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The Friction of Disruption: Trigger Points for Building Billion Dollar Startups

Wherever there is friction, there lies an opportunity to build a billion dollar startup. When you want to generate new ideas for your business or ideate new startup concepts, you can trigger the innovation within your entrepreneur mind by letting your environment inspire you. The concept of friction is one such powerful trigger mechanism. [1]

Any high school physics class teaches the intricacies of friction. Everybody understands the concept of friction intuitively but what you learn in physics is that different objects have different friction coefficients. You can use the same mental framework to look at friction within various industries. The higher the friction experienced in the product value stream or any business process, the bigger the opportunity to create disruption within that sector.

"You can create innovation disruption when you take friction-type processes that are still in analog format and convert them into a seamlessly digital format."

You can create innovation disruption when you take friction-type processes that are still in analog format and convert them into a seamlessly digital format. Bits and bytes, powered by electrons, substantiality reduce the friction of any process or function.

Friction can occur on the digital front too. Facebook reduced the friction of analog and digital communication between friends and family by creating a utility that efficiently connects. Twitter reduced the friction of mass communication on a global scale by allowing anyone to communicate with anyone. Opportunities can arise where you solve one friction problem digitally, creating a new friction opportunity to solve. Facebook and Twitter solved some friction problems of communication and interaction between people, but as a result, they increased the frictional coefficient of clutter and noise. Just look at all the social media feeds coming your way through various social platforms.

"When you look for friction challenges, the opportunities are limitless."

When you look for friction challenges, the opportunities are limitless. Whether you transform an analog process into digital, or a digital process into a more efficient digital process with less friction, you create the opportunity for a new billion-dollar startup in any sector until that particular process becomes frictionless. If you succeed in making serious problems frictionless, you can win big. The higher the friction frequency in your sector, the bigger the market opportunity for your startup to solve and become the next startup media darling.

"Focus on lowering the friction coefficient to zero in your sector, and you can dominate your sector."

Focus on lowering the friction coefficient to zero in your sector, and you can dominate your sector. This is not the classic strategic case of having a first mover advantage, but being the first company to reduce the friction coefficient to the lowest number possible. 

Attacking friction opportunities is limitless. Unless a process is set up for instantaneous response and service, reducing the friction of any process is a huge opportunity. Find friction by looking to both the analog and digital worlds. Ask yourself these questions:

(Q1) Where do I see the most friction in commerce (“brick and mortar” and online) today? 

(Q2) Are there better ways of reducing communication and interaction friction today than what we have with communication services like Facebook or Twitter? 

(Q3) What industries incur huge friction in the innovation, development, sales and distribution functions—where analog processes are still the dominant form of business execution?

(Q4) How do I reduce the friction of raising capital for my startup?

(Q5) How do I reduce the friction of launching my product or service into a highly-cluttered marketplace?

Instagram is a good example for inspiration. Despite there being quite a few photo-sharing services already in the market with dominant market share positions, Instagram was able to propel itself into a billion dollar acquisition because they reduced the friction of uploading pictures and sharing them with others. That’s the power of creating frictionless ideas and turning them into frictionless billion dollar startups.


[1]The Idea Hunter and Gatherer,” July 2, 2013, by Damir Perge, entrepreneurdex

Copyright © 2016 entrepreneurdex 

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Damir Perge, author of Entrepreneur Myths: The Startup Reality, is the founder of entrepreneurdex, a startup studio using complexity science to fund, launch, accelerate and scale startups and growing businesses.

An entrepreneur and investor, with more than 25 years experience, he's worked with ventures in the technology, internet, media and publishing, entertainment, energy, and manufacturing sectors raising more than $300 million in capital for various companies and investing more than $50 million into startup and emerging ventures. He's sat on the boards of 11 companies, served as editor-in-chief of Futuredex, a private equity magazine. Follow 

Pre-order Damir Perge's upcoming books at damirperge.com >

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