Market disruption

Blake Doyle
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Through our economic history there are moments of transformation where an event, product or process disrupts current business models and turns a market on its head.

The Gutenberg printing press in Germany, the industrial revolution in England, Henry Ford’s mass production model in the U.S.; these were all transformative events. But the rate and volume of disruption is increasing, and at exponential rates.

In our lifetime we have seen entire industries decline and new ones emerge. Much of these transformations can be attributed to the birth of the Internet in the 1980’s and Tim Berners-Lee’s development of the World Wide Web.

We have been witness to the demise of traditional photography and the rise of digital images, lived through e-mail’s impact on postage mail, and social media’s disruption to traditional methods of reporting and journalism.

In the late ‘90’s I presented on the impacts of e-commerce to a group of business owners. I remember a blasphemous statement that upset a traditional computer manufacturer — I suggested that Dell’s innovative approach to mass customization would disrupt the current reseller market.

Some companies adapt to change, others fight the fate of natural selection. Local examples of industries that have thus far resisted disintermediation include travel and real estate brokerage. Both have resisted pressures through strong customer commitment, adapting to change and enjoyed committed local clients.

Today the industry of auto retailing is again under pressure of transformative change. Automotive start-up Tesla is the catalyst of this disruption.

Started by serial entrepreneur Elon Musk (whose mother is Canadian), Tesla manufacture electric automobiles and an innovative rechargeable battery technology. Tesla is a current market darling and has captured the ire of the U.S. auto dealers’ association due to the distribution methods.

Tesla’s model is to sell directly to consumers. Cars are ordered and customized online, then delivered when available. Mass customization of automobiles has long been prophesized but unachievable due to the existing supply chain infrastructure. This is not an encumbrance to a new age start-up.

Retail has transformed. Customers often know more about a product than sales people, information is accessible and purchasing is shifting to online. Big box retailers acknowledge their “stores” are really just showrooms where products are tested and purchased off site. (Best-Buy, Apple, etc). This is Tesla’s market strategy.

As a start-up, there are production and scale challenges to overcome, but the threat is real and the sector will have to adapt to survive. Tesla may not be the final threat, but it is the first.

Traditional models are changing. The issue and opportunity for Island businesses is to perceive inevitable disruption and adapt more quickly than competitors. In many sectors, including local real estate, travel and auto sales, the competitor is no longer across the street, they can be across the globe. But our markets are also no longer our back yards.

Our economic leaders need to find ways to exploit opportunities as markets transform. We are small, adaptive and entrepreneurial. Our entrepreneurs are well poised to take advantage of the change we know is coming.

Blake Doyle is The Guardian’s small business columnist. He can be reached at

Organizations: Apple

Geographic location: U.S., Germany, England Iceland

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