The new world of disruptive business

Posted on July 02, 2015

Disruption in business is nothing new, but the speed at which it occurs – enabled by digitisation and mobile technologies – is. While disruption is seen as a threat by incumbents, it presents opportunities for entrepreneurs who are more agile and able to implement ideas quickly.

A panel at a recent forum held at the Gordon Institute of Business Science (GIBS), in collaboration with Dimension Data, discussed the characteristics of disruptive businesses and what sets them apart in a competitive business world.

Services are inspired by need

General Manager for Uber Johannesburg and Durban, Alon Lits said the creation of the company was inspired by need: ‘Uber is a technology platform, a lead-generation for drivers, not a transportation company. It is a good example of the real world meeting technology.’  Uber has created a way for people to get around cities through an app that connects drivers and potential riders. A two-way rating system allows drivers and riders to rate each other and places emphasis on customer service. The service is ‘more efficient and affordable than owning a car,’ according to Lits.

With over a million trips booked through the platform in South Africa during 2014, ‘Uber is bringing safe and reliable transport to underserved areas, while empowering drivers to become small business owners,’ Lits said.

Many of Uber’s driver partners have gone from owning one or two cars to managing fleets, and the company is planning to make financing available to its drivers, as small business loans to empower entrepreneurs. Lits said that the company is constantly looking for the next disruptive activity based on customers’ needs. The global company is currently rolling out UberRUSH for product delivery and UberEATS, a food delivery service. The UberPool service allows riders to share a ride and split the cost with another person who happens to be riding along a similar route. ‘Our ultimate aim is to take cars off the road and reduce congestion. We can have a huge impact on mobility in cities,’ Lits said.

Chidi Okpala, Chief Executive Officer of Airtel Mobile Commerce, explained that Airtel’s mobile payment offering is constantly evolving with changing customer needs and that innovation is born out of challenges. He said that one of the reasons the telecommunications company has succeeded where traditional banks have failed in offering mobile payments to consumers who do not make use of other banking facilities, is that their brand resonates with these consumers in remote areas. The company’s mobile money service aims to drive financial inclusion, create a cashless economy and increase transparency and safety by doing away with the need for cash.

Partners are vital to success

Okpala explained that Airtel could not run its mobile payments business without partners. The company works with banks, merchants, distribution partners and 250 000 agents across the African continent to make its offering possible.

‘A network of partners is a key ingredient to success,’ Lits said. Upon launching in South Africa, Uber partnered with established banking brands to facilitate their cashless payment system. Lits said this was a win-win situation as it allowed the partners to present themselves as forward-thinking and progressive to their customers.

Mobile technology as an enabler

One of the underlying enablers of new disruptive businesses is mobile technology. Okpala said mobile technology is key in emerging markets as it is cheap and the dependencies for the technology to work are minimal. Lits agreed: ‘Smart phones are the future. They are with you all the time and they are the most efficient way to interact.’ Andre Hugo, Chief Jammer and Co-Founder of the micro-job platform M4JAM, which offers point-of-interest jobs such as customer service audits, mystery shopping and brand activation, said mobile phones are the ‘go-to tool of disruption’ as they are always on.

The people behind disruptive business

Hugo explained that the people behind new disruptive businesses are diverse and sometimes from unexpected backgrounds: ‘While some are young, tech-savvy university graduates, many of the entrepreneurs in this space are older and have seen how big and clunky corporates are,’ he said.

Although a number of large corporates are innovative and aren’t afraid of cannibalisation, Hugo said, larger organisations are at a distinct disadvantage when competing against new disruptive market entrants: ‘It is a challenge to innovate within a corporate structure, like swimming upstream. It is much easier to be innovative in a small inventive business.’

- Author GIBS News

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