‘thought leaders.’ Much of the time, I am fascinated by the insight that people offer into human behavior and business. Often, though, I find myself looking around just waiting for someone else to yell “seriously? What the hell are we talking about again?” Here’s what frustrates me:

1. Word games are fun for everyone

I’m a communication guy, so words are particularly interesting to me. What I find most interesting is the way words change in their usage over time. For instance, back in the days of Zig Ziglar- the term motivational speaker was reserved for the few who motivated masses of people. Then, others started using the term to benefit by associating with Ziglar’s work. We eventually end up with Chris Farley in a van down by the river.

The point? Words change meaning. And yet, people spend hours of energy fighting over the terms that define concepts that attempt to explain business phenomena. Why? I’m not sure, but it brings me to my next point.

2. Enough with descriptions and definitions

I am certainly not one to say that it’s not helpful for entrepreneurs to understand the nature, market conditions, and past recipes of successful entrepreneurial endeavors. Except I don’t think it is.

Look- most small businesses fail. Some succeed. There are small businesses who offer luxury products that fail, and those that succeed. There are small businesses who succeed by capturing the ‘quality at a cheaper price’ market, and those that fail.

There are a number of reasons for this… Bad luck. Under-capitalization. Too much booze. Not enough Adderall. An annoying spouse. Traffic.

You know what will not help a new entrepreneur? Theories in market disruption. Perhaps I’ve read too much of Nassim Nicholas Taleb, but I fall squarely into the camp that argues that past descriptions of ‘this is what happened’ don’t do a whole lot to accurately tell me on a micro level what I should do.

3. Small business versus The Man

Here’s my highly comprehensive research on the market disruption debate (please insert however many big adjectives necessary to truly understand that what I’m about to say next is authoritative).

Big businesses like to be safe. Why? Because risks aren’t rewarded. Sure, the organization needs to risk, but the individual in the organization certainly doesn’t. As a business manager in big company, you can be told all day long that you need to innovate, but if you do and succeed – you get a tiny bonus… if that. If you risk and fail? That 20 million dollars you just wasted means you get to start looking for a new job.

I don’t blame you if instead you choose to spend most of your day reading articles about innovation and risk- and I appreciate you reading and referencing mine in particular.

Small businesses need to take risks. We must be agile. Why? Because we want to eat. The risk/reward and/or benefit analysis results in a completely different sort of decision making.

Now, let’s describe this phenomenon more and categorize it and argue about the words so that we can be really helpful to everyone. Hmmm.

4. Let me give you more information about a subject

Here’s the real rub. You don’t need more information. I recently spoke to a professor who told me the papers he receives from students include the most lengthy bibliographies he’s ever seen… with the worst analysis he’s ever seen.

We live in an age where information is available and abundant. We love to access it, but the problem is that we don’t know what to do with it. And the more time we spend seeking it, the less we have to take the risks to analyze and act.

And in conclusion

Personally, put me squarely in the camp of ‘not giving a crap’ as to whether the current market has shifted in terms of the types of disruption. I’m too busy growing a business.

Curt Steinhorst loves attention. More specifically, he loves understanding attention. How it works. Why it matters. How to get it. As someone who personally deals with ADD, he overcame the unique distractions that today’s technology creates to start a Communications Consultancy, The Promentum Group, and Speakers Bureau, Promentum Speakers, both of which he runs today. Curt’s expertise and communication style has led to more than 75 speaking engagements in the last year to organizations such as GM, Raytheon, Naval Academy, Cadillac, and World Presidents’ Organization.

Business Entrepreneur

If you’re easily distracted, you’re more likely to thrive as an entrepreneur

(ENTREPRENEUR) If monotony and boredom at work- well bores you, it’s possible you may fit with the other entrepreneurs with a quick and constantly changing career.

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When Bill Gates was a kid, he knew he liked messing around with code. He couldn’t have known how it might evolve, but he was willing to live in the distraction, focusing on details when needed, but always learning, moving on, taking risks and growing in the process.

Some of the most successful folks among us are not content to sit and make widgets every day. They cannot thrive in a detail and focused work environment. So, it may come as no surprise to know that people who are more easily distracted are also more likely to thrive as entrepreneurs.

According to this study, if you are intelligent and get distracted more easily, those two qualities combined will likely enhance your creativity. And, that creativity and ability to use distraction as an advantage can be channeled to create new things, jobs, companies, etc.

For those of us who are more easily distracted, who enjoy doing different things every day, and who like learning, a recent article in the Harvard Business Review suggests a good option is to find a career path that provides the right amount of distraction and which is a great fit for your personality. If you do that your talent is more likely to be apparent because you are playing to your strengths. Also, if you are working in your sweet spot you will be more productive and motivated.

Maybe not surprisingly, the top job for those who live in distraction is entrepreneur. The term “easily distracted” often comes with a negative connotation, but considering an entrepreneur is taking risks, making things happen and creating companies, ideas, products that may have never existed, this spins that idea on its head. Entrepreneurs are the chief cooks and bottle washers of the world. They ideate, create, hire and inspire. None of that is possible in a monotonous work environment.

“Unsurprisingly, meta-analyses indicate that entrepreneurs tend to have higher levels of ‘openness to experience,’ so they differ from managers and leaders in that they are more curious, interested in variety and novelty, and are more prone to boredom — as well as less likely to tolerate routine and predictability,” according to the HBR story.

Other careers that are great fits for those of us (me included) who enjoy distraction are PR/Media Production, Journalism and Consultant. What these fields all have in common is, there is never a dull moment, switching from task to task is pretty commonplace, and you will do well if you can be a generalist – synthesizing information and weeding out the unnecessary.

Not sure where your strengths lie? Here’s a quick quiz to give you some feedback on how curious you really are.

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Business Entrepreneur

How can a small business beat a large competitor moving in next door?

(BUSINESS) How do you stand out when a big competitor moves to your neighborhood? Reddit has a few suggestions – some obvious, some not so much.

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Small businesses, especially restaurants have been hit hard by lockdowns. Many closed for good this year, and those that are still hanging on are in a precarious position as their local economies shift.

Last week, a user on r/smallbusiness asked a timeless question that is especially relevant right now. Reddit user longbottomjr writes: “We have a strong competitor moving in next door in a few months. Our restaurant is one that pays the bills but […] I feel that if this new competitor takes up enough market share we will lose our restaurant. Can anyone chime in with resources/ideas I can use to help put together our plan of action?”

Comments quickly pointed out what common sense would dictate.

First, ensure the basics are covered. Being clean, quick, friendly, and high quality will take you far, no matter what competition you’re up against. And as u/horsemullet said, “Customer service also happens before someone walks through the door!” So make sure that your online hours, contact info, menus and social media accounts are up to date and accurate.

Another point emerged that is less intuitive: Competing businesses will naturally gravitate towards similar locations. This is a well-established phenomenon known within game theory as Nash’s Equilibrium. In the restaurant industry, this is actually a good thing. It brings entirely new customers to the area and ultimately benefits all the other nearby businesses, too.

Take advantage of the attention by offering something other spots don’t, like loyalty rewards, specials, unique offerings, or meal deals.

Speaking of the area, a great way to stand out from larger competitors is to build relationships with the community you serve, as u/sugarface2134 emphasized. “In my city there are two Italian restaurants in the same location – just across the parking lot from each other. We always pick the smaller one because the owner truly makes you feel like a member of the family.”

That’s an advantage of being a small, local business that all the money in the world couldn’t buy. Get to know your customers personally and you will not only create loyal regulars, but friends as well.

One of the top rated responses, from u/seefooddiet2200, made an often overlooked but critically important point.

“Talk to your staff and see if they have any ideas. These are the people that are working every single day and may know one or two ‘annoying’ things that if they were switched would make things easier. Or maybe they see that there’s specific things people ask for that you don’t serve. Every single [one] of your employees is a gold mine of insight, you just need to be open to listening to them.”

That is applicable to any business owner who wants to improve their practices.

Ask employees what they think, especially the ones who have stuck around a long time. Not only do they know the ins-and-outs of their jobs, but this builds rapport and trust with your staff. A good boss realizes that employees are more than their job descriptions. They have valuable thoughts about what’s working and not working, and direct access to customer’s opinions.

Good luck, u/longbottomjr! We’ll be rooting for you.

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Business Entrepreneur

How a newly funded coffee delivery startup is thriving during COVID

(REAL ESTATE MARKETING) Seattle’s Joe Coffee finds successful funding in hyper specific clientele and operations even mid-pandemic. But how did they do it?

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Amidst a pandemic, you might not expect a small company with limited clientele to thrive. Yet, Joe Coffee, a Seattle-based delivery service, is doing just that.

Joe Coffee, an aptly named coffee runner, has received millions in funding, a large chunk of which was raised mid-pandemic. Their mission is simple: to bring coffee from smaller shops to local consumers, especially without endangering either party.

There’s a lot to be said about Joe Coffee’s valuation and mission, but what’s more intriguing is their unlikely success.

A food delivery service that focuses on coffee may not seem that niche, but when you look at Joe Coffee’s determination to stick to the Seattle area, coupled with its staunch resolve for frequenting smaller shops (e.g., not Starbucks), the service begins to look pretty specific–and, in an economy that honors sweeping solutions, this is a welcome change of pace.

The way their service works is fairly simple: Joe Coffee provides shops with signs and information on how to order through the Joe network, then consumers are able to download and order through a mobile app on all of the usual platforms. Joe Coffee takes a nine percent cut of the order total, credit card fees included.

In return, customers are able to order from their favorite, local, non-chain coffee shops, both supporting them and sustaining their caffeine addiction at a time where alertness is paramount and grouchiness is all too common.

What’s truly interesting about Joe Coffee’s example is that it demonstrates an availability for small services with extreme specificity in terms of operating capacity. By sticking to unique businesses in a relatively small metropolitan area (as opposed to, say, multiple cities), the service is more likely to be successful in execution and delivery, thereby solidifying its relevance to both consumers and businesses alike.

And, by playing into the need for curbside pickup or home delivery these days, Joe Coffee only furthers the perception that its service is necessary.

If the country begins to reopen–whenever that happens–it will be no surprise to see Joe Coffee maintain a relationship between consumers and smaller businesses in the Seattle area. For anyone offering a similarly niche service, this is a perfect example of a company to which you should pay attention.

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