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Why Your Startup Should Strive to be an Industry Partner Instead of an Industry Disruptor

Sonny Patel February 13, 2020

Many in Silicon Valley may subscribe to the mantra of “move fast and break things,” but entrepreneurs should think twice before billing their startup as an industry disruptor straight out of the gate. That type of language might initially pique investors’ interest, but it also risks putting people in the industry on defense. Starting out, your focus should be on building a business that partners with your industry. Think of this conscious approach as “move intentionally and make things better.”

To be clear, disruption is not a bad thing. Disruptors ignite ideas that can change things for the better. They can bring products and services to customers who previously couldn’t access them, reduce inefficiencies and even lower costs. Disruption may very well happen naturally as a result of your business. But this requires a balanced approach of being an industry partner while creating innovations that move the industry forward.

Take Netflix. The world’s largest streaming service didn’t set out to fundamentally alter how we consume media. Rather, as co-founder Reed Hastings tells it, the company was created to find a way to avoid late fees, like the $40 one he incurred at Blockbuster after losing a copy of “Apollo 13.” So he and Marc Randolph tested sending a CD through the mail, and Kibble (Netflix’s original name) was born. Streaming would come later, but first, Hastings and Randolph had to work within the confines of the video business and build up the company’s reputation. In other words, they had to partner with movie studios before competing with them.

It’s more effective to enact change by partnering with those in the industry. Why? Because getting people to change their ways is easier if you’re seen as an ally. Once you’re a trusted partner, you’ll be able to solve the problem together. Taking this approach may very well result in disruption, but you’re now attacking problems from within.

The danger here is trading your outsider silo for an industry one, which could result in tunnel vision. Innovative entrepreneurs must hold onto their vision for a better way to do business even as they work with industry partners.

So how should you operate as an innovative industry partner?

1. Become an expert on your industry.

The best entrepreneurs are good at pattern recognition, which will help you identify up-and-coming industry changes and help you capitalize on them. Start by learning all you can about how an industry operates by reading articles and going to industry conferences. Find out what the biggest pain points are. This also requires being a good listener. What are people in the industry actually saying? How are they expressing themselves? What kind of panels do they host? By constantly observing the state of the market and how things like technology are affecting consumer behavior, entrepreneurs will start to recognize patterns and see business opportunities for new products or services.

2. Be a problem-solver.

Identifying opportunities is the first step, but the next is offering solutions. Doing research will be critical, but research without empathy all but guarantees your efforts will fall flat. Empathy invites creative solutions. By placing yourself in the shoes of people in an industry, from executives down to rank-and-file workers and customers, you’ll take a wide approach that will help you see the best solution that benefits everyone. A 2015 paper by Bocconi University researchers confirms this: “User perspective taking lets entrepreneurs identify market opportunities that are not only more innovative, but also more desirable and aligned with the user needs.”

3. Remember that customers come first.

The goal of innovation is not to strictly improve things for those within the industry. Innovators should always focus on customers first and foremost. How can you make the customer experience better? As Thales Teixeira wrote in Harvard Business Review, “The most common and pervasive pattern of disruption is driven by customers. They are the ones behind the decisions to adopt or reject new technologies or new products. When large companies decide to focus on changing customer needs and wants, they end up responding more effectively to digital disruption.”

Approaching your industry as an ally will not only let you see opportunities that those who strictly focus on disruption won’t, it also gives you another competitive advantage of having the trust of industry players. When you champion your industry and your allies within it, everyone wins. And eventually, you may realize that you were a disruptor all along.

Social Entrepreneurship / Stakeholder Capitalism
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