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Product Management: Product Disruptor

What is a Product Disruptor?

A product disruptor is an innovation that represents a change in a product’s direction, business model, or value proposition.

The term is borrowed from industry disruptor. That concept describes an innovation (Uber, for example) that creates a new industry by displacing an existing one (taxicabs). In a similar way, a product disruptor is a shift in the direction of the product so significantly that it alters a product in fundamental ways.

Real-World Examples of Product Disruptors

Office 365

For decades, Microsoft sold its suite of Office productivity software on CD-ROMs. Although it was software, a digital product, Microsoft Office was sold as a physical item users would buy once and install on their computers.

Then the company introduced a major shift in its model. Rather than selling Office as a product, Microsoft began offering the applications on a subscription basis.

In other words, Office went from being a buy-it-once product to a monthly service. That is a product disruptor.

Netflix

When it launched, Netflix offered movies and television shows on DVDs, which customers received and returned by mail.

Because it was the first company to offer this service, Netflix’s original model was an industry disruptor. It disrupted and then displaced the traditional model of customers visiting brick-and-mortar DVD rental stores to borrow and then return movies.

But then Netflix created its own product disruptor: a service for streaming entertainment over the Internet. The company de-emphasized (but still maintains) its DVD service and poured its resources into rebranding itself as a TV-streaming service.

What Makes an Innovation a Product Disruptor?

Product managers often add ideas or changes of direction to their roadmaps. But these adjustments don’t qualify as product disruptors unless they represent a fundamental shift to the current plan.

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Here are a few signals that your innovation could be a true product disruptor.

It alters the business relationship between the product and the customer.

Let’s return to the Office 365 example. Previously, customers had to pay for Microsoft Office up-front, in full. Office 365 changed the product’s relationship with customers, who can now sign up for a monthly-subscription arrangement.

It represents a change in the technology used to deliver the product or service.

Netflix, for example, shifted from renting DVDs by mail to delivering its service over the Internet.

It changes the product’s value proposition.

Instagram began as a location-based app called Burbn, designed to let users check-in at their current locations to let their friends know they were there. But the company’s research found the only popular aspect of the app was its photo-posting feature. So the company introduced a true product disruptor—rebuilding and rebranding the app like Instagram, a photo-based social media platform.

Why do We Care About a Product Disruptor?

An important part of a product manager’s role is to look forward. They need to think ahead and focus on the long-term success of their products. In some cases, this strategic thinking might lead to a plan to disrupt the product in a fundamental way. Here are a few examples:

Adapt to changing technologies or user habits.

Maybe you sell enterprise software, and your main user persona is an on-the-go professional who works for a large company. Now that the skills and technology to develop apps are readily available, you might want to transition your flagship product from a desktop platform to a mobile app.

Simply adding a scaled-down version of your software for mobile devices would constitute an innovation. But if your core product itself remains a desktop solution, this wouldn’t represent a product disruptor.

So, if your product team sees your user base shifting to a primarily mobile work environment, it might be time to reimagine your product as a mobile workflow app.

Leapfrog the competition.

Again, imagine you’re on the product team at an enterprise software maker.

Maybe your competitors all position their solutions as standalone tools—but you see an opportunity to integrate your software with other tools that serve adjacent functions in your users’ daily workflows.

So your team might want to develop an open API platform and encourage other workflow-app makers to connect their tools with yours. This would fundamentally alter your product from a standalone app to a seamless component in your users’ productivity ecosystem.

Protect your product against market challenges or threats.

Let’s return to Netflix. When the company introduced its streaming service, it had created and then became the dominant player— in the still-new DVD-by-mail industry.

But the Netflix product team looked ahead, and they knew their innovative model there didn’t have enough intellectual property or high enough barriers to entry. Any business could replicate the Netflix strategy of buying DVDs from the studios and using the Postal Service to deliver them. In fact, Blockbuster had launched its own DVDs-by-mail service.

In other words, Netflix understood its current product was a slow-melting ice cube.

So the company took the proactive step to disrupt its own model, even though it was still succeeding at the time, and move to Internet streaming.

Product Disruptors Represent a Risk, But Sometimes it’s a Risk Worth Taking

Product managers can introduce innovations that add to a product’s existing plans or value while leaving the fundamental business model in place.

But to introduce a product disruptor—which changes the product fundamentally—the product team must be prepared at least two types of risk. First, that the new strategic direction won’t be successful. And second, that even if it does succeed this disruptive new plan isn’t successful enough to offset the losses from the company’s shift away from its original promise to users.

In other words, product managers need to be careful. They need to do as much research as possible before attempting to disrupt their products. But if a product team spots the types of threats or opportunities we’ve described above, moving ahead with a product disruptor might be worth the risk.