No, no, no!

These are all skirting around the real issue. There's only *one* criteria that matters for whether something is disruptive or not :

With a disruptive innovation, the incumbent *can't* get into it due to the structure of the market and their existing business model. Their existing customers DON'T NEED OR WANT the innovation.

What makes MP3 disruptive to the music industry is not that it creates a new market. But that the existing industry, predicated on restricting access to only those who pay, can't figure out a way to embrace it without losing their control.

Blogger didn't disrupt the blogging world. It was simply an early entrant. Google could buy it because it wasn't a threat.

Blogs *are* disruptive. To the mainstream media, whose business model is adding value through investigative reporting, fact checking, mass audience and big advertising deals. Blogs with low quality control and infinitesimal audiences (individually) were not something mainstream media knew how to embrace. Their advertising buyers weren't interested. Newspaper buyers might be interested in reading but not paying.

Google disrupted the online advertising market by figuring out how to sell adverts that big advertising buyers didn't want to buy (little text things that didn't attract attention to themselves), and putting them on sites (like low traffic blogs) that no-one in their right mind would imagine selling adverts on.

Disruptive technologies are often examples of something worse but better. Worse on the price/performance scale that the existing customers value; but able to bring new people into the market.

But it's definitely not about *merely* creating a new market. There are dozens of other new ideas which are creating new markets, which are convenient, easy and cheap; and yet don't disrupt anyone, because the moment they appear above the radar, the incumbents move in and buy them or successfully copy them.

Personally, I don't see the iPod as disruptive. (Not all roaring successes are disruptive.) Well designed, fashionable, good features, sure. But who was the incumbent that was disrupted?

In fact, the only incumbent who could arguably be seen to be disrupted by iPod was Sony. And that was because iPod supported MP3 while Sony, conflicted by also being a music publisher, wouldn't.

hey phil, i pretty much agree with what you said -- in fact i dont see too many spots where we disagree.

allow me to explain:

1. our ideas on the mp3 market are related; *because* the market (meaning the supply and demand) of mp3s is growing, its commercial value is growing, and so it becomes a bigger threat to the existing music industry. it is the new market for digital music that is the primary catalyst in bringing about this change.

2. regarding blogger, my emphasis was on its *simplicity* being the key characteristic that allowed it to become the principal force behind the popularization and commercialization of blogging.

3. google's ability to change the portal game so that it was about search (search = information coordination) is what allowed it to link weird information (aka *contextual* advertising).

4. ipod is disruptive in a number of ways. for starters, they're on their way to disrupting the music hardware market, as their supplanting incumbents like home stereo systems and car stereo systems. second, ipod's had a rather significant role in developing the digital music market, and so deserves some recognition in launching the mp3 disruption.

Hi, do I call you "kid" or "mercury"? :-)

I think I agree with you on quite a bit of the things I've read here. Good blog. All the points you've raised are important.

But I'm quite hardcore about the notion of "disruptive" itself. I don't think you can be explaining what a disruptive technology is unless you use the magic words "the structure of the market doesn't allow the incumbent to get into it" (or similar). Without that, it's too nebulous an idea.

Because, if the incumbants aren't *prevented* by the structure of the market, there's nothing to stop them - and it's merely a "sustaining" innovation.

Distinguishing sustaining innovations from disruptive ones is the main point of "The Innovator's Dilemma" book.

OK, as to your points :

1) "mp3s is growing, its commercial value is growing, and so it becomes a bigger threat to the existing music industry"

The reason mp3s are a threat is because people can (and do) copy them without paying! It's this iniibility of the industry to enforce payment that prevents it from adopting MP3. And that makes MP3 disruptive. If you think this way, you'll notice that blank CDs and burners are also disrupting the industry.

2) Blogger is pretty simple, and pretty good. (I use it.) But it isn't a disruptive blogging tool. There was no incumbant blogging giant who got disupted by it. Blogger was just one of the more succesful of a number of similar sized blogging tool companies that started around the same time and grew together.

3) Google *didn't* disrupt the portal market. The incumbants Yahoo and MSN are still leaders. And they aren't going anywhere soon.

Google didn't even disrupt the search engine market. Though it had a better product and good design. The fact that Yahoo were willing to license Google's search technology is evidence that the technology itself was not something that was a danger to Yahoo. That's a classic case of a sustaining innovation. Yahoo simply weren't interested in competing on search technology.

What Google disrupted was the online advertising market. They did this, of course, by using their superior search and index to make adverts that were more relevant to the pages they were placed on. They doubly disrupted by selling advertising on pages which were beneath the notice of big advertisers.

Yahoo couldn't do this, because they already had existing advertising customers who were demanding the opposite : bigger, more obtrusive ads on higher trafficked pages. Google had no customers to lose by going smaller, less obtrusive, on less popular pages. And their technology made it a) relevant, and b) so cheap to do the deal, that anyone could sell ads. on their page.

4) Hmm. We'll see if iPod disrupts the home stereo market. Not every manufacturer is as conflicted as Sony on this. Apple are definitely winning the race against MS and others for the home media hub, but that's a race from a standing start.

I'll half give you the importance of iPod in the growth of MP3, although that was already on the way since Napster etc. iPod basically took it mainstream.

I suspect iPod's main reason for success against other portable MP3 players was its large storage capacity, which is a clever piece of design and understanding of the user. But I still don't see much reason to think that other companies were prevented from competing with it.

i suppose "kid" or "mercury" are both acceptable -- in fact come to think of it, most people actually refer to me as "that freak" or "that weirdo" so i suppose either "kid" or "mercury" would be an upgrade :)

regarding mp3s: i agree that the mp3 revolution got a rather enormous kickstart from the fact that mp3s made music free. but i like to focus on mp3 business models, as the commercial possibilities (whether its blank CDs or digital music for sale) are what will really allow the technology to go far and wide, and really scare the incumbent music industry.

regarding blogger: i'm not saying blogger disrupted the blogging market; i'm saying blogger was the primary catalyst that allowed *blogging* to be disruptive, because it reduced the cost -- not only in terms of $$$, but also in terms of learning curve and time -- of publishing on the web. blogger's more or less built-in integration with adsense also facilitated the monetization of blogging, which made blogging even more potentially disruptive. so i see blogger as a key force in the disruption that is blogging.

regarding google: i do think google disrupted the portal market, because search is what has partially displaced portals (of course MSN and Yahoo are still big threats, but they now have to pay attention to Google and search, because many users use search as their starting point to the web). pre-Google, search was thought of as not particularly lucrative, and the dominant strategy was to focus on keeping the user on your site. the incumbent, namely Yahoo, was not built to monetize search, and so, as incumbents typically do, they outsourced search to google , and essentially ran away from the opportunity. in this way, google's search has many of the characteristics of being disruptive.