As part of Innovation and Disruption Lab (iDisrupt:Lab), we aim to be a catalyst for enabling sustainable/disruptive innovation, which is critical for creating positive social impact globally.
We offer a free platform and ecosystem of resources, that can be leveraged by entrepreneurs, investors, partners, and affiliates globally to facilitate easier collaboration, assist/accelerate their goals, and build a more equitable and sustainable society. We also aim to raise awareness about critical global issues pertaining to social equity and overall inclusivity, through focused research, developing invaluable insights in critical areas that directly affect daily lives and the future of the world we live in.
What is disruptive innovation?
Disruptive innovation typically refers to the innovation that transforms expensive or highly sophisticated products or services—previously accessible to a high-end or more-skilled segment of consumers—to those that are more affordable and accessible to a broader population. In general, this transformation disrupts the market by displacing long-standing, established competitors. In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances.
Main Types of Disruptive Innovation
Harvard Business School Professor Clayton Christensen, who developed the “theory of disruptive innovation,” identifies two main types of disruptive innovation:
1
Low-end disruption
Many innovations struggle to find immediate success with mainstream customers. New entrants have to compete against established companies in established markets and are usually unable to create a product of high enough quality to meet customers’ needs at first. As a result, disruptive innovators tend to target market segments at the low end of the market. These customers are often viewed as less profitable customers by established companies. In this situation, the new entrant, capitalizing on new technologies, creates a low-end product that may be worse than the original but still meets the requirements of the most price-conscious customers. Once the disruptor establishes a foothold, they move upwards to increase profit margins by targeting the more demanding customers.
2
New-market disruption
New-market disruption is when businesses create a new segment in an existing market to reach underserved customers, and/or when a new entrant expands the market by targeting customers who didn’t previously use a similar product at all. Per Professor Christensen, “Low-end disruption doesn’t create new markets, you just gain market share against the old. New-market disruption competes against the original players by going after new customers that these [companies] aren't interested in, selling them a simple product.” Think of new-market and low-end disruption as two ways to approach the challenge of driving incumbent businesses upmarket. One pushes incumbents out of the low end of the existing market, while the other creates a new market segment altogether.
The Disruptive Innovation Model
The below graph contrasts product performance trajectories (the red lines showing how products or services improve over time) with customer demand trajectories (the blue lines showing customers' willingness to pay for performance).
As incumbent companies introduce higher-quality products or services (upper red line) to satisfy the high end of the market (where profitability is highest), they overshoot the needs of low-end customers and many mainstream customers. This leaves an opening for entrants to find footholds in the less-profitable segments that incumbents are neglecting. Entrants on a disruptive trajectory (lower red line) improve the performance of their offerings and move upmarket (where profitability is highest for them, too) and challenge the dominance of the incumbents.
Source: Clayton M. Christensen, Michael E. Raynor, and Rory McDonald, from “What is Disruptive Innovation?” – Harvard Business Review
Essential Components of Successful Disruptive Innovation
1
Enabling Technology
Enabling technology includes technology and new products that can improve how people perform a certain task/process. In disruptive innovation, enabling technology is the aspect of a new product that allows a company to offer it at an affordable price and make it accessible to large numbers of consumers. The rate at which disruptive innovation can occur depends on how quickly the related enabling technology can improve until it reaches the best possible quality while maintaining a low price and ease of use.
2
Innovative Business Model
An innovative business model is a specific type of business model that focuses on reaching new customers. Some innovative business models take time to produce a profit for a company, as they often release new products at lower prices than similar products in order to attract new customers quickly. An innovative business model can target non-consumers (new customers who previously did not buy products or services in a given market) or low-end consumers (the least profitable customers).
3
Coherent Value Network
A coherent value network is when all business partners in a company benefit from the disruptive innovation. This includes partners in the upstream, or processes that prepare for production (distributors, suppliers, vendors) and partners in the downstream, or efforts to produce and distribute a new product in the market (marketing, sales teams). When all parties involved in an innovation commit to the new business model and benefit from the result, they can achieve successful disruptive innovation.
Innovation Taxonomy
Innovation can be categorized in many ways, and some of those categorizations are more or less overlapping. One way to categorize innovation is to classify it based on the technology it uses, the impact on the market it operates in, and how different types of innovations link to the big picture.
Key Focus/Priority: Achieving Sustainability/Inclusivity through Innovation
There is no alternative to sustainable development, with an aim to drive social impact/change and accelerate social inclusion globally
Many organizations are approaching social-sector problems in a fundamentally new way and creating scalable, sustainable, systems-changing solutions. Their method, termed as “catalytic/sustainable innovation,” shares principal features with disruptive-innovation. Like disruptive innovations, which challenge industry incumbents by offering simpler and effective alternatives to underserved and underprivileged communities, catalytic/sustainable innovations can challenge and surpass the status quo by providing solutions to inadequately addressed social priorities (e.g. women empowerment, climate change, social justice, circular economy, etc.). Catalytic/sustainable innovations are a subset of disruptive innovations, distinguished by their primary focus on social change, often on a national/global scale, and are poised to drive positive social impact among many of the underserved and underprivileged demographics around the world.
InQBator Platform
As a part of our iDisrupt:Lab's InQBator initiative, we aim to encourage and accelerate disruptive innovation, by providing a free platform for all entrepreneurs around the world to effectively drive positive social impact to the people who need and would benefit from it the most.
For Entrepreneurs:
Looking for funding for your venture?
Through our platform, we connect entrepreneurs and innovators to organizations, partners/affiliates, investors, etc. We will be glad to extend our network and resources, to help you fast-track your startup/disruptive innovation. All entrepreneurs are welcome to leverage the same; simply contact us to learn more.
Additionally, we have published/compiled several resources you need to be a successful entrepreneur, as well as a representative list of sources to fund, guide, and jumpstart your venture, which you can access below.
Through our platform, we connect entrepreneurs and innovators to investors, partners/affiliates, etc. We are always looking to add new partnerships/affiliations and expand our network. If you are interested in joining our network, simply contact us to learn more.
Additionally, we have published/compiled a representative list of sources to fund, guide, and jumpstart a venture. If you would like to be included on our list, please contact us, and we will be glad to include the details.
Overview - Ways to Accelerate, Fund, and Grow Your Venture
Venture Capital (VC)
Venture capital financing is funding provided to companies and entrepreneurs. It can be provided at different stages of their evolution, although it often involves early and seed round funding.
Venture capital funds manage pooled investments in high-growth opportunities in startups and other early-stage firms and are typically only open to accredited investors.
Pre-seed Funding/VC
The earliest stage of funding a new company comes so early in the process that it is not generally included among the rounds of funding at all. Known as “pre-seed” funding, this stage typically refers to the period in which a company’s founders are first getting their operations off the ground.
Depending upon the nature of the company and the initial costs set up with developing the business idea, this funding stage can happen very quickly or may take a long time.
Seed Funding/VC
Seed funding is the first official equity funding stage. It typically represents the first official money that a business venture or enterprise raises.
Seed funding helps a company to finance its first steps, including things like market research and product development. With seed funding, a company has assistance in determining what its final products will be and who its target demographic is. Seed funding is used to employ a founding team to complete these tasks.
Angel Investing
An angel investor is usually a high-net-worth individual who funds startups at the early stages, often with their own money.
Angel investing is often the primary source of funding for many startups who find it more appealing than other, more predatory, forms of funding.
The support that angel investors provide startups fosters innovation which translates into economic growth.
Crowdfunding
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.
Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives, and venture capitalists.
Crowdfunding allows investors to select from hundreds of projects and invest as little as $10.
Incubators
An incubator firm is an organization engaged in the business of fostering early-stage companies through the different developmental phases until the companies have sufficient financial, human, and physical resources to function on their own.
An incubator firm helps grow a startup from an early-stage idea to a company that can stand on its own.
Services provided by incubators include office space, administrative functions, education and mentorship, access to investors and capital, and idea generation.
Incubators either charge a fee for their services or take an equity stake in the startup.
The period of incubation can last from a few months to several years.
Accelerators
It’s important to note that incubators are different than accelerators.
Though they both have similar characteristics, each functions in a different way with slightly different goals.
Incubators focus on companies that are just starting to develop their idea into a business while accelerators take startups with an established business model and accelerate their time to market.
Equity stakes in startups are more commonly associated with accelerators rather than incubators
Private Equity
Private equity describes investment partnerships that buy and manage companies before selling them.
Private equity firms operate these investment funds on behalf of institutional and accredited investors.
Private equity funds may acquire private companies or public ones in their entirety, or invest in such buyouts as part of a consortium.
They typically do not hold stakes in companies that remain listed on a stock exchange.
In contrast with venture capital, most private equity firms and funds invest in mature companies rather than startups.
Small Business Loans
Small business loans are types of financing provided to companies for different purposes by various lenders.
Many owners turn to small business loans as a solution for capital without losing equity or stake in their company.
Small business loans enable entrepreneurs to get off the ground and remain in control of their organization.
Microloans
Microlending is the method of issuing small loans called microloans to small business owners.
These small business owners—often in developing countries—may not have access to traditional financial products or financial institutions.
Instead, these small businesses work through non-traditional loan service channels to secure financing needs.
Social and Economic Action Lab (SEAL)
iDisrupt:Lab's SEAL is a focused research initiative, with an aim to drive advanced insights into several pressing/key topics surrounding financial inclusion and related social impact strategies.
Women Empowerment
Women's economic empowerment aims to allow women to fully control and benefit from resources, assets, and income, resulting in an overall improvement in women's well-being. Furthermore, women's empowerment refers to the increase in their ability to make strategic life choices that they were previously unable to. Women empowerment can be improved through literacy, education, training, awareness creation, etc.
Socially responsible investing helps to deliver important societal or environmental benefits through investing in companies with a focus on effectively utilizing environmental resources, fostering safer working conditions, or improving corporate governance, and is hence incredibly critical to social equity as a whole.
Climate finance helps countries reduce greenhouse gas emissions such as by funding renewable power like wind or solar. It also helps communities adapt to climate change impacts. Discussions around climate finance are increasing in importance, as the world wrestles with climate change’s visible and severe effects, which we aim to highlight through our research and insights.
The circular economy is a model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products as long as possible. In this way, the life cycle of products is extended. In practice, it implies reducing waste to a minimum, which has positive implications not only for the environment, but also economic and social ones.
Looking for an internship? Join our Research Scholar Team!
to help advance our efforts and drive positive social impact
As a research scholar volunteer, you will be able to impact several people’s lives by helping conduct research and drive insights into several key financial inclusion and social equity related topics/areas. No prior research experience required; all you need is a passion for sustainable innovation and positive social impact! Contact us if any of the above topics excite you, and you are interested in being a research scholar.
Become a published researcher! r-Axis Journal provides a great platform for budding researchers to publish their research.
Have you already done research in the fields of financial inclusion, and more broadly, impacting society for the better? If so, then the Fluid Ice Foundation’s r-Axis Journal, could be a perfect place to showcase your work and research. We will be glad to review and include your research/paper in our journal; you can contact us if you are interested in the same!
Raj Mehta is the Founder and CEO of the Fluid Ice Foundation. As a high school student in the Atlanta metro, Georgia, Raj always enjoys helping others, and aspires to give back to society at every opportunity that comes along. Raj is particularly passionate about financial inclusion, to expand access to financial services to the un/underbanked subsets of the population. Although the un/underbanked subsets of the population have always been excluded, the recent COVID pandemic has made it even more apparent, and caused them to be even further left behind. Raj sees himself as a “social impact catalyst” and a “changemaker” to help mitigate the financial divide, and he aims to make this a reality through his nonprofit – Fluid Ice Foundation. Raj is also a CFEI Certified Financial Education Instructor helping increase financial literacy awareness and education, especially amongst the underprivileged youth.
Raj is focused to be a social impact entrepreneur/innovator, championing sustainable innovation by transforming societal assets/capital to enable disruptive solutions providing a positive return to society.
On a more personal note, Raj enjoys mathematics and has won numerous prestigious math competitions (qualified to Mathcounts Nationals to represent the State of Georgia, AIME, AMC, etc.), is a proficient saxophonist (member, Georgia Music Educator’s Association (GMEA) Allstate Band), is an advanced chess player, and a professionally trained/skilled golfer. He is also an avid book reader in his spare time.
Vijay is the Banking and Capital Markets Leader for Deloitte South Asia. He has over 25 years of consulting experience spanning strategy, business planning, organizational transformation and M&A in India, as well as in Canada, the UK and South East Asia. Among other topics in banking and capital markets, he has significant experience in fintech solutions and related partnership models.
Vijay is also a founding team member of I_Imagine_India, an India-based philanthropic fund looking to empower non-government organizations and social entrepreneurs/pioneers in the field of education in India. I_Imagine_India’s goal is to enable small changes today in the field of primary/ pre-primary education, with the potential to deliver disproportionate learning outcome improvements over the longer term.
Vijay obtained an MBA from the Indian Institute of Management, Ahmedabad (PGPX) and the Chartered Financial Analyst (CFA) charter from the USA.
Vijay is an Advisor to the Fluid Ice Foundation in his personal capacity and not on behalf of Deloitte or I_Imagine_India.
Saiprasad Muzumdar, Advisor
Saiprasad ‘Zoom’ Muzumdar, is an experienced Senior Technology Leader in International Banking and Finance Sector. He has a Bachelor’s degree in Engineering and a Master’s degree in Management. He has worked across the globe for International Fortune 500 companies such as Unisys, Citigroup, Lehman Brothers, Nomura, Royal Bank of Scotland/NatWest Group. He has conducted sessions on Financial Wellbeing for more than a decade with a mission to enhance financial inclusion and financial wellbeing through Financial literacy.
Amit Pandit, Advisor
Amit is a qualified chartered accountant with over 25 years of experience in banking, financial services, capital markets, risk advisory services & financial education. He has experience in building a primary market distribution network, investment banking and handling HNI relationships. He has been involved in personal finance restructuring of many individual businessmen. He has helped many business and individuals for their financial requirements be it for loan arrangements or debt management or asset management. He served as a director of the largest coop bank in India for over 13 years and as a director of a listed company for over 5 years.
He is also associated as a visiting faculty with various business schools for over a decade and takes up subjects of Personal Finance Planning, Wealth Management, Mergers & Acquisitions & Corporate Valuation. He also takes corporate training programs for finance. He speaks at various platforms on various finance, audit and risk related topics including ICAI, BCAS etc. Amit looks after the business building, financial & investor education function at Trugrow.
Amit enjoys his reading, is passionate about his teaching, likes travelling and exploring new destinations and is an avid foodie.
