Google and disruptive innovation

Google has a history of developing disruptive innovations in the tech space. The last few years have seen Google pushing their Chromebook computers heavily, achieving the dominant market share in the education sector, and seeing exponential growth overall.

What is disruptive innovation?

'Disruptive innovation' is a term coined by Clayton Christensen of Harvard Business School, and whilst his depth on the topic goes far beyond what I will cover for this article, the notion is simple to grasp. A disruptive innovation is an innovation that occurs in a sector where the market is already being over-served - the offerings available are way beyond what's needed by the majority of consumers. And attached to that offering is a hefty price tag.

Clay Christensen's Disruptive Innovation:  innovations occur when the least-demanding consumers are being drastically over-served. Scaled back, simpler products will suffice.

Clay Christensen's Disruptive Innovation:  innovations occur when the least-demanding consumers are being drastically over-served. Scaled back, simpler products will suffice.

This leaves the market ripe for a stripped down, cheaper versions of the product already on offer. And Google have been wise to this.

The Chromebook and disruptive innovation

The Google Chromebook is a simple laptop, providing internet access and a suite of cloud-based apps. It has a minuscule hard-drive (the one I'm writing on at the moment is about 16GB) but includes 100GB of cloud-space via Google Drive. They boot in about 10 seconds max, and have the hardware spec of a 2010 Apple MacBook Pro. They're suitable for about 90% of my workload, are highly portable, but most importantly carry a price tag of approximately £150-250, undercutting even the cheapest Windows machines.

The Chromebook I use is an Acer Chromebook 13. It's simple and a joy to use, and performs 90% of the tasks I need from a computer.

The Chromebook I use is an Acer Chromebook 13. It's simple and a joy to use, and performs 90% of the tasks I need from a computer.

This is disruptive innovation in action. Google realised that the vast majority of users spend nearly all of their time on their laptops writing up documents, browsing Facebook, and watching Netflix. A machine that offers anything far beyond that is, for the most part, overkill. However, laptops have been around for decades, and Chromebooks entered the market over 20 years later.

What makes Google Cardboard fascinating is the sheer speed in which the disruptive innovation occurred.

The virtual reality market

Virtual reality is about to become the biggest battleground in tech. Sony, Microsoft, Samsung, Facebook (with Oculus Rift), HTC... the list reads like a who's who in tech (with the notable exception of Apple). Some of them are targeted at gamers, others at the everyday techie consumer - every major company is looking to show off a bigger and better offering.

And then there's Google.

In comes Google Cardboard

Google Cardboard was an idea born out of the famous 'Innovation Time' that all employees are granted. Stylistically, it has more in common with a pair of those old 3D red and green glasses than it does with typically bulky VR offerings. But it works, and it works simply.

How Google Cardboard works

After a little cardboard origami, users have the perfect cradle for their smartphone, and Google Cardboard sits the device in front of their eyes. Any number of Google Cardboard approved apps (naturally, most appear on Android, but there's a growing number on the Apple ecosystem) can be downloaded to the phone and used when it's placed in the device.

The simplicity of Google Cardboard: Slip your phone into the device and voila - virtual reality is a, well, reality.

The simplicity of Google Cardboard: Slip your phone into the device and voila - virtual reality is a, well, reality.

Your smartphone already offers a large, high quality screen to stare at. It's already connected to an app store of some description, enabling you to download the games and software for use in VR. It's already got gyroscopic capabilities, meaning that as you move it the action on-screen changes. And, most importantly, you already own it. In effect, this cost is negated. All that's needed is something to strap it to your head. And this is where Google Cardboard comes in, retailing at a about £10.

Put it together, slot your phone in, and away you go.

How Google Cardboard is disruptive

I previously mentioned most of the VR offerings are being targeted at gamers and tech-savvy consumers. The disruptive element to Google Cardboard means that anyone and everyone will want to try one. The cost is so tiny it's worth it for the novelty value alone. And it will serve 90% of consumers adequately... spending £200+ on a VR headset by any of the tech companies above will be, in their eyes, a matter of diminishing returns.

Cmoar virtual cinema for Google Cardboard

Disruption before there's even a market

And what's crazy is that, unlike your typical disruptive innovation that Clay Christensen highlights, Google Cardboard is a disruptive innovation in a market that doesn't even fully exist yet. Most of the big players haven't yet released their products, and Google has already undercut them with a product that will suffice for most, and retails at a price so affordable you can't really rationalise not giving it a go.

In many ways, this is the nature of the tech industry now. Innovation is happening so rapidly that we as consumers are spoilt for choice before the products even hit the market. The same thing is happening in the home battery market - Tesla, Mercedes-Benz, and Powervault are all competing with each other before a single home battery has actually been installed. However, Google Cardboard is a rare example of disruptive innovation occurring before the market has truly developed.

What can we learn from this?

Google's initiatives here highlight an important lesson: never lose sight of the market, even if that market doesn't yet fully exist. Understanding consumers, their needs and desires, and how your offerings meet them is vital.

How to approach disruptive innovation

If your product is yet to go to market, or you're looking at entering a a market, or even if that market doesn't exist yet (as in the case of VR), ask yourself these simple questions:

  • How are the majority of consumers being over-served? What don't they care about? What don't they use?
  • Can that functionality be removed and result in a lower cost base for ourselves? Can this lower cost then be handed over to the consumer in full, or at least in part, in the form of a lower price?
  • Will this lower price attract non-customers, and lead to market growth?

Applying this to Google

Google's Chromebook attracts those who are looking for a simple, hassle-free portable computer with no frills. It's low price-point makes it worthwhile as a secondary device for on-the-go work or fun, or as an ideal purchase for school kids and students, elderly folk, and basically anyone not looking at doing media editing, gaming, programming or a handful of other resource intensive tasks.

Google Cardboard strips away expensive materials, the necessity to purchase a screen (which most of already own in the form of a smartphone), and high-tech features, giving a low price headset that makes the upcoming VR market fun and cheap to enter for even the least interested among us.

The disruptive innovation pay-off

There are always going to be some people who do use every feature. When I talk about the 'majority', I'm talking about 95% of the consumers out there. You have to warrant lowering the price and serving the more price sensitive mass market consumers out there in the trade-off that you'll attract a heap of new interest from those who wouldn't otherwise buy your product. There will always be a necessity for biggest, flashiest, and most functional products - they will inevitably serve some people. However, reaching the mass market is often a case of stripping down, rather than offering more. This, at its core, is disruptive innovation.

Rob

Brighton, United Kingdom