The Disruption Test

Most product and technology ideas don’t start out as “disruptive” or “sustaining.”

They evolve.

The way an idea is shaped and refined by those ushering it into existence determines whether it becomes a market-defining breakthrough or just another incremental improvement.

Yet too often, this decision is made passively. It’s shaped by the instincts of the business plan writers rather than by a deliberate, considered strategy.

Too often, companies fall into the trap of treating “strategy” as a static document—crafted in boardrooms, based on assumptions that may no longer be valid by the time they’re executed.

Traditional business planning tends to reinforce sustaining innovations because the priority is placed on predictable growth and existing customer demands, in alignment to financially driven metrics that are measured in quarters. The process is structured to allocate resources to ideas that fit within a known framework, rather than exploring possibilities that don’t yet have clear financial projections—which is always the case with disruptive ideas.

You can’t measure the market for something that doesn’t exist.

This is why disruptive ideas frequently struggle to gain internal support. Resource allocation in successful companies becomes so aligned with their core strategy that anything that doesn’t reinforce the existing business model is filtered out*.

While incumbents optimize for efficiency and profitability in their established markets, upstarts applying an emergent strategy can discover entirely new value networks. Disruptive businesses are rarely created by following a fixed plan. They are shaped through iteration, learning, and strategic flexibility.

To determine whether an idea has truly disruptive potential, all you have to do is ask these three question…

1. Can it create a new market?

2. Can it undercut incumbents at the low end of the market?

3. Will it force incumbents into a losing battle?

Let’s dig into the Disruption Test more deeply…

Can It Create a New Market?

The first hurdle an idea must clear is whether it can unlock demand that never existed before. The most successful disruptions come not from competing with existing solutions but from providing entirely new customer segments access to something they couldn’t previously make use of because it was too expensive or too difficult to implement.

To assess whether your idea can create a new market, ask:

• Is there a large group of people who have never had access to this product or service due to cost, expertise, or inconvenience?

• Does the current market require customers to engage in outdated, centralized, or inefficient ways to get the job done?

If the answer to both of these questions is yes, then the opportunity exists to serve new customers in a more accessible, convenient way.

Congratulations, you have the opportunity to create an entirely new category of demand! (But you’re not done yet.)

Can It Undercut Incumbents at the Low End?

If an idea clears the first stage, it must then prove that it can break into the market in a way that traditional players and incumbents will struggle to counter. The easiest way to do this is to enter at the low end, serving customers who are either overpaying for features they don’t need or those who aren’t yet utilizing a similar technology due to cost.

To prove disruptive, your innovation must answer:

• Are there existing customers willing to accept a simpler, lower-cost version of the product?

• Can a business model be developed to sustain profitability at this lower price point?

Companies that pass this stage often leverage new cost structures or operational efficiencies to serve a segment of the market that incumbents ignore—turning what was once an unprofitable niche into a high-growth opportunity.

Will It Force Incumbents Into a Losing Battle?

Even if an idea successfully targets a new market AND undercuts incumbents at the low end, it must still pass a final test: Will it fundamentally challenge existing players in a way that they cannot easily respond to? 

If an innovation can be absorbed into the industry without disrupting existing players, it is unlikely to create a lasting competitive advantage.

To determine the answer, ask yourself:

• Does this innovation challenge the core business models of the leading companies?

• Will it be difficult for existing players to respond without major financial or strategic trade-offs?

If an idea forces incumbents to make painful decisions—like abandoning their most profitable customers or changing their fundamental cost structure—it has true disruptive potential.

Disrupting With Intention

An idea that doesn’t pass all three stages will likely fall into the category of a sustaining innovation—an improvement on what already exists rather than a force that reshapes an industry. And, while sustaining innovations can still be valuable, they don’t provide the same opportunity for upstarts to unseat incumbents.

Most well-established companies are innately designed to excel at sustaining innovations, continuously refining their products to better serve their most profitable customers while moving up-market to find newer, more profitable opportunities. This is why they tend to dominate established markets but often struggle to recognize, and respond effectively to, disruptive threats.

For an aspiring disruptor, competing head-to-head with incumbents on their own turf is almost always a losing battle. Large companies have the resources, brand recognition, and economies of scale to win in a sustaining innovation race.

Instead of engaging in an unwinnable war of incremental improvements, upstarts need to mold the playing field to fit their needs. This is what makes the Disruption Test essential—it forces innovators to carefully evaluate whether they are truly building something disruptive or simply making an existing product slightly better.

By applying this structured test, companies can be intentional about shaping their ideas into true disruptions rather than allowing them to be molded by industry expectations, investor demands, or internal biases toward sustaining innovations.

This requires an active, strategic approach to refining an idea. It may involve pivoting away from existing business models, targeting a different customer segment, or rethinking product features to prioritize accessibility and cost-effectiveness over high-end performance.

Many of the world’s most disruptive companies didn’t simply create better products; they redefined market access and customer behavior in ways that legacy players were structurally unable to match. By focusing on new markets, overlooked customers, and business models that made it difficult for incumbents to respond, they passed the Disruption Test and positioned themselves as industry-changing forces.

For innovation leaders, the challenge is not just coming up with great ideas but actively shaping them into disruptive strategies. That requires constant questioning, iteration, and a willingness to challenge assumptions.