Uber And Disruption
Usually an industry’s disruption happens faster than anyone anticipates. Things look like business as usual to the slow moving incumbents, who often have not faced a real market threat for a while. Then the incumbents’ business undergoes sudden, cataclysmic collapse. Uber and Lyft are in the midst of causing this pattern to eat away at the taxi industry.
Below are the typical phases of disruption:
1. Overconfidence. As the disruptive companies emerge, the incumbents view the new entrants as specialized toys that could never threaten their decades-old franchise. This is the time for the incumbents to take action and innovate, but instead they usually ignore the new entrants, or often try to delay them with regulatory actions, such asforcing UberCab to change its name to Uber. Uber and Lyft’s early skirmishes with regulatory bodies are good examples of this standard tactic. Similarly, Airbnb has been pursued by the hotel lobbyists in NYC.
2. Sudden collapse/downward spiral. Sudden realization that things have changed. Realization is typically sparked in the incumbent through a drastic turn of events – e.g. the incumbent unexpectedly misses a quarter in a big way when its business evaporates faster than anticipated. A sharp collapse in its business is often the singular signal that the industry has hit a tipping point and an irreversible downward spiral kicks in for the incumbent’s business.
Read full story at: http://techcrunch.com/2014/01/19/uber-and-disruption/?ncid=tcdaily