This morning I picked up a bone fide physical newspaper. Black lettering and splashes of colour adorning sheets of grainy, off-white, newsprint - that unique blend of paper pulp hailing from Nova Scotia. The sheets gave off a distinctive crinkle sound as I held them and the smell was pure nostalgia for Sunday morning runs to the local convenience store.
I sat back, my phone face down on the table, and turned the pages. Totally at ease.
Rather than accessing some cognitive superordinate realm of information via my obsidian mirror I gathered my news of the day from a living document that was a part of the space and shared a table with the patrons just like I did. Maybe earlier someone else had picked it up and also riffled through it just the same.
I read one article and then another. The second selected not because the headline grabbed my attention but because I could tell it was a little shorter and I knew the person I was meeting would arrive soon. In honesty, journalism did not leave me feeling particularly informed but I can think of much worse ways to have whiled away a few minutes
You don’t see many papers now because they’ve been disrupted by the cornucopia of fully digital news sources online. Such a development seems common sense to us today but that wasn’t always so.
The business lore of “disruption” as the engine of success became popular during the rise of the big, post-financial crisis, Silicon Valley companies like Airbnb and Uber1. But the idea was developed in the late 1990s by Clayton Christensen, most famously in The Innovator’s Dilemma.
Christensen observed that despite the resources at their disposal incumbent companies face intense competition. Upstarts without any of the equivalent advantages of scale seem to be able to consistently create new products that allow them to unseat existing players.
There are many potential reasons for this process. Most importantly perhaps the upstarts are willing to pursue business models that are unattractive to the incumbents. Almost by definition, the incumbents have a relatively healthy profit margin. If a new way of doing business comes along that can’t produce the same kind of margin but does compete with the existing profit stream there is a pretty strong incentive to protect what you have rather than go down the alternative path.
The interesting thing though is that for Christensen the term was neutral. It was an observation not a mandate. He simply saw that certain patterns repeated and put a name to it. Based on his further writings he seemed to be just as happy for this insight to lead to smarter, more resilient, corporations as he was for it to embolden garage entrepreneurs. Yet, especially in tech, the idea of disruption morphed into a rallying cry for a whole generation of ambitious entrepreneurs and young starters. For this group disruption seemed to be the only path to an ever improved economy, and eventually society. Out with the old and in with the new.
Unfortunately, the truth is that disruption is disruptive. When an incumbent is unseated everything that came with it goes too. Every business, institution, cultural norm etc. has some unique properties that cannot be replaced. It may be that their replacements have some edge that combined with improvements or similarities along other dimensions allows them to be a better substitute for the old ways of doing things. This is a good thing! But, it doesn’t mean that nothing is lost.
When Uber took on the taxi industry it was a stagnant, nasty business, practicing extreme regulatory capture2. Drivers would have to take on huge financial burdens to get a chance to operate a taxi and apart from the introduction of the motor vehicle the customer experience had barely changed since the first hackney-carriage licences were issued in 1662.
Yet at the same time, taxis were built en masse for the cities they operated and they needed to be instantly recognisable by anyone in the street. As a result they became a wonderful platform for the expression of local culture3.
Personally, I think Uber is way better than what we had before. The customer experience remains a serious improvement, despite increased wait times, and it truly democratised a kind of employment that millions now use to earn everyday. Nonetheless, the fact remains that we have lost, or at the very least are losing, the things that were special about taxis.
The world is path dependent. Every action moves us from potentiality to actuality. The potentiality increases as we expand into the adjacent possible. Yet, the path we took to get there is unique and utterly irreplaceable.
With disruption you may gain something new, and as a whole the process seems to be desirable. Nonetheless you can’t disrupt without losing something peculiar to the thing you are disrupting. The question is how valuable are those peculiar aspects and what would it take to avoid losing it?
I would be interested to know what would have happened if the taxicab companies had decided they wanted to put up a fight. Is it inconceivable that at a city level they could have organised to develop an app while leveraging the advantages of their existing fleet of drivers/cars, relationships with local merchants, and amazing branding to create a compelling alternative or at least find a niche that would let them continue to thrive in another form? Are the network effects across cities really that strong?
In this case I don’t think we will ever really know. It seems like most taxi organisations chose to double down on the regulatory angle instead. Of course, this strategy may have helped a little in the short run but it’s not a long-term winning solution.
Whether it is with our companies, our politics4, or our personal lives we have come to admire disruption as the default and best process for improvement. The truth is much more complicated. Our lives are structured around unique institutions and organisations that would be impossible to replace without losing something unique. If we value those things we should spend a little less time thinking about how to disrupt them and a little more time trying to understand how to renovate and keep them fresh.
Mood
Links
Yamagami Tetsuya’s Revenge
Shinzo Abe received many moving eulogies after he was killed in July of last year. This article explores another side of the story. It’s an incredible tale of a state and a political party intertwined with a series of new religious movement and the long-term impacts of this deal.
Taxicabs are quite literally the textbook example of regulatory capture.
There is a wikipedia page dedicated to listing them all.
If you look at the wave of ‘populist’ leaders who claim to do things like ‘drain the swamp’ they have often received surprising accolades simply because it is assumed they may be able to ‘disrupt’ the way things were going.