View: Why companies should stop seeing disruptive innovation through the lens of failure (2024)

“Our virtues and our failings are inseparable, like force and matter. When they separate, man is no more.”
– Nikola Tesla

Disruptive innovations happen when companies, oftentimes with meagre resources, challenge established norms, and (finally) succeed. There are numerous examples in history that show how disruptive innovators, unafraid of failures, confidently went ahead with an idea they firmly believed in, and changed the future. Did they taste success in their first attempt? No! And did failure stop them? Again, the answer is No.

Innovation is an inseparable part of evolution. Most products / processes adopt the safer approach of “sustaining” innovation. Disruptive innovations, as defined by Prof Clayton Christensen, are those that entirely transform the existing market with a product or solution that matches unmet needs, at either reduced cost or in a new geography. They subsequently move up the value chain by offering new products and becoming more appealing than big, incumbent competitors.

Elon Musk - founder of PayPal, SpaceX, Tesla - is arguably the leading innovator in the world. He had a string of failures in each of his companies, including hitting bankruptcy and being booted out of office. At Tesla, his early vehicle, the Roadster, which was built on the Lotus platform, underwent numerous failures and recalls. Years later, in his own speech during a Shareholders Meeting, Musk admitted that it "was completely unsafe", it "broke down all the time" and it "didn't really work". The idea of a sturdy, long range EV was great. However, when it was released, the technology was not perfect, the market was uncertain and the price was beyond comprehension. But it never stopped the company from going ahead because failures are bound to happen whenever there is disruptive innovation. Case in point: From 2012 – 2020, there has been approximately one Tesla vehicle fire for every 205 million miles travelled. By comparison, data from the National Fire Protection Association (NFPA) and the US Department of Transportation shows that in the United States there is a fossil-fuel vehicle fire for every 19 million miles travelled! So which would you consider a safer bet now?

Traditionally, most disruptive innovations are not welcomed by the market as they come with high-risk of failures as compared to incremental sustaining innovations. Since they chart unexplored paths, their early performance is comparatively lower than what is offered in the mainstream market. For example, transistor radios initially had poor sound quality compared to the existing analog radios but as they were smaller / portable, and could operate on batteries, they carved a niche for themselves and became popular among students and workers who needed a handy device for entertainment and news. Similarly, Netflix, which is one of the best examples of disruptive innovations, started making profit in 2003, after many years of struggling with their business model and underlying technologies.

Fear is the biggest rival of innovation. We say bye-bye to innovation, the day we decide to play safe. Disruptive innovation is risky, the stakes are high and the odds are stacked in favour of failures (that no one desires). No big business is untouched with it and no one has had a perfect “first” release: Microsoft Windows 95 crashed when Bill Gates was giving its demo for the first time and Tesla’s bullet proof glass shattered when Elon Musk hit it with a hammer, on stage in front of thousands of people. Similarly, early renditions of the CD players were susceptible to vibration and unable to detect disks; the hard disks of portable computers crashed frequently and songs were erased from the early MP3 players. Each of these went on to become product categories worth billions of dollars.

Disruptive innovators have always had to go against the tide before finally making a mark. What is important to note here is that all these disruptors were busy experimenting with their ideas while others followed the safe path. The latter were finally defeated by these innovators. A suitable example from the transportation sector would be from the early 1900s, when businesses were busy looking for faster horses to fulfil the demands of people. Henry Ford tried a novel approach. And when he finally succeeded with scale manufacturing of his automobile and engine design, Ford Model-T completely disrupted the whole industry (for more than a century)!

In India, the EV industry has had its share of debacles. Reva, introduced commercially in 2001, was a true embodiment of innovation but was unable to “cross the chasm” (in the words of Geoffrey Moore). To some extent the other early EVs were low-quality 2-wheeled imports from abroad. They suffered both from driving range and product quality issues. A true disruptor would be the eRickshaw, introduced in various states of India about a decade back, and today over 1.5 million are on the road, creating jobs for millions. Good or bad, these baby steps reaffirmed faith in EVs, and sustaining (some “jugaad”) innovations continued. Disruptive innovations in the sector happened in the last 5-7 years where new motors, electronics and battery packs were designed and manufactured in India, for India. Altigreen, as one such innovator, has 26 global patents granted to it, and manufactures electric delivery vans that compete in price and performance with their fossil-fuel counterparts.

If you see this newer landscape, not only are these rugged EVs better for the environment, they allow owners a fatigue-free drive, with increased earnings for the family! Some breakdowns will happen in the short term, possibly even battery fires (recent 2-wheeler videos). But it should not deter the extent of innovations, as is evident from all industries – small gadgets to large aircrafts.

Disruptive innovators are not afraid of failures because they know that experimentation is the key to innovation. As long as their endeavours are serious and safety is not deliberately compromised, it must be accepted that not all innovations will become successful businesses but they should not be termed failures, far from being considered disasters in the making. Afterall, in the words of Curtv Richardson - “Failure is a part of innovation, perhaps the most important part”.