How to think like a disruptor
The companies most likely to upset the apple cart have been named in the Disrupt 100. Whether or not it’s an accurate prediction of the future, it’s certainly intriguing reading.
It got me thinking about what it takes to disrupt, or to spot disruption coming.
History provides plenty of examples of big players failing to recognise incoming ‘big external kicks to the market’, as Mark Shayler calls them. In his book Do Disrupt, he names Sony as missing the mp3, Kodak missing digital and Borders missing ebooks. To that list I’d add Schweppes missing flavoured tonic waters. G&T? Mine’s a G & Fever-Tree.
Hindsight’s a wonderful thing. It’s less easy to recognise a great idea that challenges conventional wisdom before it’s changed the game. Everything new seems alien to begin with. The Silicon Valley angel investor Paul Graham initially dismissed Airbnb because ‘no one would want to stay in someone else’s bed’. Having seen the light, he tried to convince VC Fred Wilson to invest. Read the fascinating email trail between them.
A strategic thinking tool we use to consider threats and opportunities (the two sides of disruption) is the PEST. It’s not a new one, but then neither is the concept (in 1896 Henry Ford looked beyond the faster horses the market thought it wanted).
Meat hit the news over the summer when We Work banned it from staff expenses. Cue heated ideological debates about choice and the credentials of plant-based alternatives to meat. But is there a disruptor in the wings?
Let’s take a quick PEST-style look at whether the stars are aligning for the would-be disruptor at no7 on the list: Memphis Meats. It’s one of a number of biotechs producing ‘cultured meat’ – grown from cells in labs – as an alternative to livestock farming.
P is for Political
How to regulate cell-cultured meat is still up for debate, and without that there’s not yet a route to market. But even assuming this is resolved satisfactorily, who would choose a sci-fi style substitute over the genuine article? Except that choice is relative. Here in the UK, a post-Brexit trade deal with the US may bring chlorinated chicken, beef with growth hormones and bacon with banned additives to our table. Suddenly, the new ‘clean meat’, as it’s being described, ‘with all the nutrition and none of the nasties’, sounds a whole lot more appetising.
E is for Economic
What price if supply is to meet growing global demand for meat? Investor Jeremy Coller has described the ‘overreliance’ on factory farmed livestock as ‘a recipe for a financial, social and environmental crisis’. In 2016 he established the Fairr initiative and a 40-strong investor group commanding $1.25trn in assets to help ensure money flows towards addressing what he calls ‘the protein challenge’.
S is for Social and environmental factors
Millennials have grown up with an acute awareness of environmental issues. They don’t like what they see and they are willing to put their money where their mouth is. “As an engineer, I feel compelled to do what I can to have the best possible impact on society”. So says 32 year-old Kyle Vogt, CEO of Cruise Automation, acquired by GM for more than $1 billion. To what end is he putting his talents now? He’s a member of the self-styled ‘Vegan Mafia’, committed to investing in ‘new products that are better than the status quo in every way’.
Technological breakthroughs in producing animal proteins from cells have been enough to convince investors there’s the nugget of something viable here – Memphis Meats raised $17m in Series A funding last year. But some researchers estimate it will be anywhere up to 20 years before consumers get their forks into cultured meat, and the techniques currently still require animal stem cells and serums, so it is not necessarily cruelty free – and that may matter.
This is clearly a massively-oversimplified PEST, but you get the picture. The tool can help you step outside of your usual frame of reference and attempt to take an objective view of a wide range external factors.. Intelligence that can inform a strategy to ride a wave or make new ones.
So will lab-cultured meat become the status quo? Only time will tell, but some of the money thinks it might. Tyson Foods, America’s biggest meat company, invested an undisclosed amount in Memphis Meats recently. Of the investment, the company’s EVP of Corporate Strategy Justin Whitmore is quoted as saying “We don’t want to be disrupted. We want to be part of the disruption”.