Creative destruction. Sounds cool, doesn’t it? If you’re picturing a demolition derby with decorated cars driven by artists and designers… that’s not it at all.
The gale of creative destruction was first introduced by economist Joseph Shumpeter in 1942, to describe the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one”.
In the years since, it has been embraced by entrepreneurs around the world who set out to upset the established players in all types of industries. As can be seen in this Google Trends graph, in more recent use, the word “disruption” has become increasingly popular (except for that weird spike in the second half of 2018, I wonder what that was all about.)
The notion of disruptive innovation was introduced by Clayton Christensen, an influential professor and researcher who sadly passed away last week. His book, The Innovator’s Dilemma, and the follow up The Innovator’s Solution have influenced the work of many of us in tech, but also have far-reaching implications for all industries.
Today, we see the combined impact of creative destruction, ie the relentless pursuit of efficiencies through continuous innovation, and disruptive innovation, where novel technologies and business models can introduce a discontinuity and compete on a different set of benefits that ultimately expand to replace the old technology and market leaders.
From our vantage point at InOrbit, where we work with the leading robotics companies around the world, we get a front row view of the process of creative destruction at work in a broad range of industries, from agriculture and retail to construction and building maintenance. Often times, these are industries that have been largely bypassed by the latest technologies and have not changed in decades… or even centuries.
For example, last year we had the chance to talk with executives at a construction company in Japan that is more than 400 years old. While there have been obvious changes in technologies, such as the use of steel, concrete and power tools, these changes have been slow and incremental. However, due to demographic and economic changes including an aging population, the average age of the construction worker is now over 50 years old, and getting older. Facing a severe and chronic shortage of manual labor, established construction companies must look to automation and robotics, or face being replaced by new companies that are built around these technologies.
At InOrbit, we set out to do a sort of meta-creative destruction: our mission is to help accelerate the thousands of companies that are creating or adopting robotics at scale, to help them in turn drive disruptive innovations in their respective industries.
Imagine our delight when we were approached by the Creative Destruction Lab, an accelerator program for massively scalable, science- and technology-based companies. The selection process is known for being highly selective, so we were excited to have made into the program and to arrive at the first meeting. However, we weren’t prepared for the level of expertise in the room, nor the level of scrutiny to which they would subject our startup.
CDL was founded in 2012 by Ajay Agrawal, professor at the University of Toronto’s Rotman School of Management, and is home to the greatest concentration of AI-based companies. CEOs, serial entrepreneurs and early-stage investors participate as Fellows or Associates, lending their expertise and experience to startup founders. The program is organized as multiple sessions separated by 8 weeks; for each session, founders are matched with volunteer mentors, set objectives and are then evaluated on their progress. If they don’t make the cut, they’re voted out of the program, so each session is another selection process.
Two of InOrbit’s founders participated at the latest CDL session. We got a chance to meet with several of the Fellows, who grilled us on go-to-market, fundraising, revenue, team, etc. We even had the rare opportunity to meet 1:1 with Ajay Agrawal himself, who provided great insights. Then came the “Big Room” session. To give you a sense of the setup, we were presenting in front of a room with about 50 highly successful executives, investors and high net worth individuals, with the Fellows sitting around a boardroom-style table, and several rows of chairs behind them on either side. People took turns to critique our business, with highly insightful comments based on the detailed discussions and documentation that we shared in advance.
Then, at the end, a question was raised: who would be interested in having a financing discussion with us? A couple of hands popped up right away, then a few more, then even more. The final count for us was 12. We were overwhelmed by the outpouring of support. The next day, we received even more good news: behind closed doors, after we had left the room, four of these highly accomplished and extremely busy executives, most of them active CEOs, had signed up as mentors with a commitment of several hours over the next few weeks.
Creative destruction is hard, because change is hard and changing whole industries is even harder. People will tell you that you’re nuts, that you’re doing it wrong … and they’ll be right, at least based on the normal way of doing things. You keep doing it anyway, because you can’t imagine not doing it. But you don’t have to and can’t do it alone. Having this kind of support from people committed to disruptive innovation who are willing to share their wisdom –acquired through their own experience, successes and failures– is absolutely invaluable.
Thank you, CDL. We hope to be able to pay it forward one day.