Disruptive Innovation – what is it & how start-ups can adopt it
The theory of disruptive innovation was introduced by Clayton Christensen, more than thirty years ago. This theory refers to innovation that creates a new market while disrupting or displacing an existing market. It is a process wherein a product or service begins at the bottom of the market and steadily moves up market, eventually displacing established market leaders, competitors and products.
The theory of disruptive innovation is a powerful tool for entrepreneurs and start-ups and needs to be incorporated as a part of their business strategies so as to secure competitive advantage and drive sustainable growth.
For a new entrant to successfully challenge an established company’s business, the needs of the market’s lower segment have to be surveyed and analysed. Most established companies concentrate on the higher tiers of the market, which have been profitable segments for them. These companies focus on improving their products and services by continuous innovation attempting to fulfil the demands of their most profitable customers and land up upgrading their products faster than their customer’s needs evolve. These sustaining innovations result in developing products that are too sophisticated, complicated and very expensive and remain accessible only to the elite customers or to the top, yet smaller segment of the market. While serving these demands, the company tends to ignore the needs of the others or the larger segment of the market.
This is the segment where the start-ups need to focus on. By successfully targeting these overlooked segments and delivering quality products that are suitably functional yet inexpensive, the new entrants are able to gain a strong foothold in the market. Once ready to deliver more, they can move upmarket and tend to the more demanding segment, while preserving their initial customers. Although it may take a little longer to become popular in the top segment, once the product clicks, it won’t take long for the start-up to flourish and eventually deliver higher profits. With persuasion, innovation and quality maintenance, success of the start-up is guaranteed. The transition of the mainstream customers from an established company to adopting the new entrant’s product and services is the result of a successful attempt of disruptive innovation.
With a population of over 1.342 billion and increasing by the second, a country such as India should be medically sound and financially stable but unfortunately it is just the opposite. With a heavily rising population, the rise in communicable diseases is apparent and with unstable financial conditions, rising ‘lifestyle’ diseases is common. With the country’s existing infrastructure, catering to the growing healthcare demands is difficult. A majority of the Indian population is living below the poverty line and depends on the under-financed and short-staffed public sector for its healthcare needs.
The private sector dominates the healthcare industry across India with a majority of healthcare professionals concentrated around urban areas with high paying consumers while the rural areas remain ignored and their healthcare needs unmet.
Challenges for India’s Healthcare Industry:
1. Population: Being the world’s second-largest populated country with an ever increasing migration – in-between neighbouring countries, across state borders and from rural settlements to urban areas.
2. Infrastructure: Citizens can avail of healthcare services, free treatment and medication at government hospitals but the facilities are not up to mark, are under-staffed and under-financed which forces patients to visit private hospitals and medical practitioners. India’s existing infrastructure is not enough to meet the healthcare needs of a growing country.
3. Insurance: According to the data from Insurance Regulatory and Development Authority, 76% of Indians do not have a health insurance. The Indian Government’s contribution towards insurance stands at 32% as opposed to 83.5% in the UK. Also, India’s healthcare expenditures are one of the lowest in the world.
For the eyes of an entrepreneur, these challenges shall come as opportunities, in fact the present Indian healthcare industry presents numerous openings and untapped opportunities. The lack of trained medical resource and insufficient infrastructure in the public health domain are enough reasons to stir an entrepreneur’s mind with innovative ideas relating to healthcare solutions which shall help eradicate major voids in services and healthcare delivery across the country.
Entrepreneurs who aspire to make a difference can survey the rural areas and evaluate the extent to which our countrymen are deprived of medical aid and aim to set up hospitals in smaller towns and villages which are designed to operate at minimalist costs.
Entrepreneurs who can invest may work towards developing low-cost solutions for healthcare such as, diagnostic kits for rural households, cheaper surgery options, low-cost dialysis technology, and low-cost pathological laboratory, etc. thereby accelerating the country’s social and economic growth by making quality healthcare facilities available to the below average income group. Entrepreneurs must ensure that the work towards developing low-cost solutions for healthcare does not compromise with the quality of healthcare service delivered.
Telemedicine and remote care is a boon in rural India since it provides access to doctors to a large population of under-served people. Developing a telemedicine centre for every district hospital will not only reduce the burden on one hospital but also reduce the patient’s number visits to the hospital. Telemedicine ensures that a large number of remotely placed people are cared for minor health issues without the need to visit the district hospital, which may be way too far to reach. While minor medical cases can be treated over the phone, the ones that are more serious can be called for personal examination and further treatment.
The digital boom and internet penetration is a huge opportunity for growth of healthcare services. Owing to new technology, innovative solutions aimed to provide quick, reliable and effective medical facilities in the rural areas can be developed enhancing communication between doctors and patients. The increase in internet and data usage makes way for innovative mobile applications and e-health portals such as blood bank services and online pharmacies.
Emergency medicine and healthcare is an excellent opportunity for innovation. Entrepreneurs may invest in developing very well equipped ambulance services ready for critical intervention. Employing doctors, nurses and paramedics trained in emergency response techniques is a progressive thought in a country where pre-hospital care is virtually non-existent in rural areas. By launching educational and training departments to prepare resources ready to tackle emergency & trauma and ambulances equipped with critical care units, an entrepreneur shall not only be making a difference by investing but shall be investing for the good of mankind and towards the nation.
Patient care does not end with the patient’s hospital discharge. Most out-patients need treatment once they are back home. Entrepreneurs can develop centres for Medicare and Medicaid which shall have a home healthcare system in place wherein skilled practitioners can provide care to patients in their homes under the direction of a physician. While assisting the patients to recuperate at home and avoiding hospitalisation, the healthcare services should aim at promoting patients’ optimal level of well-being and helping them in improving their functions so that they can live a life of greater independence and fulfilment. Post-treatment patient care is an important feature in healthcare services where patient safety and quality are important aspects and must be adhered to.
Post the Clinical Establishments Act of 2010, some Indian states have worked towards having a better access to affordable healthcare, it is way lower if compared with other developing countries and knowing that India has a long way to go, increases the plethora of opportunities and innovations. The healthcare sector is emerging as the new sunshine industry which make setting up an entrepreneurship in healthcare an excellent business opportunity.[Top]
Excellence – is the word we strive for. It puts us above everyone else. EDII was awarded ‘Excellent Institute for Entrepreneurship Development in India’ at 11th National Education Summit & Award.
For EDII’s contribution towards developing entrepreneurial ecosystem, CMAI association of India awarded this prestigious award to the institute. Shri Rajesh Kumar Chaturvedi, Chairman CMAI & IAS presented the award to Dr. Sunil Shukla, Director, EDII.[Top]
Reading about great entrepreneurs is super inspiring and motivational yet how far we let its positivity affect us depends on us, the readers. By working on the crucial attributes of one’s personality, under the right guidance, the entrepreneur in you can emerge at any age and stage of life.
However, the best entrepreneurs share a few common characteristics, which are crucial in building and maintaining a successful business structure. While considering the fact that they come from different cultures and upbringing, income brackets, educational levels and a varied lifestyle, we cannot overlook that they all share a few common traits which are not only strong and positive but are the very pillars of their success.
- Tenacity: No matter how hard it gets, successful entrepreneurs have the ability to sustain. Persistence, perseverance and determination are the key ingredients of success.
- Passion: It is a common assumption that the sole purpose of all entrepreneurs is to make maximum profits. That is not true. Most of the entrepreneurs are actually quite passionate about their work. Challenges excite them whereas mistakes make them wiser. Money, although secondary, is not their purpose of business. The purpose is to follow their passion, which is excellence at work. Those who are not fully passionate about their work tend to slack at it and eventually lag behind.
- Risk-taking: Taking risks in business does not necessarily mean financial risks. It could be related to risking one’s reputation or social standing. It could be risking your time and energy while working on a project. Successful entrepreneurs are not scared of taking whatever risks that come their way. Starting a business with limited funding is not an issue for entrepreneurs who aim to be successful and take it up as a challenge but the same might seem to be a major issue for others who keep dwindling upon the pros and cons instead of taking action.
- Focus: Opportunities don’t just come to successful people. They exist all around us and it is up to us to spot them and that’s what makes us successful. All successful entrepreneurs are so focussed on their business that they develop this trait to spot an opportunity that others wouldn’t even dream of. It is this vision that aids the very success of great entrepreneurs.
- The Desire to Learn: Those who stick to the good old ways may last for a while but not beyond that. It is essential to learn new tricks of the trade, keep oneself updated with the latest innovations and follow the latest systems if you wish to be in the race. Education and experience does help us a lot but keeping pace with the industry and evolving along with the latest trends is absolutely necessary. Successful entrepreneurs do all they can to learn and absorb the latest information which helps them to stay ahead of the rest.
- Handling Failures: No success story is written without an eraser. Mistakes do happen but the wise learn from their mistakes and move on. Entrepreneurs who believe in themselves develop enough patience and persistence to rework or renew and deliver better results the next time. These entrepreneurs relate to such valuable experiences in their future as well.
- Money-management Skills: Being one of the most crucial aspects of every business, entrepreneurs need to be exceptionally good at money management. Be it using your own savings or large amounts of funds deposited by the investors, making every penny count is what successful entrepreneurs do. Correct financial decisions, calculated expenses, spending where it is essential and curbing where necessary is a trait all successful entrepreneurs share.
- Business Relationships: Building relationships and maintaining them is important for any business to flourish. Successful entrepreneurs know this very well and take extreme care in maintaining these business contacts because if not now, they shall soon transform from being contacts to becoming clients.
- Salesmanship: Believing in your own product is the first step of successful salesmanship. Every entrepreneur needs to understand that if they believe that their product is good, half the job is done. The other half rests on how they express themselves to the client. Successful entrepreneurs are good at this because if they as creators of the product are unable to explain this well then who will?!
- Planning Expertise: All successful entrepreneurs are excellent in planning strategies. They organise their time, money and efforts well in advance for efficient implementation. Their business strategies are based on thorough researches and surveys that aid the overall success of the business.
Are you the one? If you are, EDII is right institute for you![Top]