Henry Ford. Steve Jobs. Elon Musk. Disruptive entrepreneurs may upend industries in different ways, but they have one thing in common: They don’t think like the people they disrupt. They look at the world differently — ­and, in my experience, more emotively, too. They appear contrarian, which makes sense. To create something new, an entrepreneur must see things as they should be, rather than simply as they are.

What can we learn from them that we can repeat ourselves? That’s tricky. When a disruptor’s story is told, it often focuses on what they did, rather than how they thought through it. But a disruptor’s mindset changes along with their businesses! To truly know their mindset, you must observe them in their element —­ while they are in the middle of disrupting.

I’ve been fortunate to do that, as I’ve worked with many disruptors (and eventually started a consulting company that focuses on disruption). Here, I’ll share what I learned from three disruptors while they were actively rethinking their industries for the better.

1. Focus on inputs over outputs.

Nabil De Marco is the general manager for Amazon Business in Europe, and he hired me to work with him fresh out of business school. Back then, he was responsible for launching and growing the e-commerce giant’s pan-­European auto­motive business, and he had giddy ambitions to change how vehicles and car parts were sold in Europe.

Within the first few weeks, I saw Nabil making very odd decisions. Most people in his role are focused on “outputs” — financial metrics like revenues and advertising efficacy, which they’d be measured against. But Nabil spent only perhaps 20 percent of his time on those things. He devoted the rest of his days to what he called “inputs.” These were customer-­focused business fundamentals, like increasing the number of auto parts available for free next-day delivery, or developing a tool to stop customers from ordering the wrong car part. One day I mustered enough courage to ask him what he was thinking. His answer was simple: “If I get the inputs right, the outputs will catch up by themselves.”

Disruptors can learn a lot from this. Nabil had many competitors, and it seemed pointless to fight a war of numbers. Instead, he focused on what convinces customers to abandon those competitors — ­and trusted that his numbers would follow. He was right: That auto division is now a valuable contributor to Amazon Europe’s top line.

2. Automate first, hire later.

Michael Birdsall is the founder of TwoSigmas, a startup that recruited English-language teachers from North America and then matched them to students in mainland China as private online tutors. I joined him as a board member and early-stage investor, and then watched with interest as two giant contracts transformed the business.

Demand for online tutors soared in China, and Michael realized that, in order to fulfill the need, he’d have to hire many recruiters to find thousands of English-language teachers. This meant more costs and more head count, and Michael worried that this would slow down his company. He wanted to operate at scale but keep his team small. That seemed impossible…until Michael rethought how recruiting was done.

He hired a handful of machine-learning experts, and he told them to build a technology stack that could predict what type of teacher would fit best with specific clients. He then built a digital marketing platform, which would encourage potential teachers to fill out a profile. After a few months of refining, the system started working. TwoSigmas, with just five employees, recruited more than 180,000 teachers and matched them with students in China. The cost of recruitment per teacher was less than 10 percent of its competitors’ costs, which allowed TwoSigmas to lower prices dramatically while remaining profitable. By 2019, the company was a phenomenal success and got acquired.

Aspiring disruptors can learn a lot from Michael’s mindset. Most incumbents would have simply scaled up to meet demand, continuing along the beaten-down path of traditional recruitment. He insisted on staying agile and fast, which meant rethinking every other part of his business — ­for the better.

3Change your narrative.

Mark Gerhard is the founder of a company called Ascendant Digital, which takes an entirely new approach to technology investments. But his path to disruptor was hardly straightforward. He was raised by a single mother who struggled to make ends meet. Around the age of 20, he left his home in South Africa for London with £300 in his pocket and aspired to build disruptive technology businesses — but nobody wanted to back him.

Over time, he realized that the greatest of entrepreneurs attract others with relatable stories — about themselves and their vision. Mark is an introvert; this didn’t come naturally to him. He tried anyway, deliberately going beyond his comfort zone, often stumbling and at times embarrassing himself as he tested different ways of getting others to share his vision. By the time I met him — he hired me as an intern at the popular video game maker Jagex, where he’d risen to CEO — he was a compelling communicator who could inspire teams of hundreds.

Around a year ago, Mark and two partners had a big idea: They knew that when traditional VC and PE firms invest in tech companies, they often push them for undisciplined growth and steer them in directions that alienate both the founders and their customers. To solve that problem, Mark and his partners instead wanted to create a fund that explicitly helps founders retain creative control of their companies — while getting sufficient capital to grow.

To raise money for it, Mark spoke to 100-plus investors. Instead of just talking numbers, he told them a story of ruined founders — people who lose creative control or operational freedom over their companies to traditional investment firms, because that’s simply how the game works. He could fix that, he said, and foster more great founders in the process. Wall Street loved it; Ascendant raised more than $400 million in cash.

Mark’s story is different from the two I shared earlier in that he didn’t outmaneuver opponents; he simply had a big, disruptive idea and convinced others to join him. But the important question is this: Why’d they join him, and not someone else? The answer wasn’t just cold logic and numbers. It was captivating storytelling. It’s an overlooked style of disruption.

That’s the thing about disruption: It’s not a specific strategy or skill. It’s a way of thinking.


Source: https://www.entrepreneur.com/article/368340

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