There is a thin line between the disruption brought about by the many new tech start-ups in the market and innovation strategies adopted by large enterprises.
This is according to Ben Shaw, CEO of HouseME, speaking at the IT Web Digital Economy 2017 event in Johannesburg today. Discussing how innovation and disruption are connected, and the differences between the two, Shaw explained disruptive innovation creates a dramatic change that transforms existing markets or industries, or even creates new ones.
"Disruption is when a company or person anticipates or creates a product or a service before people realise that they need it, and innovation on the other hand, sustains and improves a product or service for existing customers.
"A key element to a disruptor coming into the market is that they focus on a least profitable market segment, as start-ups usually don't have the power to fight for a huge market due to financial constraints. However, innovation depends on resources, research and relationships - large companies usually have a large budget and can afford to hire consultants and pay large teams to test their products," explained Shaw.
Every day, there are new technologies and new start-ups emerging with better business models, and simpler products and services, he continued.
Discussing a case study about how start-ups are disrupting the local market by performing a client's job on their behalf, while also supplying for a new demand in the market, Shaw made reference to his company, HouseME.
Founded by Shaw and entrepreneur Kyle Bradley in 2016, HouseME is a digital rental management platform that is reshaping the South African rental marketplace.
"HouseME not only connects tenants to landlords but it is also set up to serve and support tenants on behalf of landlords across the country - both private and institutional - with complete transparency, underpinned by technology."
The platform uses data analytics to connect dream tenants to great properties with comprehensive vetting processes, a dual-sided rating system, and transparent bidding mechanism.
"The transparency and efficiencies realised through HouseME's technology platform allows expert, on-demand services to be available to landlords for 2.5% of the paid rental fees - a fraction of traditional fees."
A disruptor tears to pieces the status quo with a new paradigm for business, he continued.
"Using a sporting analogy, instead of focusing on improving play, a disruptor plays a different game - by changing the rules," concluded Shaw.
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