The development of a disruptive business

This is my first blog post for over three years. In that time I've have been and continue to be part of a team that has developed a new and successful business in London - what will very soon be the first profitable fixed wireless business broadband infrastructure-based network in the UK, Urban Wimax. Under the extraordinarily strong leadership of our CEO, Sasha Williamson, it has survived three fund-raising rounds, suppliers that failed to deliver anything that could remotely be called working to spec, constant change and all of the various things that try to defeat new businesses. As a team of now around 30 people, we have proved to be adaptable and resourceful. We have delivered a network that provides London-based businesses with a very different and high-quality alternative to the normal broadband services available to them. We have survived and thrived while all of our competitors have disappeared. It's something we are all very proud of.

It's also an example of one principle I see again and again in disruptive businesses - the opportunity is in the detail. When we set up we did so in the face of a lot of scepticism. Broadband was and is pretty ubiquitous in London. There are at least 5 fibre networks, plus the densest concentration of telephone exchanges and data centres in the UK. Everyone can get broadband, mostly at reasonable data rates. According to the pundits and analysts we should have been concentrating on the rural market where nobody could get a decent broadband service. 

However, we knew that the technologies that deliver that broadband had various technical limitations. For a start there was a bandwidth gap between broadband services delivered on BT's old copper telephone network and the newer fibre-optic networks. Copper-based broadband doesn't deliver the speeds it promises, while fibre services can be extremely expensive to install. It can also take a long time to get a service, whereas we can deliver in days - even hours in an emergency. There is only one infrastructure provider of the bit of 'normal' broadband services from the exchange to the office or home - BT - and only one physical route in most cases, so companies couldn't take up network-based business services in case their connection went down. It happens - we regularly get customers who have lost all services in London and turn to us. Resilient telecoms is a growing business need.

More importantly, we knew from modelling that we could deliver a service at much lower cost than the other services and still make very good margins. The cost of services on the old BT network are fixed on a cost-plus basis by the regulator - all non-wireless broadband providers use this infrastructure so can't cut their costs as low as ours. Once fibre networks are installed the bandwidth costs are very cheap, but they can be extremely expensive to install. We knew we could build a sustainable business model by managing costs and concentrating on why we were different.

We also knew that the rural broadband model just does not stack up - the costs remain much bigger than the revenues, largely due to the cost of getting the customer connected all of the way to the core of the internet.

By understanding the detail of the way that networks work, carefully developing the business model and concentrating on why we are different we have built a successful business. Once profitable in mid-2009 we will be able to grow faster and faster.  We are only disruptive to certain parts of the market, but that is where the majority of the profits come from.

It doesn't take a new technology to be disruptive. It just takes a critical look at the way that a business - any business - works. Most businesses are vulnerable to disruption when you look deep enough.