It’s hard to find a hotter business buzzword than disruption.
The theory, made popular by Harvard Business School professor Clayton Christensen, refers to a strategy that scrappy, young companies use to topple giant firms, like Netflix did to Blockbuster or Microsoft did to IBM back in the day. It’s now bandied about so often by aspiring entrepreneurs that it’s become a cliche used to describe almost any effort to alter or improve a business.
And it’s not a very helpful one, says PayPal founder-turned-mega-VC Peter Thiel. In his new book “Zero to One,” he explains why fixating on disruption dupes entrepreneurs:
The concept [of disruption] was coined to describe threats to incumbent companies, so startups’ obsession with disruption means they see themselves through older firms’ eyes…
But if you truly want to make something new, the act of creation is far more important than the old industries that might not like what you create.
Indeed, if your company can be summed up by its opposition to already existing firms, it can’t be completely new and it’s probably not going to become a monopoly.
Why is this important? Because for Thiel, the only way a startup can be sustainably successful is if it totally owns a category, like Google did with search (and continues to do so, with a full 67% of the global search market).
“Monopolists can afford to think about things other than making money,” he says. “Non-monopolists can’t.”
Since Google dominates search — with competitors Microsoft and Yahoo lagging at 18% and 11% marketshare in the space — it can afford to actually take care of its people, Thiel says.
To Thiel’s point, Larry Page and Sergey Brin didn’t set out to “disrupt” the Yellow Pages; they just made the best search engine the world’s ever seen, arguably establishing a monopoly in search.
“Monopoly is the condition of every successful business,” Thiel writes. Not disruption.
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