Two Disruptive Catalysts Small Business Doesn’t See Coming


If you’re a small business, you should know there are clever people in not so far away places working against you, day and night. And if they have their way, they will upend your business and your life, entirely. Just the thought of it, makes them cackle with glee.

Ok, the last part isn’t true, but the rest of it sure is. All over the nation, heck all over the globe, innovators are coming up with new ideas that promise (or threaten depending on your point of view) to change the way you live and do business.

The trend has blossomed into such an important catalyst for business that people such as Baruch Professor Scott Newbert watch developments closely.

They call the phenomenon disruption, which is loosely defined as a development that displaces an existing market, industry, or technology and produces something new and more efficient and worthwhile. Disruption is typically both destructive and creative.

Disruption: A “Small” Challenge

“The impact on small business is of particular interest to me,” Newbert said, who explained that smaller firms are more likely to be harmed because most don’t have the cash to bet on a wide range of scenarios.  “And make no mistake, it’s a bet,” he added. “Nobody knows what the future holds let alone the best way to invest in it.”

If the migration from ‘brick and mortar’ to e-commerce is any indication of small business’ ability to navigate disruption, more than a little assistance is needed.

Forrester predicts that online sales will account for 17% of all US retail sales by 2022, however, a little over half of small businesses have a presence on the Internet today. That means about 1 out of every 2 small businesses will miss out entirely.

“And e-commerce is not a disruptive trend of the future, it’s here now,” added marketing consultant Brian Carter, who assists small businesses facing disruption related challenges.

Carter is currently working with owners of retail stores. “Many are selling something that can also be bought on Amazon, for less and from home,” he explained. “That’s a very serious consequence from disruption.”

Disruption in History

Disruption is nothing new. The locomotive disrupted canal travel in the 19th century, which, for hundreds of years prior, had been a very popular way to transport goods. In the early 20th century, the electric light turned the kerosene industry on its ear.

Now, as then, disruption begins with an alternative that’s more efficient or more appealing. For example, Apple disrupted the music industry with the iPod and iTunes by making songs instantly available and less expensive.

“Uber disrupted travel because taking cabs wasn’t a great experience for most of us,” explained Carter.” We took cabs because we had to, but when a better option came along, the cab industry found out how their customers really felt.”

Disruption Looming

It’s always very difficult to know what’s lurking on the horizon, however, many trend watchers including the analytics giant Deloitte note that AI or Artificial Intelligence appears poised to become a seriously disruptive technology in the not so distance future.

Loosely defined as machine simulated intelligence, “Within the next three to five years, we expect there will be an exponential increase in the number of commercial AI-based applications,” writes Deloitte.

“This trend won’t slow,” added Newbert, who recommends small businesses stay abreast of developments. He’s particularly focused on the robotics aspect of AI. “Keep an eye on machines that can do things that people used to do.” That kind of technology can change the game.

Although the tech sector is often monitored closely for trends, disruption can come from anywhere and Newbert thinks the most overlooked disruptor currently threatening entrepreneurs is the tax legislation before Congress.

Politics aside, Newbert said the changes may be sweeping and the tax code is already complex. The Small Business Association echoed a similar idea in an email response to a question asking about the most serious challenges facing small business.

“For a very small firm or an individual that’s in business for him or herself, changes in the tax law could be huge.” Newbert said.

Disruption Survival

Although the sources of disruption may be too numerous to count, Brian Carter believes that the strategy for counterbalancing the impact may be almost singular.

“At the core of disruption is customer dissatisfaction,” he said. “Nothing is more important than satisfying your customer.”

When he meets clients one of the first things he evaluates is whether a firm is losing a significant amount of business, “If someone else can out-satisfy your customer, you’re in trouble,” he said.  Conversely, if a small business is able to generate high levels of customer satisfaction consistently, Carter says disruption poses far less of a risk.

Scott Newbert agrees. “Disruption is among the most powerful forces facing business of all sizes,” he said. And it can’t be avoided. But if you stay up to date with trends and make sure customer satisfaction is extremely high, you’ve got a good chance of coming out on top.


Two Disruptive Catalysts Small Business Doesn’t See Coming

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