Do you remember Apple’s iconic TV campaign from the 1990s featuring scientists, artists and mavericks, with the famous grammatically questionable tagline ‘Think Different’?

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules … You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them.

Entrepreneurs think differently too, which is why entrepreneurship often attracts the crazy ones, the ones prone to breaking the rules, the ones who don’t say, ‘Why?’ but ‘Why not?’ This ‘craziness’ is often borne out of a passion — a passion to right a wrong, make a difference, solve a problem, make a million.

This begs the question, ‘What’s the difference between someone being seen as crazy and someone being seen as visionary?’ The answer? The crazy ones just take longer to give up. Jeff Bezos’ Amazon started in 1994 but didn’t turn a profit until 2001. Alibaba’s Jack Ma and Google’s Sergey Brin and Larry Page also struggled to make money in the early days. Yet all persisted and stuck to their vision in the face of immense criticism and public pressure.

People said Trump was crazy when he declared in the 1990s he would one day become President of the United States.

People said Musk was crazy when he said that Mars travel would become a commercial reality.

Trump’s and Musk’s crazy ideas took nearly two decades to manifest, and here we are, watching the consequences of those ideas play out in our news feed each day. When an entrepreneur’s audacious idea fails, they’re considered crazy. When their idea succeeds, they’re considered visionary. Musk is both crazy and visionary. As for Trump? History will be the judge on that one.

From zero to hero

Take a look at some of the crazy ideas that are succeeding right here in Australia and you’ll realise that anything is possible. And the factors of digital disruption are compressing the time frames, which means fortunes that would have taken a lifetime to amass are now being made within years, as evidenced by former corporate executive-turned fashion entrepreneur Jane Lu, founder of Showpo. What started off with a laptop and two shelves of clothing is now an online juggernaut. Jane’s business got started in her parents’ garage, became a pop-up store, then a retail store and is now a pure-play online retailer that’s dominating the fast fashion market.

Just as Jane Lu harnessed the power of social to create a business from nothing, the founders of digital marketplace Envato created a digital product out of thin air and leveraged the ‘creativity of the crowd’ to make that creativity accessible to a global market.

Not all startups start in garages, but an uncommon number do. Amazon, Apple, Disney, Google and HP are just a few that did.

Sometimes a crazy idea is borne out of necessity, as Sandy Abram found when she realised that people wanted to shop according to their values.

So, what’s going on? What’s enabling these crazy ideas, and many others like them, to succeed so quickly?

Why are crazy ideas succeeding?

What’s driving this phenomenon is information. As Ray Kurzweil, Google’s director of engineering, observed, ‘Once any domain, discipline, technology or industry becomes information-enabled and powered by information flows, its price/performance begins doubling approximately annually.’¹

And the doubling pattern as described in Moore’s Law doesn’t stop. We design faster computers, which in turn enables us to build faster computers, and so on. It’s like a hallway of mirrors. We are living in unprecedented times. Never in human history have we seen so many disparate but connected technologies moving at such a pace. There are many technological factors underpinning these changes. Let’s look at the main four, which are loosely termed ‘the factors of digital disruption’.

Four factors that enable digital disruption

There are many factors enabling businesses such as Envato and Showpo — and smaller startups such as Wholesome Hub — to get started and grow so quickly, but we’ll focus on the big four here.

Independently, these four factors (or technologies) are all game changers, but when combined, they become exponentially disruptive. The four factors that have enabled these startups to go from zero to hero in such a short space of time are:

1. cloud
2. big data
3. social
4. mobile.

I’ll go into greater detail throughout the book, but here’s a quick-start guide to each one.

1. Cloud

Remember when a simple website cost $5000 to build? Now it costs just $500 or even $5. The cloud went some way to making that price reduction possible. Cloud-based companies such as Amazon Web Services (AWS) now enable anyone to cost-effectively host a website, stream video and pump out massive amounts of content to the world. This ‘factor of production’, once only accessible to large corporates, those with money or those with sophisticated coding skills, means anyone with an internet connection can set up an online business. For example, Melbourne-based blogger Darren Rowse has five million readers each week; the esteemed The New York Times has around the same, meaning a one-man-band can potentially have as broad a reach and be as powerful as a media conglomerate.

The cloud also untethered us from the desktop, allowing us the freedom to work from wherever, whenever and to collaborate instantly with people around the globe.

AWS in particular has removed the major problem of infrastructure management and planning and allowed startups to grow quickly and easily.

2. Big data

Big data is the ability to take vast volumes of data (or even small volumes of data) and quickly analyse it to gain greater insights. Kevin Bloch is the Chief Technology Officer at CiSCO, a company that makes the technology that securely connects nearly everything that can be digitally connected. In other words, it is a significant player in the Internet of Things (IoT). His example of big data shows why this development will impact the work of vast numbers of white-collar workers, potentially eliminating some positions altogether.

A radiologist of 20 years standing would see around 20 million images, and all of their prior training would be focused on helping them read those images so that they can better help the patient. Now, with machine learning, our computers can ‘ingest’ 20 trillion images in less than an hour. Machine learning and artificial intelligence (AI) will also leverage all of the world’s intelligence on radiology and ‘teach’ that machine what all of the radiologists in the world have learned. This means machines can now look at images and provide a much higher statistically correct diagnosis than a single radiologist can. Therefore, the question is, ‘What is the role of the radiologist in the future?’. AI will have a big impact on that industry and indeed all professions that rely on processing data as their main form of currency will also experience high levels of job loss. I have no doubt that we will still need radiologists in the future, but I think that part of the job — in terms of looking at images — will have to change.

Big data can also predict with accuracy what people plan to buy. For example, an online book retailer could feasibly know from its data that a customer is pregnant before she has told her family, simply by looking at the books she is researching. Knowledge is power. Big data is going to be a big deal.

3. Social

Social advertising is relatively cheap to buy and can reach vast audiences instantly. It’s disrupting every industry, and in particular the media sector. For example, the advertising industry used to make 10 per cent on whatever media they booked. Now, that media spend is diverted to Facebook and Google AdWords, and the mainstream media guys miss out. Plenty of other people are monetising social though, and they’re also bypassing the traditional media channels to do it. It’s the network effect that makes social so powerful.

What is the network effect?

The network effect describes a situation when a good or service becomes more valuable as more people use that good or service. In other words, the more people use the product or service, the more valuable it becomes. eBay was one of the first online auction markets. It had the most sellers and the widest range of products. As a result, it attracted more buyers. As a result of that, it attracted more sellers. The more sellers it had, the more buyers it attracted, and so on. This is the network effect in action. The more valuable something (like a website) becomes, the more people use it. This cycle feeds on itself until one platform arises to dominate all others. The telephone was an early example of the network effect in that the value of a phone increases if everyone has a phone. More recently, Facebook, TripAdvisor and Skype have benefited from the network effect.

PS: This is not to be confused with ‘data network effects’. This is when a product (generally powered by machine learning) gets smarter as it is fed more data. In other words, the more data a community contributes, the smarter the product gets.

One of those people monetising social media is Jules Lund, the TV and radio personality. He created a social media marketplace called TRIBE, a site that turns everyday bloggers, photographers and creatives into paid social influencers. He says:

Our mission is to unlock the world’s creativity through everyday content creators. In the past brands turned to celebrities for endorsements. That’s not sustainable for a small brand. Our marketplace matches brands with social influencers. A photo shoot involving models, props, extras, locations, that might have taken a week to get completed, and would have cost thousands, can now be fulfilled almost instantly.

While Jules helps micro bloggers make money, the celebrity endorsement still has its place. Vogue’s Anna Wintour hosted an exclusive Instagram video studio at the New York Met Ball, where A-list celebrities such as Madonna and Blake Lively posed for photos and clips on the app. That one event generated 283 million likes and comments across 42 million accounts in just four weeks.

Social’s ability to reach millions instantly is largely why many startups have been able to fast track their success so cost-effectively.

4. Mobile

You don’t need me to tell you what an impact mobile technology is having. Everyone has a device and we’re using it to search, compare and shop with ever-increasing frequency. Australia-wide, the current percentage of mobile transactions is 42 per cent, but for the savvy entrepreneurs who are optimising for mobile, the figures go much higher, with some pushing 65 per cent.

Google is encouraging this explosion in mobile shopping by prioritising sites that have been optimised for mobile in its search rankings. Digital marketing expert Adam Franklin from Bluewire Media says:

Google will penalise your site if it’s not optimised for mobile so if your site is not yet working well on a mobile, it’s time to take action. If you’re just starting out, design your site for mobile first and work backwards from there as mobile is well and truly the default device for search.

My son’s version of digital disruption is having his mobile phone taken from him.

* * *

Look closely at the business models of the following startups and you’ll see that these same four factors (cloud, big data, social and mobile) underpin their success. Adoption of these technologies enables them to scale without friction, which means they can grow exponentially without incremental increases in costs.

• Skype
• Lyft
• Uber
• Airtasker
• Airbnb
• Yelp
• WhatsApp
• GoToMeeting
• Slack
• Expedia
• Tumblr
• Expensify

If you’re keen to create a disruptive online business, you’ll want to look more closely at these four tools of disruption and identify how you can leverage them in your own business. They are the master keys of disruption. How they are wielded and in what propensity will determine how disruptive your business will be. But first, you need to get started.