How to Recognize an Industry Ready for Disruption

Is your industry ready for disruption? Here's how to find out.

How to Recognize an Industry Ready for Disruption

As an entrepreneur, few opportunities are as lucrative as the chance to totally disrupt an industry and reinvigorate it with new life. And while it’s certainly challenging to do, the reality is that these opportunities stick out like a sore thumb. You just have to know what you’re looking for, though.

Disruptive stories and inspiration.

When Audi created the quattro in 1980 – an effective, mechanical AWD system of parts that allowed World Rally Championship (WRC) cars to gain better traction and performance – they were perhaps the only automobile brand that fully realized the significant evolution that was about to take place in how parts were manufactured with an emphasis on high-end performance.

Audi understood the growing need for a heightened-focus on improving performance parts’ capabilities and limitations in extreme scenarios. They had long been involved with the WRC, and Audi quickly recognized that the key to consistently producing a winner was creating a car built with the most advanced auto parts that helped easily adapt to changing road conditions. 

In 2001, Apple released the first ever iPod. While it’s hard to imagine a world without iPods, iPads and iPhones, we all lived in such a world not too long ago. It took some special foresight from Steve Jobs, Jon Rubinstein and his team of hardware engineers to create that revolutionary music player. In a time where portable music players were clunky and user interfaces were awful, Apple saw an opportunity to change an old industry.

In 2010, Uber – the now popular transportation service – launched in San Francisco. It was created as a black-car service and cost 1.5-times the standard taxi fare, but the convenience factor made it an instant hit.

Uber is now estimated to be worth as much as $62.5 billion.

Here are three signs an industry is ready for disruption.

So, what do AWD parts for cars, an iPod for music and a car service for transportation all have in common? Well, these founding companies all recognized industries ready for disruption and seized the opportunities before them.

Whether it’s an auto shop tuning an Audi rally car in 1980, midnight Macintosh meetings with Steve Jobs in 2001, or waiting for taxis in San Francisco in 2010, entrepreneurs are always looking for opportunities to disrupt stale industries. Do you know what to look for? Here are a few of the telltale signs:

Stale and complacent.

Sometimes, you can just look at industries and tell that they’re resting on their laurels and still living off past successes. In these industries, companies get complacent, creativity is replaced by maintaining, and leading organizations see themselves as indestructible. As a result, new entrants aren’t taken very seriously and are able to disrupt the status quo.  

Out of touch with customers.

Perhaps the biggest sign that an industry is ready for disruption is that leading companies have lost touch with their key customers. This is incredibly dangerous, as customer pain points evolve over time and frustrations lead them elsewhere for better solutions. This sign is directly tied to the previous – complacency – and shows just how vicious the cycle can be. 

Old business models.

Ask any successful company that’s been around for a few decades, and they’ll tell you their business model has shifted every few years.

Look at stale industries, however, and you’ll notice that many companies have failed to modernize their business models, which leads to outdated operations.

Identifying an industry that’s ripe for disruption is only half the battle. But once you know what you’re looking for, you’ll find it easier and can nudge your way in.

Is Your Industry Ready for Disruption?

There’s nothing easy about disrupting an industry. Not only do you need the creativity to push the industry in a new direction, but you also have to carefully educate and excite consumers to shift their mindset from the current way of doing things.

Nevertheless, it all starts with recognizing when an industry is ready for disruption. If you can do this, you’ll be well on your way to success.