Most new businesses have old business models

Terms like "disruptive" and "tech business" just distract from the essential similarity between many companies.

Slate's Matt Yglesias decries the over-use of the word "disruptive":

This is a shame, because while all innovation is great, the idea of disruptive innovation as a distinctive kind of innovation has real value. And while disruptive innovation is generally a good thing, nothing inherent to the idea implies it’s the only good thing or the best thing. Entrepreneurs should not be ashamed to admit that their ideas aren’t particularly disruptive.

Disruptive innovation is important because of what it's not: "sustaining innovation". The two terms come from Clayton Christensen's 1997 book The Innovator’s Dilemma. The latter describes the innovation of building a better mousetrap, so to speak: a company looks at their products, looks at their clients, and tries to improve their products to better fit their clients needs. Christensen uses the example of IBM building mainframes in the 1960s and 1970s, but it's just as easy to turn to Nintendo progressing from the Game Boy to 3DS, or Kodak making ever better point-and-shoot cameras.

In each case, the company focused on winning an ever greater share of the market by being the best at what they do, without noticing that there's another way they could lose out: from companies doing a much worse job. So IBM, focusing all its attention on the mainframe market, failed to account for the rise of personal computers, which were far worse at the sort of jobs that businesses used mainframes for, but cheap enough that individuals could buy them; Nintendo didn't realise that the market for mobile games would be content playing simpler, cheaper games on their smartphones, rather than paying £40 for a fully-fledged port of Ocarina of Time; and Kodak didn't account for the desire of people to take truly awful quality pictures on their cameraphones.

That's disruption: competing, not by making something better than the incumbent, but by making something which, despite being worse, is so much more accessible that it eats market share from the bottom-end up.

(Incidentally, are you seeing the pattern here? Smartphones have been astonishingly disruptive in a nearly every area they've touched. As well as point-and-shoot photography and handheld gaming, they can probably be blamed for the demise of MP3 players, PDAs, most GPS navigation devices, and, if you've ever sat on the back of a bus on the school run, 1980's style boomboxes. In nearly every case – and certainly the last – they're considerably worse than a purpose-build device at doing the same thing, but you can't beat the price, nor the portability.)

In a way, it's a more specific example of the point repeatedly made: there's no such thing as a tech company. Here's Quartz's David Yanofsky on that topic:

Perhaps a tech company employs software engineers to improve product offerings and user experiences. AT&T has employed developers for years, programming the infrastructure of telecommunications to route phone calls around the world. It’s not called a tech company though. Skype is.

Perhaps a tech company uses technology to change the way we behave. Amazon.com’s business of selling countless items at any hour to anyone, then shipping them anywhere, surely fits into this category. Yet, in practice, it is no different than a Sears Roebuck mail-order catalog.

Hiving businesses off into their own little sector because they use the internet might have made sense 20 years ago, but not anymore. Amazon and Waterstones both have retail stores and online sales; Google and the Guardian both have business models focused around selling ads to firms trying to market to people using their websites.

As with "tech business" before it, "disruption" nowadays seems to just mean "doing things better than the old way because computers are involved". Which is important, but obscures the fact that disruption's a useful term which has a meaning of its own. And it also hides the fact that there's a lot more similarity between seemingly disparate fields than there seems to be at first glance.

A trophy on stage at TechCrunch Disrupt. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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The campaign to keep Britain in Europe must be based on hope, not fear

Together we can show the world a generous, outward-facing Britain we can all be proud of.

Today the Liberal Democrats launched our national campaign to keep Britain in Europe. With the polls showing the outcome of this referendum is on a knife-edge, our party is determined to play a decisive role in this once in a generation fight. This will not be an easy campaign. But it is one we will relish as the UK's most outward-looking and internationalist party. Together in Europe the UK has delivered peace, created the world’s largest free trade area and given the British people the opportunity to live, work and travel freely across the continent. Now is the time to build on these achievements, not throw them all away.

Already we are hearing fear-mongering from both sides in this heated debate. On the one hand, Ukip and the feuding Leave campaigns have shamelessly seized on the events in Cologne at New Year to claim that British women will be at risk if the UK stays in Europe. On the other, David Cameron claims that the refugees he derides as a "bunch of migrants" in Calais will all descend on the other side of the Channel the minute Britain leaves the EU. The British public deserve better than this. Rather than constant mud-slinging and politicising of the world's biggest humanitarian crisis since the Second World War, we need a frank and honest debate about what is really at stake. Most importantly this should be a positive campaign, one that is fought on hope and not on fear. As we have a seen in Scotland, a referendum won through scare tactics alone risks winning the battle but losing the war.

The voice of business and civil society, from scientists and the police to environmental charities, have a crucial role to play in explaining how being in the EU benefits the British economy and enhances people's everyday lives. All those who believe in Britain's EU membership must not be afraid to speak out and make the positive case why being in Europe makes us more prosperous, stable and secure. Because at its heart this debate is not just about facts and figures, it is about what kind of country we want to be.

The Leave campaigns cannot agree what they believe in. Some want the UK to be an offshore, deregulated tax haven, others advocate a protectionist, mean-hearted country that shuts it doors to the world. As with so many populist movements, from Putin to Trump, they are defined not by what they are for but what they are against. Their failure to come up with a credible vision for our country's future is not patriotic, it is irresponsible.

This leaves the field open to put forward a united vision of Britain's place in Europe and the world. Liberal Democrats are clear what we believe in: an open, inclusive and tolerant nation that stands tall in the world and doesn't hide from it. We are not uncritical of the EU's institutions. Indeed as Liberals, we fiercely believe that power must be devolved to the lowest possible level, empowering communities and individuals wherever possible to make decisions for themselves. But we recognise that staying in Europe is the best way to find the solutions to the problems that don't stop at borders, rather than leaving them to our children and grandchildren. We believe Britain must put itself at the heart of our continent's future and shape a more effective and more accountable Europe, focused on responding to major global challenges we face.

Together in Europe we can build a strong and prosperous future, from pioneering research into life-saving new medicines to tackling climate change and fighting international crime. Together we can provide hope for the desperate and spread the peace we now take for granted to the rest of the world. And together we can show the world a generous, outward-facing Britain we can all be proud of. So if you agree then join the Liberal Democrat campaign today, to remain in together, and to stand up for the type of Britain you think we should be.