Fear not, you endless modifiers of business models. You can probably acquire or license whichever future technology will most endanger your business.
Think what you will of “disruption” as a co-opted or misunderstood concept. The overall idea of a business model becoming outdated (or whatever you want to call it) remains top of mind for entrepreneurs.
You fear getting Netflixed like Blockbuster was. Or getting Amazoned like bookstores were.
Here’s the thing: A recent, exceptionally thorough study previewed on the Knowledge Wharton site demonstrates that most disruptive upstarts do not topple industry incumbents. In fact, the professors involved with the research conclude that upstarts are more likely to license their wares to incumbents or get acquired than they are to compete with and eventually topple established players.
For their study, the professors — Wharton’s David Hsu, MIT’s Matthew Marx and the University of Toronto’s Joshua Gans — tracked 579 startups over six decades in the speech-recognition space. Coincidentally, two other fresh reports — one from faculty at the University of Chicago’s Booth School of Business, the other from the Brookings Institute — reached a similar conclusion. “Established businesses have less and less to fear from would-be disruptors,” writes Ben Casselman on fivethirtyeight.com, summarizing the recent research.
Now that you know this — that the monster under the bed really just wants to be your friend — will you have an easier time sleeping at night?
Probably not. At least not until you grab your flashlight and see for yourself.
So here’s a quick peek at what Hsu, Marx and Gans discovered:
1. The case of Vlingo.
You’ve maybe heard of Vlingo. It’s a maker of speech-recognition software often referred to as “the Siri of Android.” But five years before Siri came out, Vlingo (founded in 2006) already boasted a comparable “grammar-free” speech-recognition technology for phones. (That means that you didn’t have to say certain key words or verbal sequences for the technology to understand you.)
“Vlingo went to market as a competitor to prove its technology, and then later switched business strategies by licensing to device manufacturers,” notes the Knowledge.
Here’s what Vlingo didn’t do: It didn’t stay independent, conquering all incumbents in its path, until it became the industry’s dominant paradigm.
Instead, Vlingo transitioned from competition to cooperation.
2. The case of the many.
It would be one thing if Vlingo was the only startup in the speech-recognition space that chose cooperation over competition. In fact, Vlingo’s cooperation path was commonplace among startups the professors studied. “This result calls into question the notion that disruptive technologies necessarily result in the demise of incumbents,” they write.
So if you’re an incumbent, relax. You can sleep a while. It’s even safe to look under the bed. Chances are you won’t get disrupted. “What we’re saying is, you don’t have to predict the future,” Marx tells Knowledge Wharton. “There may be 30 startups out there trying different disruptive or potentially disruptive technologies. So you can take this wait-and-see approach."
In other words, let the startups fight among themselves. Winners will emerge. And then you’ll probably be able to license or acquire whatever it is they do. For yourself. Without fear of being toppled.
