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How a Disruptive Offering Must Mature to Achieve Market Leadership

(This post originally appeared on LinkedIn here)

Our recently launched Disruption Selling Maturity Model helps companies successfully push disruptive products and services through the innovation adoption lifecycle. It consists of 5 maturity levels, where a number of pieces have to come together in harmony to deliver the desired result: the market, the offering, and the innovator’s organization. If the three are out of sync, adoption will stall.

In this post we look at Offering as one of the dimensions of the Disruption Selling Maturity Model.

An Offering can be categorized into three main types: products, services, and bundled offerings.

Products are tangible goods that can be physically possessed by customers while Services are intangible activities that are performed for a customer.

Bundled Offerings are combinations of products and services, such as a serviced apartment with space, heating, power, WiFi, and housekeeping.

An Offering is disruptive when it renders the existing value chain around incumbent Offerings invalid. For this it must provide Economic Buyers with a revolutionary value with significantly increased benefits and/or substantially lower Total Cost of Ownership. Examples for Disruptive Offerings are Netflix for video streaming, AWS for cloud services, and AirBnB for room rental.

A Disruptive Offering will not be adopted by the entire market immediately. Instead, the first buyers are Innovators and Early Adopters representing the Early-Market. They only represent a minor share of the Total Addressable Market (TAM) while the vast majority is represented by the more demanding and more risk-averse Mainstream Market buyers.

As a result, the Offering must mature over time to meet the Mainstream Market's expectations. Here is what this maturation process looks like.

Level 1: Product Market Fit. When entering the market a disruptive Offering can be a Minimum Viable Product (MVP) with just enough features to attract Early-Market buyers and validate product concepts. To be successful at this stage the Offering must have Product Market Fit (PMF), defined as fulfilling a market demand by addressing the needs of specific Economic Buyers, leading to its adoption by paying customers.

Level 2: Go-to-Market Fit. On top of PMF, the Offering must be designed for Go-to-Market Fit (GMF) with a clear picture of the Ideal Customer Profile (ICP) complemented by effective channels, ensuring that the product's positioning stands out, and pricing that resonates with customers.

Level 3: Ecosystem Fit. PMF and GMF are sufficient to win Early-Market customers while Mainstream customers expect a complete set of 3rd party products and services to implement, operate, and maintain the Offering within their specific environment. The Disruptor must actively build an ecosystem providing this set for which they must achieve Ecosystem Fit: a clearly defined and sustainable engagement model for providers of complementary products and services.

Level 4: Solution Package. Mainstream customers will test the Offering in Proof of Concepts (PoCs) and pilot implementations before they roll it out across their organization. To lower adoption barriers and realize economies of scale for these customers the Offering must provide Solution Packages with pre-customized own and 3rd party products and services.

Level 5: Strategic Alliance. In a Strategic Alliance two or more parties have a relationship where aligned goals and objectives are the foundation, driving collective efforts towards shared achievements. At this final stage of innovation adoption, customers will phase out Strategic Alliances they hold with Incumbents and switch to the Disruptor. For this, the Offering must provide a multi-year, high-stake, and high-risk relationship substantially improving the customer’s core business.

Check out our website to learn more about the Disruption Selling Maturity Model.

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