Disruptive innovation refers to the innovation that allows a whole new population of consumers at the bottom of a market, access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.

As companies tend to innovate faster than their customers’ needs evolve, most organizations eventually end up producing products or services that are actually too sophisticated, too expensive, and too complicated for many customers in their market.

Companies pursue these “sustaining innovations” at the higher tiers of their markets because this is what has historically helped them succeed: by charging the highest prices to their most demanding and sophisticated customers at the top of the market, companies will achieve the greatest profitability.

However, by doing so, companies unwittingly open the door to “disruptive innovations” at the bottom of the market.

So we could say that a disruptive innovation transforms expensive or highly sophisticated products or services to those that are more affordable and accessible to a broader population.