Disruption matters. But as our research reveals, that’s only half the picture of how new markets and blue oceans are created. The other half, and we would argue the more important half of how new markets and blue oceans are created, is what we call nondisruptive creation. What we mean by that is creating new markets where there once wasn’t any.
Take one of the many examples in our research, microfinance. Today it’s a multibillion-dollar industry. But twenty-five years ago it didn’t exist. That market didn’t exist until Grameen Bank solved an unaddressed problem: the lack of access to capital for billions of people who lived on only a few dollars a day. Microfinance didn’t disrupt anything.
No one lost a job because of it. No company went out of business. It only enabled people who had previously been denied access to capital to now start businesses and change the quality of their lives. Viagra, online dating, Sesame Street, life-coaching – are other examples of new markets that were created with nondisruptive creation. And as we lay out in Blue Ocean Shift, the opportunities for nondisruptive creation are huge.
No executive or entrepreneur can afford to not understand this missing half of how new markets are created. That would be like shutting yourself from half of your opportunities to seize new growth. Our book Blue Ocean Shift shows how new market space is created based on both disruption and nondisruptive creation and outlines the path to achieve one over the other.