What do Cree, Red Hat, Lulu, Ram Development Company, Integrian, Broadwick, Inlet Technologies and DayJet have in common?
At first glance, very little.
Cree is focused on light emitting diodes and semiconductor technology.
Red Hat develops and provides support for Linux software services.
Lulu is all about self-publishing of books, music and other entertainment.
Ram Development is in charge of a $75 million construction project in Chapel Hill.
DayJet plans to provide “air taxi” (small jet) service for executives.
Integrian focuses on mobile video and data capture/archiving.
Inlet is all about compression of video to make it cheaper and simpler to produce.
Broadwick provides e-mail marketing and other services.
At second glance, similarities come clear.
All are run by entrepreneurs, all are technology leaders, and all face larger competitors or imbedded technology and services with large customer bases that are resistant to change.
They are among “The New Disruptors,” a term coined by Business 2.0 magazine. To succeed long term, they must excel at winning customers away from larger, more established, more traditional rivals.
Cree hopes to replace traditional light bulbs and other forms of lighting with new, longer-lasting, more energy efficient LEDs.
Red Hat is displacing proprietary, larger, more established software providers around the world.
Lulu is threatening traditional publishers who have kept a stranglehold on artists.
Ram Development has embraced “green,” or environmentally friendly and energy efficient architecture and construction.
DayJet will battle commuter and larger airlines.
Inlet is seeking to help producers from local TV stations to Hollywood embrace and utilize high definition.
And Broadwick competes in a field that features larger competitors as well as marketers and agencies still wed to traditional means of marketing their messages.
Executives from those firms and several others from around the region gathered at UNC’s kenan-Flagler Business School recently to participate in the launch of a “disruptive technologies” series by Business 2.0.
“I was struck by how varying the companies were,” said Paul Jones, a Web pioneer himself who while not claiming to be a disruptor has disrupted conventional libraries with the massive ibliblio.org collection. “From prosthetics to books to people doing airplanes and construction and lights. I thought there had to be some commonality there.”
While a crew from CNN filmed away, magazine editor Josh Quittner and editor-at-large Erick Schonfeld led an at times spirited discussion about what it meant to be a disruptor regardless of industry of focus – and how to be successful at it.
“There will be some arrows taken,” warned Neal Page, chief executive officer of Inlet Technologies who is a pioneer in video over the Internet and now HDTV compression.
Arrows in the back is quite a common trait for pioneers in any field. Second guessers, doubters, critics and those of little faith in risk taking can aim pretty well – from behind.
After participating in a two-hour discussion at Kenan-Flagler and then sharing drinks and appetizers on the court of the Dean Dome, Page said he was impressed by what he saw and heard from the gathering.
"Intense Visions"
“I was most struck with the pretty intense and variety of intense visions,” he said. “It’s pretty clear that there is a lot of commonality of how disruptors think.”
Common traits include enthusiasm, willingness to take risks, commitment, and inventiveness in technology and or a solution to a problem.
“Disruptors are entrepreneurs,” Page added. “They still have that common spirit of fire.”
Jones laughed when he talked about another trait.
“They are entrepreneurs, and the risk of failure is perfectly fine with them,” he said. “That’s part of what attracted them to what they are doing.”
Bob Young, a co-founder and longtime chairman of Red Hat and now the owner of Lulu, demonstrated the sense of confidence and audacity a successful disruptor needs with one concise phrase”
“The more dominant the player, the bigger the opportunity,” Young said.
Jones picked up on that same point.
“The big thing in common is that you look for a basic standard industry that nobody else will go in to, but you do in some creative way to steal a segment of it,” he said.
Each of the attendees represented companies at different stages of development as well as focus. Giant IBM attended, as did rapidly growing ChannelAdvisor and startup Tackle Design. Sonecast, which is still in stealth mode, made the invitee list, too.
Avoiding the “Deadly Pitfalls”
A PowerPoint slide listing the “Eight Deadly Pitfalls” for disruptors – complete with a “danger of death” road sign depicting a human body being hit by a lightning bolt – certainly drew the group’s collective attention.
Jones called them the collective business equivalent of the “Seven Deadly Sins.”
The Business 2.0 list warns against:
• Trying to win the incumbent’s game
• Targeting large, juicy segments
• Betting the farm on a ‘sure thing’
• Focus on ‘educating’ customer
• Trying to change consumer behavior
• Favoring fast growth ahead of profit
• Losing money on early adopters
• Saddling the disruptive idea with the business processes & cost structure of an established supplier
Ryan Allis, the chief executive officer and co-founder of Broadwick who launched the firm while still a teenager along with chairman Aaron Houghton, said successful disruptors must also “learn how to create markets. Sometimes that involves risk.”
He and friend Jud Bowman, who founded Pinpoint and worked in mobile data space when there were few mobile devices, posed for a photo in from of a “New Disruptors” sign. Bowman, now a top executive at Motricity, is like Houghton helping create a market. His focus is mobile data and content.
When not shooting baskets, Bowman spent some intense face time with disruptor veterans Young and Pat Garner. Garner, now an executive in residence at Kenan-Flagler. Garner once ran Motley Fool, an icon of the “dot com” boom.
Allis, Houghton and Bowman at age 20-something represent the emerging disruptors, while Young, Garner and other seasoned veterans at the event are far, far from retirement.
That diversity in age appealed to the appeal of the crowd, said David Sink, program director of emerging technologies for the solutions and strategies division of IBM’s software group.
He talked about successful disruptors building teams mixed with experienced leaders and those young or inexperienced enough not to know that failure is an option.
“Successful disruptors are a lot like those young teams from UNC that won national championships,” Sink said. “They were a blend of youth and experience, freshmen and seniors, freshmen who didn’t know that they weren’t supposed to be where they were and veterans who had the confidence and leadership to get them there.”
Jud Bowman, who helped launch a company as a teenager while attended the North Carolina School of Science and Math in Durham that now is part of Motricity, said he has hopes that company will be as disruptive to mobile content as Red Hat and Young have been.
“He’s such an energetic and creative guy,” Bowman said of Young. “His first employee at Red Hat, Erik Troan (original VP of Engineering at Red Hat), was on our advisory board when we first got started, he had also graduated from the N.C. School of Science & Math.
“I have an amazing amount of respect for what Bob built,” he added. “I think Red Hat is one of the most successful companies to ever come from NC, and as I told Bob that night I just hope that Motricity will one day be seen in the same league as companies like Red Hat and SAS here in the triangle!”