- They are significantly more cost-effective than using the status quo solution,
- They target underserved applications and/or appeal to new users,
- Disruptive innovations are usually introduced by a startup or outsiders,
- An enabling technology advances the disruptive solution,
- Disruptive innovations are often introduced with business models different from the incumbents, and
- They may begin with poorer performance than established offerings but innovative solutions rapidly outpace their larger rivals in performance and in riding the cost curve.
Being More Cost-effective (read, “significantly cheaper!”)
Smartphones, at $500 a pop, deliver a significantly cheaper computing interface than almost all computers. Similarly, the Cerent 454, offering point-to-point 2.5 gigabits of bandwidth, was initially priced at one-third the cost of competing optical transport products in 1999. In looking at NASA’s advocacy for CubeSats, although they are not as capable as traditional satellites, their cost, on the order of a few tens of thousands of dollars in 2017, is much cheaper.
The Internet, founded in 1969 , provided an infrastructure to facilitate the rapid advance in communications and, later, commerce demanded by those that “want it quick.” E-mail has replaced the hand-written letter and Amazon.com-like stores are replacing the brick-and-mortar shopping experience, to name a couple. Similarly, Cerent offered solutions for metropolitan optical transport service providers beginning in 1998 that allowed telephone companies and cable operators to readily expand the country’s Internet infrastructure in support of the burgeoning traffic demand for E-mail, E-commerce, mobility applications, and now, streaming video entertainment. Today, CubeSats provide data collection platforms in outer space (for a wide variety of phenomena) as a way to advance both Earth and space science for NASA and its allied research institutions.
Disruptive Innovations Usually Introduced by Upstart Startups
Startup firm, Netflix, introduced streaming video into the residential video market. It was not cable operator Comcast or telephone company AT&T. Similarly, Cerent brought the lowest cost per bit for telcos and cablecos looking to build out their metropolitan optical infrastructure. It was not the established equipment suppliers Nortel, Lucent, or Alcatel . In the CubeSat market, researchers in academia – Stanford and Cal Poly – brought this disruptive innovation to market. It was not Boeing, Northrop Grumman, or Lockheed Martin. During NASA’s initial Cube Quest Challenge, all five winners announced in 2016 were either startup companies in the aerospace market or entrepreneurial arms within the university community.
Enabling Technology Advances the Disruptive Solution
While Netflix was successful by leveraging the ubiquitous Internet infrastructure, Cerent found its success by building upon the widespread deployment of optical fiber in metropolitan markets. Both companies were founded in 1997, but Cerent grew out of its forerunner Fiberlane, and then evolved within Cisco Systems. Cerent also had the good fortune to utilize advances in VLSI technology to allow it to build the most cost-effective optical transport product in the market, a competitive advantage that lasted for at least three years. As the authors of Achieving Science with CubeSats: Thinking Inside the Box (2016) write, “CubeSats are being helped along by advances in non-space-related terrestrial, commercial technology areas: software advances, processing power, data storage, camera technology, compression, and solar array efficiency.”
As of May 2017, the CubeSat Launch Initiative had selected 152 CubeSats from thirty-eight states across the country and has launched 46 CubeSat missions as part of the NASA Launch Services Program's Educational Launch of Nanosatellite (ELaNa) Missions.
Different Business Models Contribute to the Winning Disruptive Solution
Apple’s iPod-iTunes disrupted the music industry by establishing network connectivity between its music library and Apple developers with its computer, and then, its phone users. Netflix disrupted the television industry by leveraging the growing Internet infrastructure and building its facilities to connect its video library with residential users. Cerent established a business model that outsourced manufacturing and allowed its use of contract manufacturing to leave capital funds for investment in product design instead of brick and mortar facilities, an approach that none of its competitors used in the late 1990s. Similarly, in 2017, “CubeSat platforms are being developed by university-based and private-sector entrepreneurs using low-cost off-the-shelf components, small teams, rapid iterations, and high-risk postures,” according to the authors of Achieving Science with CubeSats (2016).
Improving Performance with Time
Innovative product and service offerings may begin with poorer performance than established ones, but innovative solutions also rapidly outpace their larger rivals in performance and riding the cost curve. Just as Apple smartphone cameras were initially inferior to those of digital camera makers Nikon and Canon, it didn’t take long for them to become as good as and, today, in some cases, superior to the legacy providers. Similarly, Cerent’s ‘454’ first release, introduced in the fall of 1998, offered a threadbare set of capabilities, but that functionality soon began to improve as the technology matured and the number of customers grew. By the third major software release of the ‘454’ it had achieved the required “carrier class” designation so that it could be used by some of the world’s largest telephone companies, such as AT&T. The same can be said of CubeSats, which initially “served rather limited on-orbit functions other than ‘beeping’ back telemetry.” Now they are becoming a standard approach to capturing scientific data from space.
Cerent’s ‘454’ innovation of days gone by and CubeSats today share many characteristics of disruptive innovations as we outlined above – economic disruption, targeting underserved or new markets, driven by new players, arrival of enabling technology, implementation of new business models, and improving performance over time.
For any innovation to live up to its potential, the management of disruptive innovations needs to be from the customer, or user’s point of view as evolutionary, not revolutionary, even if the actual product or service is revolutionary.
 Inspired by the authors of Achieving Science with CubeSats: Thinking Inside the Box (2016) and the study of innovation by Clayton Christensen.
 “April 7, 1969 is often cited as the symbolic birth date of the net because RFC memoranda contain research, proposals, and methodologies applicable to Internet technology,” according to Mad Science (2012) editor, Randy Alfred (p.99). “RFC documents let engineers and others kick around new ideas in a public forum. Those ideas are sometimes adopted as new standards by the Internet Engineering Task Force [IETF]. The opener, RFC 1, was titled “Host Software” and written by UCLA’s Steve Crocker. But other dates for the birth of the net also have their supporters.”
 Nortel is now bankrupt with some of its assets being picked up by Ciena. Alcatel and Lucent eventually combined to form ALU, which was then acquired by Nokia for $16.6 billion in 2016. Nokia is trying to stay relevant in the communications market even as both Apple and Samsung obliterated Nokia in the mobile telephone market during the 2000s.