The 6 D's of Disruption - a deep dive guide and infographic.

The 6 D's of Disruption, a framework by Peter Diamandis, outline the extraordinary but predictable journey of exponential, digital and digitisable, technologies.

The rapid and transformative growth cycle(s) of these businesses have fundamentally changed not just industries but convenience, cost, culture, communities and even how entire societies function.

The 6 D's of Disruption framework is best explained and understood with examples from ones own life in mind. For example, consider how in just 30 years the necessity of printed tomes such as encyclopedia's, the yellow pages and traffic map books have largely been pushed aside in favour of search engines and map apps, such as Google Search and Google Maps.

Such is the impact, convenience and rapid adoption by almost all in society the idea of purchasing an encyclopedia or traffic map book seems equally quant and pointless, as the information available in both is outdated by the time it is printed.

So, let's get into exactly what the 6 D's of disruption are:

 1. Digitisation

At the heart of the 6 D's of disruption is digitisation of a product or service. Many of the apps and services we use today started as physical products or more manual services - Encyclopedia's and phone books turned into search engine results, LP's, CD's and DVD's turned into music streaming, even match-making and dating services turned into apps such as Tinder, Bumble and Hinge.

This is not to suggest that digitisation of physical products removes the service all together. It simply provides the first stepping stone on the evolutionary path that is the 6 D's of Disruption.

Beyond digitisation of information - locations, musical notes and coordinates, digitisation also applies in the physical world in the form of 3d printing. Not so long ago creating physical products or objects required significant specialisation in the form of tools and education. Today, there are free tools, guides, YouTube videos and courses on 3d printing at home or the office.

2. Deceptive

This stage feels somewhat counterintuitive. After all a new technology has launched, it is going to change the world, and yet it is more whimper, less bang, than hoped or thought. At this stage, it isn't disrupting anyone or anything particularly. Its initial growth may even seem, to some, rather unimpressive.

A brief side note here that too much PR exposure at this point can actually kill businesses as benefits can become overstated and expectations become unrealistic and impossible to satisfy. As an example a good many businesses have been reported as being 'Google killers' over the years - almost all have fallen into obscurity and Google continues to go from strength to strength.

There are two key reasons for this stage being 'deceptive':

• Firstly, companies in this stage often have limited functionality, a limited user base and limited expectations, and
• Secondly, it isn't always immediately apparent how the technology can be uesd, beyond its initial, stated, reasons for existing as stated by the owners and creators of the technology.

It is for these reasons that in the early stages, incumbent companies that own the product or service being digitised by others do not feel threatened by it. Incumbent companies may feel they're 'boxing at shadows' by trying to sniff out and snuff out every small challenged to their technology - and indeed they might, to some extent. But more often than not these companies simply aren't able or prepared to fight on the challenges terms. This can be due to a lack of focus, lack of belief in the digitisation of the product, lack of management foresight or lack of skills and resources to mount a challenge.

In Australia there is a famous example of the then founders of carsales.com.au presenting to the boardroom of a very large newspaper group, and offering to build with them an online classifieds website for selling cars and trucks. The news organisation saw this as a threat, not an opportunity, to their paper classifieds business.

As the story goes the founders were virtually laughed / shouted out of the room, but they went on to found carsales.com.au. Carsales is now the largest platform in Australia for selling all manner of vehicles and watercraft (under sub brands), with the group now listed on the Australian Stock Exchange and worth more than $12.7 billion (AUD), at the time of writing.

The value of the news organisation meanwhile dropped so significantly it was swallowed up by a larger news and media group. Had it not been acquired it may well have struggled to survive.  

3. Disruption

This phase is where the rubber really hits the road and growth really takes off. There is an inflection point in this stage between incumbents and the digital challenger, where usage, convenience, price and benefit become almost impossible for the customer to ignore.

Usage of the digital disrupter accelerates so much and its critical mass becomes impactful to to the point where legacy usage by customers is diverted away, and it impacts sales, revenue lines and the profitability of incumbent organisations.

Off the back of the internet, itself a service which has gone through the 6 D's of disruption a multitude of new services have sprung up which have in and of themselves impacted, threatened and even completely eliminated entire businesses and business models. The obvious example here is the impact of streaming services for content and the devastating impact it has had on once successful businesses such as Blockbuster and HMV music stores. 

4. Demonetisation

This stage reflects the sliding scale of costs that comes from mass adoption of a product, and demonetisation - deliberately not charging for usage - may even become a decision these disruptors choose:

- in order to grow faster,

- because something about utilisation of the service by people is more valuable than charging users,

Demonetisation is where we here at CXA believe Large Language Models (LLMs), such as ChatGPT, Google's Gemini, Co-Pilot and a host of smaller LLMs are at now, at the time of writing (July 2024).

As we wrote about recently on our blog, the usage by millions more people, billions more times for free, than could ever occur if the technology was locked behind a paywall is infinitely more valuable than some revenue now. LLMs are, or if some are to be believed, already running out of modern language to scan and learn from. The only way to truly evolve the offering at this point therefore is to generate the most usage by real humans as quickly as possible.

5. Dematerialisation

This stage involves the elimination of the production of the physical product as a necessity to use or receive the product or service. The obvious example many use here is the digitisation of music. By music becoming accessible via pixels arranged on a touch screen, the necessity of producing, transporting and selling tens of millions of CDs and DVDs has virtually ceased. Infact demand for physical media is now so low that Disney has halted physical media sales in Australia and other countries. Another example of dematerialisation is visiting a Doctor (GP) and receiving a sick note. Just a few years ago, physically visiting a GP and receiving a paper note with a 'wet' signature (that is a signature made with ink) was necessary. Today, telehealth options are widely available and utilised without issue by consumers or employers.

6. Democratisation

This, the final stage of digitisation is about the widespread adoption and accessiblity of the technology. The example we use here is the camera. In the early to mid 1990's the film camera and film processing market was booming. As recently as the mid 2000's the point and click camera market was also thriving. Today, with high quality cameras and software that enhances the pictures built into mobile phones buying a point and click camera, let alone one that requires film which then needs to be processed seems fanciful and of a by-gone era.  

The adoption of cameras in phones and in vehicles, has also literally led to democratic movements and improvements in society. Would America have heard about, been as disgusted by or as much changed after George Floyd's murder without it being filmed on a smartphone camera? Consider for a moment the consequences and impact that major moments, suh as freedom movements around the world, and relatively minor moments, such as police officer falsely claimed a civilian was at fault in a traffic accdient, if not for the democratisation of cameras.

Without the ability for billions of people to quickly capture and share some of the greatest moments of humanity as well as some of its greatest injustices, as a society we would be holding ourselves back from the next frontier of greatness and social progress.