Zero to One_ Notes on Startups, or How to Build the Future ( PDFDrive )

Silicon Valley has become obsessed with “disruption.” Originally, “disruption”
was a term of art to describe how a firm can use new technology to introduce a
low-end product at low prices, improve the product over time, and eventually
overtake even the premium products offered by incumbent companies using
older technology. This is roughly what happened when the advent of PCs
disrupted the market for mainframe computers: at first PCs seemed irrelevant,
then they became dominant. Today mobile devices may be doing the same thing
to PCs.
However, disruption has recently transmogrified into a self-congratulatory
buzzword for anything posing as trendy and new. This seemingly trivial fad
matters because it distorts an entrepreneur’s self-understanding in an inherently
competitive way. The concept was coined to describe threats to incumbent
companies, so startups’ obsession with disruption means they see themselves
through older firms’ eyes. If you think of yourself as an insurgent battling dark
forces, it’s easy to become unduly fixated on the obstacles in your path. But if
you truly want to make something new, the act of creation is far more important
than the old industries that might not like what you create. Indeed, if your
company can be summed up by its opposition to already existing firms, it can’t
be completely new and it’s probably not going to become a monopoly.
Disruption also attracts attention: disruptors are people who look for trouble
and find it. Disruptive kids get sent to the principal’s office. Disruptive
companies often pick fights they can’t win. Think of Napster: the name itself
meant trouble. What kinds of things can one “nap”? Music … Kids … and
perhaps not much else. Shawn Fanning and Sean Parker, Napster’s then-teenage
founders, credibly threatened to disrupt the powerful music recording industry in
1999. The next year, they made the cover of Time magazine. A year and a half
after that, they ended up in bankruptcy court.
PayPal could be seen as disruptive, but we didn’t try to directly challenge any
large competitor. It’s true that we took some business away from Visa when we
popularized internet payments: you might use PayPal to buy something online
instead of using your Visa card to buy it in a store. But since we expanded the
market for payments overall, we gave Visa far more business than we took. The
overall dynamic was net positive, unlike Napster’s negative-sum struggle with
the U.S. recording industry. As you craft a plan to expand to adjacent markets,
don’t disrupt: avoid competition as much as possible.