The Most Disruptive Companies In 2012
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By Reuven Gorsht, Vice President, Customer Strategy, SAP
They lurk quietly in neighborhood garages and large offices, concocting wild ideas and rolling out new business models and products that can take entire industries by storm. These companies have big ideas that are driving profound change by challenging the conventional market while making incumbent companies completely re-think their strategies.
Beats Electronics: A musician’s personal promise
Rapper Dr. Dre, recently toppedForbes’ list of highest paid musicians, netting more than $110 million in 2012. But Dre has not released an album in 13 years. How did he get there? Most headphones don’t allow listeners to hear “all” of the music, according to Dre, so he founded Beats Electronics with Interscope/Geffen/A&M chairman Jimmy Iovine and introduced their first set of headphones right in the midst of the financial meltdown in late 2008 flaunting a hefty price tag of more than $300. Beats by Dr. Dre headphones lured customers away from flimsy $20 earbuds with their signature turbocharged bass and sleek design, as well as the musician’s personal promise: Beats would allow people to “hear what the artists hear, and listen to the music the way they should: the way I do.”
with Interscope/Geffen/A&M chairman Jimmy Iovine and introduced their first set of headphones right in the midst of the financial meltdown in late 2008 flaunting a hefty price tag of more than $300. Beats by Dr. Dre headphones lured customers away from flimsy $20 earbuds with their signature turbocharged bass and sleek design, as well as the musician’s personal promise: Beats would allow people to “hear what the artists hear, and listen to the music the way they should: the way I do.”
These headphones were handed to selected athletes at the London Olympics, making a big play for the brand, despite the fact that the IOC prohibits non-official sponsors from advertising around the Olympics.
Dre and Iovine continue to expand their Beats empire, creating a line of boomboxes to go along with their headphones. Beats speakers can now be found in the Chrysler 300, the Dodge Charger and a line of HP laptops.
The Bottom Line
Founded: 2006
First product in market: 2008
Current market share: 51 percent of an estimated $1 billion headphone market
Founded: 2006
First product in market: 2008
Current market share: 51 percent of an estimated $1 billion headphone market
Square: Elegant hardware and software
Everyone is predicting that our phones will soon become our wallets.
Square’s elegant hardware lets users turn their device into a cash register and do business from anywhere. Taxi cab drivers, street vendors, independent store operators and others can plug the device into a smartphone’s speaker jack to easily accept credit card payments.
Earlier this year, Square sealed a deal with Starbucks as an investor, planning to roll out Square to more than 7,000 Starbucks locations.
as an investor, planning to roll out Square to more than 7,000 Starbucks locations.
Starbucks customers will only have to give their name at the cash registry, thanks to Square’s GPS technology. When the customer enters the store with their smartphone, their name and photo will be automatically sent to the cashier’s screen. After matching the name and photo, the cashier will quickly complete the order.
The Bottom Line
Founded: 2009
Valuation: $3.25B
Growth rate: >25 percent per month
Transactions per year: $8 billion
Founded: 2009
Valuation: $3.25B
Growth rate: >25 percent per month
Transactions per year: $8 billion
Kickstarter: Pitch, raise and win
Do you have an idea, but lack funding? Or would you like to test the market before going into mass production?
Disrupting both retail and finance, Kickstarter is changing the way ideas are financed and launched. Before Kickstarter, entrepreneurs had to bootstrap or seek funding before testing the idea in the community. It cost a lot of money and was a very risky process. Kickstarter lets the community validate business concepts in their infancy, sometimes before a prototype is even made. Projects can raise funds and test the market without wasting money creating inventory that wouldn’t sell.
in their infancy, sometimes before a prototype is even made. Projects can raise funds and test the market without wasting money creating inventory that wouldn’t sell.
Kickstarter has helped launch 33,000 ideas, since its inception in 2009, raising nearly half a billion dollars. This was a blowout year for Kickstarter, thanks to notable products such as the Pebble smartwatch and the Ouya gaming console.
smartwatch and the Ouya gaming console.
The Bottom Line
Founded: 2009
Ideas launched: 33,000
Funding raised (for projects): more than $430 million from more than 2.5 million people
Founded: 2009
Ideas launched: 33,000
Funding raised (for projects): more than $430 million from more than 2.5 million people
Gigwalk: A 200,000 people workforce
With nearly 60 percent of employers planning to hire temporary or contract workers this year, combined with widespread device penetration, we are on the verge of an explosion of mobile, virtual and local workers. Gigwalk, which launched last year , lets companies tap into a flexible workforce for simple tasks.
, lets companies tap into a flexible workforce for simple tasks.
Businesses post entry-level “gigs” or jobs that may take just a few minutes at a time, such as snapping a picture of a specific office building, mystery shopping and much more. The gigs are then instantly delivered based on location to more than 200,000 users who have downloaded the Gigwalk app on their smartphone.
Workers have earned as much as $850 per day, according to individuals on Gigwalk’s platform. With companies like eBay, Microsoft and BMW on board, Gigwalk is enabling entirely new possibilities for short-term employment for both individuals and businesses. The company recently signed a deal with Microsoft’s Bing for placing 100,000 photo-capture Gigs in 3,500 cities across the country.
With 47 percent of the US workforce being under 35, Gigwalk and some of its competitors are out to change the temporary employment market. This is especially disruptive to temporary employment agencies that make a living though connecting employers with employees.
The Bottom Line
Founded: 2011
Jobs completed: 190,000
Users: 200,000+
Founded: 2011
Jobs completed: 190,000
Users: 200,000+
Waze: The people-powered GPS you can trust
Instead of making massive investment in physically mapping every street and alleyway, a start-up decided to collect map data from all its users. Waze relies on its 30 million global users, who report traffic incidents and delays in real time. It then provides directions based on that data to find the fastest driving route. The more users contributing data, the more accurate the map. In an industry largely dominated by cash-rich companies, such as Google, Waze has enjoyed a remarkable trajectory to the world’s largest crowdsourced traffic information service. It has 30 million global users, and is growing at an astonishing rate of 2 million users per month.
relies on its 30 million global users, who report traffic incidents and delays in real time. It then provides directions based on that data to find the fastest driving route. The more users contributing data, the more accurate the map. In an industry largely dominated by cash-rich companies, such as Google, Waze has enjoyed a remarkable trajectory to the world’s largest crowdsourced traffic information service. It has 30 million global users, and is growing at an astonishing rate of 2 million users per month.
FEMA and the Whitehouse enlisted help from Waze users to identify which gas stations were in need of fuel in the wake of superstorm Sandy.
from Waze users to identify which gas stations were in need of fuel in the wake of superstorm Sandy.
While revolutionizing the everyday commute, Waze is already monetizing its platform through location and contextual based ads from partners that that want to attract the attention of nearby drivers. With users spending an impressive average of 7.3 hours on Waze every month, these ads will act as virtual billboards.
The Bottom Line
Founded: 2009
Users: 30 million
Growth rate: 2 million users per month
Founded: 2009
Users: 30 million
Growth rate: 2 million users per month
Ouya: Upending the gaming console
Nintendo, Sony and Microsoft still rule the television-based console gaming market, but their console games still depend on expensive productions that command up to $60 per game.Ouya aims to take advantage of a gap in the market by bringing a variety of affordable games and content to living rooms everywhere through its own Android-based and developer-friendly console.
aims to take advantage of a gap in the market by bringing a variety of affordable games and content to living rooms everywhere through its own Android-based and developer-friendly console.
Portable gaming consoles have already been disrupted by the massive proliferation of iPhones, iPads and Android devices. Traditional handheld consoles, such as the Nintendo DS or PlayStation Vita, are experiencingsluggish sales , upended by the $0.99-cent-per-game economy introduced by app stores.
, upended by the $0.99-cent-per-game economy introduced by app stores.
Ouya’s console will be priced at just under $100 and will start shipping this month.
Earlier this year, Ouya ran a record-breaking campaign this year on Kickstarter, raising nearly $8.6M , 2.5m of which came on the campaign’s first day. With its impressive value proposition for both consumers and developers, Ouya is now the second highest earning project in Kickstarter’s history. If the disruption in mobile gaming is any indicator, this space is ripe for new business models and fresh ideas.
, 2.5m of which came on the campaign’s first day. With its impressive value proposition for both consumers and developers, Ouya is now the second highest earning project in Kickstarter’s history. If the disruption in mobile gaming is any indicator, this space is ripe for new business models and fresh ideas.
The Bottom Line
Founded: 2012
Confirmed Ouya Games: 19
Raised: $8.6 million
Founded: 2012
Confirmed Ouya Games: 19
Raised: $8.6 million
Gumroad: Sell to your followers
If you want to sell merchandise or content online, you likely have to concede to hefty commissions charged by mega commerce networks such as Amazon or iTunes. But what if you already have loyal followers and fans on your own and don’t necessarily need to get exposure through costly distribution channels?
Gumroad allows anyone to monetize their social networks by selling directly to their social connections. Instead of having to set up your own eCommerce site or use an existing market that takes a substantial commission, Gumroad offers a streamlined way to sell.
allows anyone to monetize their social networks by selling directly to their social connections. Instead of having to set up your own eCommerce site or use an existing market that takes a substantial commission, Gumroad offers a streamlined way to sell.
Gumroad removes all of the hurdles typically associated with online commerce, such as account creation, shopping carts and billing address, and provides a unique link for products that can turn into an impulse buy. Gumroad creates a much more fluid transaction and better conversion for sellers, and aims to essentially democratize selling things online.
The Bottom Line
Founded: 2011
Raised: $8.1 million
Founded: 2011
Raised: $8.1 million
Spotify: Your music in the cloud
Worldwide revenue for the recording industry peaked in 1999 at $27 billion, plummeting to $14 billion by 2008. Record companies that once ruled the music industry now share a hefty part of their revenues with Apple’s popular music delivery service, iTunes.
Enter Spotify, a Swedish start-up that allows users to stream and listen to millions of songs instantly. This removes the need to download files beforehand or pay for songs and keep them forever.
Spotify entered the U.S market in 2011 and has experienced explosive growth in recent months. It has already dominated Europe’s online music market, having served more than 13 billion songs in its first year. Worldwide, the service boasts about 15 million users, 4 million of whom pay $10 a month for premium service.
The Bottom Line
Founded: 2008
Users: 15 million
Valuation: $4 billion
Founded: 2008
Users: 15 million
Valuation: $4 billion
Wal-Mart: A 50-year-old start-up
Wal-Mart is arguably the world’s biggest start-up, or at least it’s acting like one.
With 2011 revenue of $419 billion, Wal-Mart dwarfed Amazon’s 2011 sales of $48 billion, yet the giant is working hard to transform itself to an online leader by embracing a social, mobile and start-up mentality. The company is making significant investments in hiring high-tech talent and acquiring start-ups. Its 2011 acquisition of search and analytics specialist Kosmix was the cornerstone to WalmartLabs, which has already helped Walmart.com revamp its search engine and realize an increase of as much as 15 percent better conversion from visitors to buyers on Walmart.com.
WalmartLabs has also created projects that just get customers to think differently about Wal-Mart and e-commerce, including Get on the Shelf , an online contest for people to submit their own inventions to go on sale at Walmart. The contest garnered more than 4,000 submissions, more than 1 million votes and news hits in small towns across America. Then there’s the subscription service Goodies . Wal-Mart customers pay $7 a month for home delivery of a gourmet food box, creating a discerning test market for the retailer in the process.
, an online contest for people to submit their own inventions to go on sale at Walmart. The contest garnered more than 4,000 submissions, more than 1 million votes and news hits in small towns across America. Then there’s the subscription service Goodies . Wal-Mart customers pay $7 a month for home delivery of a gourmet food box, creating a discerning test market for the retailer in the process.
By themselves, none of these initiatives will single-handedly boost Wal-Mart’s e-commerce business. Taken together, though, they showcase a new dynamism at the retailing giant. One that is set to disrupt competitors and even Wal-Mart’s core brick-and-mortar business.
The Bottom Line
Founded: 1962
Annual revenue: $419 billion
Total number of customers per week: 100 million
Founded: 1962
Annual revenue: $419 billion
Total number of customers per week: 100 million
None of these examples introduce earth-shattering technological breakthroughs. These companies found the innovation levers that most of their competitors have either overlooked or ignored, creating new opportunities and experiences around them. These companies saw an unsatisfied need, a hidden power, an unused asset and, above all, an opportunity to innovate. They joined the game with that secret weapon in their pocket, not only aiming to win, but also planning to change.
Whichever industry you’re in, there is a disruptor in the making. Keep an eye out, because the rules of the game are changing quickly and quietly. Will you be the disruptor, the follower or the one forced to leave the game?
