Most innovation is not necessarily disruptive; rather it’s mostly incremental, which makes disruption rare and it takes time. It’s also difficult to predict what will be disruptive in the future.

For example, Netflix, Skype, Wikipedia, Google Adwords and Salesforce are all examples of disruption. At their birth, nobody predicted they would be disruptive.

Here’s a presentation I did for a University a few years ago about disruptive innovation:

What about spotting a market that is ripe for innovation?

There are many ways to spot opportunities for innovation. One way is to spot a market that is stuck. A clear sign that a market and/or industry is stuck is its lack of innovation. One where everyone uses the same technology solutions in the same way, the same best practices, serving the same customer segments and the same business model.

Anyway, several key factors can indicate a market is ripe for disruption:

1. Customer pain points and frustration. One of the clearest signs of a market ready for disruption is widespread customer frustration or dissatisfaction with existing products/services. When consumers don’t trust or are unhappy with the current system, it creates an opening for new solutions. Look for industries where customers frequently complain about poor experiences, high costs, lack of transparency, or other pain points. For example, the taxi industry before Uber and Lyft. Customers were frustrated with unreliable service, difficulty in hailing cabs, and lack of transparency in pricing. Ride-sharing apps addressed these pain points by offering easy booking, clear pricing, and real-time tracking.
2. Technological advancements. Markets become vulnerable to disruption when new technologies emerge that incumbents fail to utilize. If there are technological innovations that could dramatically improve products or processes, but established companies are slow to adopt them, it creates an opportunity for disruptors. Industries still relying on outdated technology are prime targets. For example, the music industry before streaming services. While digital music files existed, the industry clung to physical media sales. Companies like Spotify and Apple Music disrupted the market by leveraging streaming technology to offer vast libraries of music on-demand.
3. Market complacency. When dominant players in an industry become complacent and stop innovating, it’s a sign the market is ready for new entrants to shake things up. Look for industries where the major companies have grown stagnant, are slow to change, or seem out of touch with evolving customer needs. For example, the cable TV industry before streaming services. Cable companies had become complacent, raising prices without adding value. This opened the door for Netflix, Hulu, and others to disrupt the market with more flexible, affordable streaming options.
4. High prices and limited accessibility. Markets where products/services are unaffordable or inaccessible to large segments of potential customers are ripe for disruption. If only a small percentage of people can access or afford an offering, there’s an opportunity to develop more accessible alternatives that could expand the market. For example, the eyewear industry before Warby Parker. Designer eyeglasses were expensive and only available through optometrists or high-end retailers. Warby Parker disrupted the market by offering stylish, affordable glasses directly to consumers online.
5. Inefficient processes. Industries plagued by inefficient, complex, or opaque processes are vulnerable to disruption. Look for markets where tasks are unnecessarily complicated, time-consuming, or costly. Streamlining and simplifying these processes can be a powerful form of disruption. For example, the banking industry before fintech companies. Traditional banks often had slow, paper-based processes for tasks like loan applications. Fintech startups disrupted the market by offering faster, digital-first solutions for various financial services.
6. Consolidated market power. When an industry is dominated by just a few large players, it creates space for disruptive new entrants. Highly consolidated markets often lack competition and innovation, making them targets for disruption. For example, the grocery industry before online delivery services. A few large chains dominated the market. Companies like Instacart and Amazon Fresh disrupted the industry by offering convenient online ordering and home delivery options.
7. Changing customer needs. Markets can become ripe for disruption when customer needs and preferences evolve, but existing solutions fail to keep pace. Look for industries with a growing mismatch between what customers want and what’s currently available. For example, the hospitality industry before Airbnb. As travelers sought more unique, local experiences, Airbnb disrupted the market by connecting them directly with homeowners offering diverse accommodation options.
8. Regulatory changes. Shifts in regulations or policies can suddenly make a market vulnerable to new entrants and business models. Keep an eye out for regulatory changes that could reshape competitive dynamics in an industry. For example, the cannabis industry in states where it has been legalized. As regulations changed, new companies entered the market, disrupting traditional pharmaceutical and recreational substance industries.

By looking for these factors, entrepreneurs and innovators can identify markets primed for disruptive new solutions. The most promising opportunities often lie where multiple of these conditions overlap.

One thing to add is that disruption rarely comes from established businesses because they’re not motivated to disrupt themselves; but rather from startups.

Bottom line: Though disruption is hard, either you drive disruption or you’re outpaced by it.