Big Bang Disruption: Strategy in the Age of Devastating Innovation by Larry Downes & Paul Nunes

Author:Larry Downes & Paul Nunes
Language: eng
Format: mobi
Publisher: Penguin Publishing Group
Published: 2014-01-06T14:00:00+00:00

These examples reveal more than just the increasing advantage of combinatorial innovation. They also reflect a new approach to basic research in general. Rather than take on an industry’s biggest problems head-on with bold, expensive R&D, Big Bang Disruption starts with narrow experiments in markets for new products, often intentionally limited to short production runs as with NeoLucida. Limited trials can be great test beds, generating revenue, experience, and reusable and recombinable data sources.

Innovators and their investors take what they learn from these experiments and rapidly apply them in adjacent markets. In industries such as health care and public utilities, where regulatory barriers to entry have desensitized incumbents to the threat of new entrants, entrepreneurs can often experiment in plain sight without being noticed. This allows for rapid innovation at the margins of an industry’s major technological obstacles. Just as important, it puts off potentially deadly political and legal fights until the disruptor is ready for its big reveal.

Right now, for example, innovators are performing early market experiments in new forms of disposable chemical batteries and other sources of low-cost power generation. Launched in 2013, the portable recharger PowerTrekk utilizes basic principles of experimental hydrogen fuel cells to create emergency charging batteries for mobile electronics. Scoop up some water, and a disposable cartridge filled with basic chemicals extracts the hydrogen to charge a small battery, leaving sand as the residual product.

In the energy sector, the development of high-end hydrogen fuel cells has been going on for years, focused on electricity generation and rechargeable cells for vehicles. Development costs are high, progress has been slow, and environmental concerns are hard to define or alleviate. PowerTrekk offers the same basic technology, but on such a small scale that it can use simpler chemistry and inert materials.

That approach has not only led to a commercial product, but may ultimately point to solutions for the industry’s most intractable problems. It is precisely the kind of unencumbered development that incumbent energy companies should be watching closely, if not performing themselves.

Large-scale disruption in energy and other regulated industries, however, may just as easily emerge from the edges of the industry as from its core. That’s because the scale of such industries is so immense that even small improvements in efficiency and price can shift the balance of power and profits. Given the legal constraints on regulated incumbents, better and cheaper performance may originate with unregulated outsiders exploiting new data sources, networks, and devices to introduce information services that separate providers from their customers. Without solving any of the industry’s fundamental problems, these new tools can still generate significant efficiency improvements while building expertise that can spawn future disruptors.

In the electricity industry, for example, substantial efficiencies are being realized as part of the development of what are called “smart grids.” In a smart grid, power plants, distribution networks, meters, and even individual sockets collect usage and demand information in real time using a variety of sensors and other component technologies. Analysis and reporting of that information can

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