Better be the first to disrupt

Better be the first to disrupt. Why? Because it’s probably going to happen anyway and it’s much more profitable to be the disruptor.

Instagram versus Kodak

Let’s start with the most recent: Instagram versus Kodak

Facebook has acquired Instagram, a fun, popular photo-sharing app for mobile devices for approximately $1 billion in a combination of cash and shares of Facebook.

4 months before that: Eastman Kodak has filed for chapter 11 bankruptcy in New York

The question is why a larger, established company like Kodak didn’t invent Instagram, or an app like it. They have the resources, the talent and the opportunity. What is it that stalled – possibly fatally – this once-smart company? The short version is that they struggled unsuccessfully to adapt in the face of a changing digital world, filing bankruptcy even as photo-industry upstart Instagram was growing at the rate of about 1 million users a month.

Netflix versus Blokbuster

Blockbuster, once the dominant DVD franchise, has fallen into bankruptcy in an era of other video options. In Blockbuster’s case, it was streaming service – such as NetFlix – and mail-order movie service that possessed the foresight that Blockbuster lacked. And while its competitors steadily gained market share through novel and innovative approaches, Blockbuster remained defiantly steadfast in its profound reliance on a brick-and-mortar business.

Reinvent to stay alive

The speed of this change – the neck-snapping velocity that drove Instagram from zero to 30 million customers in under 2 years – is happening faster than management teams have reacted. This is somewhat understandable. After all, many organizations are struggling with change management.

To survive in the face of these smart, connected and digitally adept customers, established firms need to understand what’s happening, and reinvent themselves to stay alive.

Smaller companies tend to be nimbler and more innovative. Yet when a bigger company “gets it” – such as Amazon, Apple, USAA, Zappos, and others – they dominate. Their markets are forever changed.

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