Marketdata Commentary: John LaRosa
I've been hearing and seeing the word "disrupt" a lot lately in business conversations. It seems to be the new buzzword that everyone is using, to describe how their new start-up is going to shake up the market and put companies like Weight Watchers out of business. Truth be told, there are very few true innovations and new technologies out there that will truly "disrupt" any market and result in a totally new way of doing things. A few examples: horizontal fracking for oil drilling, smartphones and cell phone when first introduced, the Internet, microwavable foods.
The main reason why most companies will NOT disrupt anything is that they are fighting inertia of well-established behavior, or large companies with marketing budgets that can blow them out of the water. They may make a small dent in the market, or carve out a new niche for themselves, but they almost never put market leaders out of business. And no, free weight loss and fitness apps will not put the big diet companies out of business, despite what many claim.
So, the next time you hear of a start-up that's going to "disrupt" the weight loss market or any other market, take it with a big grain of salt. Most likely, the only thing to get disrupted will be the investors' wallets.