When most people hear the word “innovation,” they think of the next shiny product launch or high-tech gadget. But real disruption—the kind that shakes industries and creates entirely new categories—often starts much smaller and much humbler. It’s not about being flashy. It’s about transforming something expensive and complex into something that’s affordable and accessible.
That’s the essence of disruptive innovation.
Coined by Clayton Christensen, disruptive innovation refers to products or services that start in an overlooked niche and eventually upend established players by offering a simpler, more affordable solution. It doesn’t begin by competing head-to-head with the dominant giants. Instead, it sneaks in through the side door, captures the low end of the market, and then gradually moves upstream.
Let’s bring this to life with a couple of examples.
Mini-Mills: Small Players That Melted the Giants
For decades, primary steel manufacturers like those built by Andrew Carnegie dominated the industry. These plants were massive and expensive to build. They used raw materials and complex blast furnaces to produce high-quality steel. Naturally, this created a high barrier to entry for new players.
Then came the mini-mills.
Mini-mills didn’t try to build the same infrastructure. Instead, they took steel scrap—a much cheaper raw material—and melted it down in electric arc furnaces. At first, they only made low-quality products like rebar. But over time, their efficiency and affordability allowed them to improve their processes and move up the value chain, eventually producing higher-grade steel.
By the time the big players realized what was happening, mini-mills had captured a significant portion of the market and fundamentally changed the economics of steel production.
Amazon: From Books to Everything
Amazon began its journey in 1995 as an online bookstore. At the time, the big competitors were physical retailers like Barnes & Noble. Amazon didn’t try to open a chain of stores. Instead, it capitalized on the emerging power of the internet to create a digital-only experience.
Once it dominated the book market—thanks to better selection, lower prices, and the convenience of online shopping—it didn’t stop. It added CDs and DVDs. Then household goods. Then electronics. Now, Amazon is a marketplace for nearly everything.
It didn’t compete with Walmart head-on from day one. It grew from a low-margin, high-volume model and used its scale, infrastructure, and customer loyalty to expand.
Disruptive Innovation as a Business Strategy
If you’re looking to build a business, you might be tempted to chase a big, profitable market. That’s understandable—but it’s risky. Established players have deep pockets, loyal customers, and refined systems. Competing with them directly can be a losing battle.
Instead, consider a different strategy:
Find a high-margin, low-volume industry that’s ripe for disruption.
Create a simpler, cheaper alternative for an underserved segment.
Focus on one narrow niche, and dominate it completely.
Use your profits and learnings to expand upward and outward.
This playbook works because you’re not trying to beat the incumbents at their own game—you’re changing the rules entirely.
Why It Works: Low-End Entry, High-End Ambition
Disruptive innovations usually begin at the low end of the market—serving customers that the big players ignore because they’re not profitable enough. These customers may not need all the bells and whistles. They just need something that works and doesn’t break the bank.
Because disruptive innovators are operating in a blue ocean with less competition, they can iterate quickly, improve their product, and build customer loyalty. As they refine their offerings, they gradually move upmarket, eventually threatening the incumbents who once dismissed them.
The beauty of this model is its scalability. Once you dominate your niche, you can leverage economies of scale and use your customer base as a springboard into more lucrative segments.
Examples in Today’s World
Canva disrupted graphic design by offering an intuitive platform for non-designers at a fraction of the cost of hiring professionals.
Robinhood disrupted stock trading by removing commissions and making investing accessible to the average consumer.
Airbnb disrupted hospitality by offering unique, low-cost accommodations for travelers tired of generic hotels.
Each of these companies started small, but they weren’t thinking small. They were thinking differently.
How You Can Apply This
So how can you leverage disruptive innovation in your own business?
Look for areas where people are underserved—where complexity, cost, or exclusivity keeps them out.
Strip the solution down to its essentials. What can you eliminate or simplify?
Start with a niche. It’s easier to dominate a small pond than to make waves in an ocean.
Think in terms of access and affordability, not flash and features.
Whether you’re launching a startup or reinventing your business, disruptive innovation isn’t about chasing trends—it’s about making smart, strategic moves that the big players overlook.
How can you use the concept of disruptive innovation to dominate your market? What niche can you serve better, cheaper, and faster than anyone else?
