Podcast: Business, Disruption and Technology

Harvard professor Thales Teixeira explains why customer behavior, not technology, ultimately drives disruption.

The emergence of a new technology is often cited as what drives the disruption of an industry or business. But that’s not true in most cases, according to Harvard Business School professor Thales Teixeira. Instead, startups disrupt established companies by decoupling the customer value chain — picking one aspect of the business and doing it better than the incumbent.

His findings, based on eight years of researching startups, tech companies and incumbents, are explained in his new book, Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption. Teixeira joined the Knowledge@Wharton show on SiriusXM to talk about his book. (Listen to the podcast at the top of this page.)

An edited transcript of the conversation follows.
Knowledge@Wharton: Why do we believe that technology has enabled so much disruption in business?

Thales Teixeira: Pure and simple, because it is sexy and interesting to hear about new technologies. The media fuels all of our needs for figuring out what are the new tools and new technologies, and it just creates momentum in the market. The companies are developing these things, so there are a lot of PR agents out there. We do have a few very prototypical examples of actual technologies being game changers. The mobile phone is one of them.

I visited many startups, and I also visited the incumbents that said they were being disrupted by these startups. I started realizing that there are very few technologies that are really game changers and disruptors in that sense. In the vast majority of the cases, these startups have the same technologies as the incumbents that they are fighting. So, this idea that technology is disrupting markets is not really [true in] the majority of the cases.

Knowledge@Wharton: Can you explain this idea of decoupling? .... "