Last night we held our Disruptors Roundtable and held a party afterwards on the rooftop of the Hotel Vitale in San Francisco. (Scott Beale has great pics of the event). It was great crowd—some of the attendees included Marc Benioff from Salesforce.com, Craig Newmark from Craigslist, Philip Rosedale from Second Life, Jay Adelson from Digg, Brad Garlinghouse and Joshua Schachter from Yahoo, Om Malik from GigaOm, Michael Arrington from TechCrunch, Jeff Huber and Sam Schillace from Google, Stepan Pachikov of EverNote, David Hornik from August Capital, VC Jeff Clavier, Leslie Fine from HP Labs, Dave Nicholson from Zopa, and Chris Larsen from Prosper. Each person in the room had fierce opinions about the nature of disruption, what the definition is, and whether it's even something you should aim for intentionally.
The only definition anyone could agree on was that for a business to be disruptive it has to have the potential to overthrow the existing order. The way I think about it is if a company is attacking the fat profit margins of an incumbent industry (like banking, telecom, desktop software) by offering something cheaper, better, or more convenient to use, then it qualifies in my book. Often disruptive businesses get a foothold by going after underserved parts of the market or entirely new markets, and they expand their scope as the capabilities of their products improve over time. For instance, the PC started as a hobbyist toy, and now it's on every desktop in America.
Marc Benioff pointed out that these days even Silicon Valley is being disrupted because cheap open-source hardware and software is making it possible for startups to bypass venture capitalists. Philip Rosedale picked up on that train of thought and argued that large companies cannot be as disruptive as smaller ones because the economic efficiencies of three guys working in a garage is hard to beat. To which one of the Yahoo execs shot back that Yahoo Answers was built by a small team of engineers in Korea and that it was probably a bigger Web property than any of the other Web startups in the room. (I'm paraphrasing here because I was moderating and wasn't taking notes).
Many of the entrepreneurs in the room were of the mindset that they are not intentionally trying to be disruptive, but rather that disruption is just a byproduct of what they do. In the end, I'm not sure it matters. As one of the VCs in the room, Christine Herron from the Omidyar Network, pointed out, she is more likely to invest in a disruptive startup than in one that is not.
Another thread of discussion that sticks out in my mind was how do you make a disruptive product appealing and acceptable to consumers? Some believed it was just a matter of marketing. But Michael Arrington took exception to that, and argued that great products sell themselves. I believe that is more true on the Web where many products are free and universally accessible to anyone with a PC, but getting someone to switch to an electric car (assuming it can match the price and performance of today's gas-powered vehicles, as Zenn Automobiles CEO Ian Clifford thinks he will be able to do with new batteries from EEStor) is still going to take some major convincing.
A point that was brought up by Yahoo's Jeff Bonforte is that when you are looking for an industry to disrupt, look for unhappy customers. Because consumers who are angry with the companies now serving them are more likely to switch.
There was lots of video shot at the event as well. When that becomes available I will link to it.