“Disruptive innovation” is a term first coined by Dr. Clayton M. Christensen, a professor of Business Administration at the Harvard Business School. Dr. Christensen writes about the concept in his book An Innovator’s Dilemma.
Dr. Christensen defines disruptive innovation as “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”
Some classic examples include: the personal computer’s replacement of mainframe and mini computers, the cellular phone’s replacement of landlines, discount retailers’ replacement of department stores and retail medical clinics’ replacement of traditional doctor’s offices.
Disruptive innovations create room in the market by going after the least-valued and most-ignored customers. This is the opposite of “sustaining innovations” which target the best customers by offering better products for a higher profit. Although disruptive innovations initially lag behind in their appeal, their affordability gives them a foothold in the market. With time, disruptive technologies improve and eventually overtake the “heavy weight” companies in the market. This is how disruptive innovation disrupts the system with their solution.