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We Need to Expand the Definition of Disruptive Innovation

Wednesday, Jan. 7, 2004, in the Swain Hall parking lot at the University of North Carolina in Chapel Hill, N.C. Four silver Volkswagen Beetles from Zipcar, placed in strategic locations around campus, could be rented for $5 an hour.  Photo: Kevin Seifert/AP

Zipcar counts as a disruptive innovation, Uber doesn’t, according to Clayton Christensen, Michael Raynor and Rory McDonald in a recent article in Harvard Business Review. The authors explain that disruption “describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.” They also write that “disruptive innovations originate in low-end or new-market footholds.”

Zipcar, the company I co-founded in 2000, qualifies as a disruptive innovation because it created a whole new market: demand for cars rented by the hour. For us, applying technology in a totally new way was a key enabler of this new market segment. Without the Internet and wireless communications, car rental by the hour was an impossibly expensive and tedious transaction for such a small increment of time. Zipcar effectively modeled how technology could be applied to open up entirely new markets, as well as new ways of using existing assets...

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