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September 21, 2015

Donald Trump is No Political Disruptor

5 Things Politics Reminds Business Disruptors to Think About

Every time a pundit labels Donald Trump a disruptor, I have to roll my eyes. The Donald is a lot of things – billionaire businessman, brand-maker extraordinaire, and master showman, just to name a few. But candidates have been tapping into angry electorates since the beginning of our Republic, if not the beginning of time. Donald Trump may very well be disruptive, but he’s certainly no “Disruptor.”

So if he’s not a disruptor, then who – or what – is?

“Disruptors” are something else entirely. The phrase “creative disruption” was first coined by Harvard Professor Clayton Christensen in the 1990s and was made famous in the book, “the Innovators Dilemma.” It refers to the idea of new technologies, coming to market, ignored at first by legacy companies, but within a few years completely redefining the marketplace.

We know the most famous examples — personal computers upending mainframes; iPhones transforming both the traditional phone and the PDA market; or Uber and Lyft redefining the taxi industry.

But these days, disruption is coming fast and furious to every sector, not just technology. Just this week, the financial information-sharing company Symphony launched, trying to displace far more expensive Bloomberg terminals, (terminals which were themselves disruptive back in the day). Similarly, portfolio automation company Wealthfront is trying to elbow out traditional wealth management advisors and firms to help you grow your assets.

Donald Trump may very well be disruptive, but he’s certainly no “Disruptor.”

It used to be that disruptors would have to think through business issues as the come to market – pricing, go-to-market strategies, key partners — and worry about political issues far down the road. But political issues now emerge in 3 to 5 months, rather than 3 to 5 years.

So, when it comes to politics, disruptors need to think through five distinct issues as they enter the marketplace or introduce a new product or service.

  1. Will Washington care? If you’ve got a new technology in a highly regulated industry such as financial services or health care or energy, you better believe that they’ll care. So you’ve got to know the regulatory and political landscape just as well you understand the business landscape. This means building the right relationships, having a policy-specific thought leadership strategy, and educating policymakers proactively about what you do.
  2. Will Sacramento or Albany or Austin get involved? Many of the biggest fights over disruption aren’t actually happening in Washington, but in state legislatures across the nation. Governor Jerry Brown just vetoed misguided drone legislation, and Uber and Lyft are fighting legislation across the nation. The first skirmish in these wars, can often define whether it will come up in just one state, or whether you’ll be fighting a multi-front war.
  3. Is my company positioned right vis a vis policymakers? So you’ve worked out your elevator pitch for VCs and other investors, but have you thought about how your product will sound to a mayor, member of congress, or a mischievous regulator. Don’t hand your competitors ammunition by coming across as an arrogant tech company. If you get the positioning right early, you’ll save yourself countless headaches down the road. (see steps 1 and 2)
  4. Will my business competitor go to the mattresses? Increasingly, businesses are using the tactics of political campaigns to win business-to-business disputes – polling, opposition research, leaks to the media, and much, much more. Have you thought through your potential weaknesses, and can you go on the offensive and define yourself before your competitor defines you?
  5. What is my Achilles heel? Today, one crisis can change your world forever. Look no further than Ashley Madison. You’ve got to prepare for the inevitable crisis beforehand, and do everything possible to turn that crisis into an opportunity. If you don’t, it could define your business for the long haul.

Donald Trump may be a master showman, but he has not mastered the politics of disruption. That will be left to businesses – disruptors and the disrupted alike.

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