The Next Disruptors
We're in a historically fertile time for the creation of technological game changers. Here are 11 innovations that could reorder entire industries - and spawn vast new entrepreneurial opportunities.
(Business 2.0 Magazine) -- "What use could this company make of an electrical toy?"
With those words, William Orton, the president of Western Union, dismissed the newfangled gadget offered to him for $100,000 in 1876. Other leading lights echoed his skepticism. "An interesting novelty," financier J. Pierpont Morgan huffed. "But the telephone has no commercial application."
The telephone, as it turned out, did have a commercial application or two. It was one of the great disruptive technologies in history, changing forever the method of human communication, creating whole new industries, destroying others, and savaging those who failed to grasp its implications - including Orton's Western Union, which saw its telegraph-based networks come under fierce attack by the rapid spread of Alexander Graham Bell's electrical toy.
That's the way it is with disruptive technologies: Almost no one fully comprehends what a shock to the existing order they represent until well after the rattling has begun. You think those guys in the cave knew what they were really onto when they clacked some rocks together and got fire? In our era, as recently as 15 years ago few could have imagined that this curiosity called the Internet would utterly change the way we work, play, and challenge incumbent senators in Connecticut.
Thus it was with some humility that we set out to answer a question: What technologies, bubbling below the surface today, are likely to erupt with such seismic force that they'll reshape our world? We were heartened by the sense that, thanks to the Web and the sheer speed of technological innovation, there has rarely been a better time for the creation of disruptors. "Disruptors," marvels Harvard business professor Clayton Christensen, who coined the term "disruptive technologies," "are everywhere."
We've identified 11 businesses with the potential to become tomorrow's disruptors. They include a company working on a radically new way to power electric cars. An engineer who wants to fight the multibillion-dollar scourge of traffic congestion. And even would-be repeat disruptors like Marc Benioff, whose Salesforce.com (Charts) is about to unleash a new assault - here reported for the first time - on the enterprise software market it has already transformed by pioneering the sale of apps over the Web. Of course, not all will succeed. But the ones that do will also create huge demand for ancillary services and new products. It's a great time, then, for entrepreneurs who figure out how to navigate the unsettled territory ahead - and not such a great time to be an incumbent, in business as well as politics.
THE DISRUPTOR: NETVIBES
THE INNOVATION: Highly customizable Web start pages
THE DISRUPTED: My Yahoo and other leading personalized portal pages
Tariq Krim is a natural-born disruptor. He was 12 when he hacked into France's Minitel state-run computer system in 1984 to build a messaging app, and he's founded two successful startups. His latest game-changing idea: Netvibes, a customizable start page now attracting millions of users from more than 100 countries - and rattling portal powers like My Yahoo, MSN, and Google (Charts). "The Web has become increasingly bureaucratic," Krim says. "We are trying to break all the traditional rules."
Netvibes currently doesn't accept typical Web ads - the kind Krim denounces as "Advertising 1.0, in your face." Prizing customer loyalty as a means to growth, Netvibes is instead working with partners that offer sponsored services. A mobile-phone company, for example, can offer free SMS in order to get a branding buzz.
Krim also is taking full advantage of the move to user-generated content, and devoted Netvibers are at the heart of the site's growth and development. Before Krim could even write himself a note to follow up on an idea he had for a Netvibes module to track World Cup results this summer, for example, a French user created and posted it. Users in other countries rushed to translate the module into seven languages. "It was done by the users, without even checking with us," Krim says. Netvibers are also to thank for the fact that the site is available not only in English and French, but also in Chinese, Croatian, German, Hindi, Portuguese, Russian, and Spanish.
The real threat to established portals, however, comes from the impressive speed and unprecedented drag-and-drop simplicity of the site's customization tools. With Netvibes, users can rapidly change the look of their start page, select content, add RSS feeds, and custom-build features from other Netvibes users. Any e-mail feed can be put on Netvibes; My Yahoo users can choose only Yahoo's e-mail option. "Netvibes makes it brain-dead easy," says Charlene Li, a principal analyst at Forrester Research who has been using Netvibes.com as her start page for months.
Dethroning My Yahoo won't be easy. It has more than 60 million users. But Krim thinks Netvibes's ease of use will make it disruptive. "The simpler it is, the more people will use it," he says. "If it's easy and fun, you'll use it again."
And Krim is on a roll: Netvibes launched in September 2005 and lately has been adding a new user about every three seconds. He expects to have more than 15 million users by year's end, and he just got $15 million in fresh funding. Krim won't disclose specifics but says he has a steady stream of revenue from sponsorships and partnered services, of which he's currently developing 100.
THE DISRUPTOR: EESTOR
THE INNOVATION: A ceramic power source for electric cars that could blow away the combustion engine
THE DISRUPTED: Oil companies and carmakers that don't climb aboard
Forget hybrids and hydrogen-powered vehicles. EEStor, a stealth company in Cedar Park, Texas, is working on an "energy storage" device that could finally give the internal combustion engine a run for its money - and begin saving us from our oil addiction. "To call it a battery discredits it," says Ian Clifford, the CEO of Toronto-based electric car company Feel Good Cars, which plans to incorporate EEStor's technology in vehicles by 2008.
EEStor's device is not technically a battery because no chemicals are involved. In fact, it contains no hazardous materials whatsoever. Yet it acts like a battery in that it stores electricity. If it works as it's supposed to, it will charge up in five minutes and provide enough energy to drive 500 miles on about $9 worth of electricity. At today's gas prices, covering that distance can cost $60 or more; the EEStor device would power a car for the equivalent of about 45 cents a gallon.
And we mean power a car. "A four-passenger sedan will drive like a Ferrari," Clifford predicts. In contrast, his first electric car, the Zenn, which debuted in August and is powered by a more conventional battery, can't go much faster than a moped and takes hours to charge.
The cost of the engine itself depends on how much energy it can store; an EEStor-powered engine with a range roughly equivalent to that of a gasoline-powered car would cost about $5,200. That's a slight premium over the cost of the gas engine and the other parts the device would replace - the gas tank, exhaust system, and drivetrain. But getting rid of the need to buy gas should more than make up for the extra cost of an EEStor-powered car.
EEStor is tight-lipped about its device and how it manages to pack such a punch. According to a patent issued in April, the device is made of a ceramic powder coated with aluminum oxide and glass. A bank of these ceramic batteries could be used at "electrical energy stations" where people on the road could charge up.
EEStor is backed by VC firm Kleiner Perkins Caufield & Byers, and the company's founders are engineers Richard Weir and Carl Nelson. CEO Weir, a former IBM-er, won't comment, but his son, Tom, an EEStor VP, acknowledges, "That is pretty much why we are here today, to compete with the internal combustion engine." He also hints that his engine technology is not just for the small passenger vehicles that Clifford is aiming at, but could easily replace the 300-horsepower brutes in today's SUVs. That would make it appealing to automakers like GM and Ford, who are seeing sales of their gas-guzzling SUVs and pickup trucks begin to tank because of exorbitant fuel prices.
THE DISRUPTOR: COGHEAD
THE INNOVATION: Easy-to-use tools for building customized business applications
THE DISRUPTED: Initially, custom-software developers, but potentially almost all software-tool makers
What if the next time you longed for a piece of software to help you do your job, you didn't have to grovel before IT or shell out big bucks to outside consultants? What if you could simply create the software yourself, in a few easy steps? That's the promise of Coghead, an online tool due out this month that promises a hassle-free world of roll-your-own apps.
Using Coghead requires only basic computer literacy. The company says anyone who can code a simple Excel macro should have little trouble using Coghead to create even sophisticated enterprise apps like logistics trackers, CRM programs, or project management systems. A user logs on to Coghead's website and drags and drops a few buttons and labels onto a form, indicates relationships between the form's drop-down menus and text boxes, groups appropriate elements by drawing boxes around them - and then launches the apps. "From my experience so far, the product is incredibly easy to use," says Liz Amaral, product management vice president at InsideTrack, a San Francisco firm that offers coaching services to college students and has been beta-testing Coghead.
Coghead boasts an impressive entrepreneurial pedigree. Chief executive Paul McNamara is a former exec at computer graphics pioneer SGI and at open-source software leader Red Hat (Charts); CTO Greg Olsen co-founded Extricity, a business-integration software firm that Peregrine Systems bought for $227 million in 2001. They believe that they'll initially take business from software consultants and outsourcing firms that specialize in small, customized-software projects. But ultimately, Coghead could undermine much bigger markets and much bigger names, including the likes of Microsoft (Charts) and Sun (Charts). "Any big software player is a potential target for their disruption," says VC Charles Beeler, whose firm, El Dorado Ventures, last year invested $3.2 million in Coghead.
More fundamentally, Coghead could completely upend the balance of power in the software game - putting users, and not coders, in ascendancy. "Today, highly trained programmers are the gatekeepers for custom apps," McNamara says. "Coghead will enable nonprogrammers to rapidly create their own custom business software, allowing the people closest to the need to create the solution."
THE DISRUPTOR: NEXTMEDIUM
THE INNOVATION: Automated product placement in movies and TV shows through an online exchange
THE DISRUPTED: The 30-second spot, producers of TV commercials, and advertising agencies
In a story in our last issue ("The 20 Smartest Companies to Start Now," September), we noted that VCs would line up to fund anyone who could create an online marketplace that automates the sale of product placement for Hollywood studios. We were onto something: NextMedium is just such a startup, and it's turning heads in Silicon Valley and Tinseltown alike.
Founded by former North Carolina venture capitalist Hamett Watt, NextMedium arose in response to a problem bedeviling entertainment companies. The value of the mainstay 30-second TV spot is eroding. The roughly $50 billion spent last year on TV ads is at risk because of the advent of commercial-skipping digital video recorders, as well as the lure of the Internet and videogames. David Cowan of Bessemer Venture Partners wants to take advantage of all this turmoil. "We see technology playing a role to enable new business models to displace the market that previously existed for the 30-second spot," says Cowan, who has invested in NextMedium.
NextMedium automates and standardizes the process of product placement in TV shows, movies, and videogames. Estimated at $2 billion, product placement today is a relatively small, ad hoc segment of advertising. Too often it relies on Hollywood agents cutting back-lot deals to sneak their clients' products into a shot. But on the NextMedium website, movie studios, TV networks, and videogame producers can upload excerpts of scripts or specific product placement requests - say, a black SUV for Jack Bauer in an episode of 24. Advertisers can search through the requests to evaluate and bid on the available placement opportunities. Before a deal is done, NextMedium's site also allows for the director or other creative professional to approve and sign off on each placement. Then, in collaboration with Nielsen Media Research, NextMedium will measure the exposure of that placement by determining how many people saw it and how a brand's total exposure compares with that of competitors.
The beauty of product placement, a.k.a. brand integration, is that viewers can't TiVo past it because it's part of the show, and it lives on in any reruns or DVDs. "The reason that brand integration has been such voodoo," Cowan says, "is that brand marketers couldn't predict what the exposure would be like or do it multiple times." With NextMedium, marketers can, say, make a dozen placements for every hour of television. "Product placement," Watt says, "can erupt as the most powerful medium in the world."
THE DISRUPTOR: APPLIED LOCATION
THE INNOVATION: A satellite-based system for toll collection, traffic congestion management, and pay-as-you-drive insurance
THE DISRUPTED: Traffic congestion, toll collectors, parking meters, and RFID-based systems like E-ZPass
Traffic congestion sucks an estimated $63 billion a year out of the U.S. economy in the form of wasted fuel and time stuck in traffic. Anyone who's ever zoomed through a tollbooth thanks to an E-ZPass knows there's a better way.
But what if instead of a wireless radio-frequency ID tag attached to your windshield, the device was based on global navigation satellite systems like GPS and Galileo? Bern Grush, the founder of Toronto-based Applied Location, thinks it would open up all sorts of new possibilities - from congestion management and meterless parking to pay-as-you-drive insurance. "It changes the game for drivers and insurance companies, and it creates a new market," suggests Michael Urlocker, a consultant who writes a blog called On Disruption.
Grush calls his system Skymeter. He says he's created an algorithm that corrects for the noise and missed signals to which GPS is prone, especially in urban canyons, so Skymeter can reliably pinpoint a car's location to within 1.5 meters. Once that becomes possible, cities can start to manage traffic better by charging more for driving during peak times. (London already does this, but with an expensive system of cameras.) "The problem is congestion," Grush says. "We need to send pricing signals to motorists to drive at alternate times."
Skymeter is disruptive more for the new economic models it might spur than for what it might displace. For instance, in addition to congestion tolls, it could be used to charge for parking anywhere in a city, even where there are no meters. Or the technology could enable insurance companies to offer better rates to safer drivers, since it records speed, time of day, and driving route.
Grush is still almost a year away from a finished product, but he has $250,000 in seed money from family and a government grant, and traffic directors from Toronto to London have expressed interest in testing Skymeter as soon as it's ready. Grush thinks his product could ultimately help to supplement or even replace the fuel tax now used to pay for the upkeep of our roads. "The need to fix road financing and congestion is so acute," he argues, "that a dramatic shift will necessarily occur."
THE DISRUPTOR: SALESFORCE.COM
THE INNOVATION: AppExchange 2.0 fills the gap between Web-based and traditional enterprise apps
THE DISRUPTED: Microsoft, Oracle, SAP, and other enterprise software incumbents
Marc Benioff, CEO of Salesforce.com, is now proclaiming that he's going to demolish the $15 billion traditional database market.
So what, you ask? It's true that Benioff is known throughout the tech business for his bombast, and he's always predicting that Salesforce is about to do something amazing. But he's not all talk: Benioff has already built Salesforce.com into the world's most successful Web-based customer-relationship management software, which currently boasts 25,000 customers and more than half a million individual subscribers. His approach, selling industrial-strength corporate apps as a service over the Web, helped to drive his biggest rival, Siebel Systems, to sell itself to Oracle (Charts) last year. To top that, Benioff launched a service called App Exchange as a way to attract software developers to build their own Web-based enterprise applications atop Salesforce.com's infrastructure.
But that's not enough disruption for Benioff. The types of applications that can be built and fully hosted on AppExchange today are still no match for traditional enterprise software built on an Oracle or Microsoft database. "Our database is not intelligent," Benioff says. He means that AppExchange cannot apply logic or rules to the data sent to it; powerful Microsoft and Oracle databases can.
With AppExchange 2.0, which Benioff plans to unveil this month, Salesforce.com will begin to close that gap. The details are mind-numbing, but Benioff's engineers have come up with a way to enable AppExchange to host both the data and the logic. "We are going to show you why you don't need to buy a database," Benioff vows. AppExchange, he explains, will be the database and the tools all rolled into one; it also, he says, will go a long way toward becoming a fully formed Web operating system, a holy grail for software mavens almost since the Internet arose.
To maximize AppExchange's power, Benioff needs more apps. In a creative twist, he is leasing a former Siebel facility in San Mateo, Calif., visible from Highway 101, Silicon Valley's main artery, which he plans to turn into a kind of incubator for apps development. He'll lease cubicles for $20,000 a year to startups that want to build their businesses on top of his Web operating system. Salesforce.com will provide onsite programmers to help with coding questions, expose the startups to potential customers, and help them market their services. "The future of technology is all lower cost and easier usage," Benioff says. "We will destroy Oracle and SAP because they won't be able to respond to the innovation we are about to unleash."
THE DISRUPTOR: BLUELITHIUM
THE INNOVATION: Serving highly targeted ads on the Web by monitoring everyone's clickstreams
THE DISRUPTED: Google and plain-vanilla CPM ad networks like ValueClick and 24/7 Real Media
It's not often that you find a startup CEO openly mocking Google. But Gurbaksh Chahal, founder of BlueLithium, thinks Google is a one-trick pony when it comes to Web ads. "They've miserably failed in the last year with display ads," he notes, "because they look at the world through text advertising." It's big talk - and you'd be tempted to dismiss Chahal entirely were it not for his claim that BlueLithium has been profitable since its third month of operation and is on track to hit $100 million in revenue by the end of next year.
Google's better-performing text ads created a huge shift of marketing budgets away from other online ads, as well as from print, radio, and TV. But Chahal thinks the pendulum is about to swing again. He says he's carving out a new space for online advertising, helping to bring back the banner ad by making it the vehicle through which marketers can, in effect, watch the audience.
BlueLithium was founded in 2004 and already serves up 8 billion ad impressions a month to 100 million users of the Web's top sites. Each of those ads drops a cookie on your browser, and when you show up on another site that serves BlueLithium ads or on one of its advertisers' websites, it adds that history of clicks to its database. Using this "clickstream" data, it determines within 10 milliseconds which ad to serve up the next time you come to any of the 1,000 handpicked sites where it buys ad inventory.
By building a picture of your clickstream, BlueLithium can target you individually. "The more we see you, the more we know about you," Chahal says. He might not know your name or address, but he knows what sites you've visited, what ads you've clicked on, and what ads other people with similar clickstreams have clicked on. Most display ads on the Web are random because they're targeted to the site, not to the viewer. But if you visit T-Mobile's website to check out pricing plans and then click off to a news site, BlueLithium might show you a T-Mobile ad even though you're now reading about Iraq. Chahal is also using BlueLithium's 100 million clickstream histories to direct behaviorally targeted video ads.
Couldn't Google do the same kind of thing? "They might be coming out with the next microwave too," Chahal quips, "at the rate they're going." Chahal knows that Google was a classic disruptor. But in his view, this time around Google is the incumbent - and Chahal has the disruptor's advantage.
THE DISRUPTOR: CLEARWIRE
THE INNOVATION: National Wi-Max broadband wireless service
THE DISRUPTED: Telecom and cable companies
It's almost a given these days that Clearwire, the Wi-Max wireless network founded by cellular pioneer Craig McCaw, will shake up the wireless broadband sector. "If anyone is going to do it, it's going to be Clearwire," says Joe Laszlo, a senior broadband analyst at Jupiter Research in New York. "They've got the best technology, great financing, and a lock on nationwide spectrum." The only real question seems to be how deep into the telecom establishment the shock waves from McCaw's latest bit of disruption will penetrate.
Clearwire's initial goal is to create a nationwide broadband wireless network based on Wi-Max, a more powerful relative of Wi-Fi technology. Because Wi-Max infrastructure is much cheaper to build and maintain than traditional networks, some analysts think Clearwire will be able to seriously undercut the broadband prices of Comcast (Charts), Verizon (Charts), and their ilk. But the threat posed by McCaw's strategy could be much greater than just price pressure. Clearwire's approach could put in jeopardy the billions of dollars that telecoms and cable operators are pouring into upgrading their existing broadband networks. And in theory at least, Clearwire could eventually offer the cutting-edge services that telecoms and cable companies are angling for - Web-based TV, movies on phones, VOIP calls, and the like. Clearwire is already offering VOIP phone service to 13 markets, and some expect the startup to partner with mobile-phone, IPTV, or satellite-TV companies to further expand its range of services. (Full disclosure: AOL, owned by the parent company of Business 2.0, is a reseller of Clearwire Wi-Max service.) "Filling a need that others aren't addressing has always been a focus of the McCaw companies," says McCaw's co-chief executive officer, Ben Wolff. "We are creating a brand-new category."
Certainly, the press-shy McCaw knows a thing or two about shaping disruptive networks. He began building the country's first national cellular network in the early 1980s, eventually selling it to AT&T for $11.5 billion. With Clearwire, McCaw has moved on to Wi-Max. Wi-Max has big technical advantages over other fast pipes, particularly Wi-Fi. Unlike Wi-Fi, it operates on a licensed spectrum, making the service far more reliable. The range of Wi-Fi signals is measured in hundreds of feet; Wi-Max's range is measured in miles.
Clearwire already offers basic Wi-Max broadband service in Brussels, Dublin, and 27 U.S. metropolitan markets covering more than 200 cities and towns. Its network had 100,000 subscribers at the end of March. (The company won't say how many new subscribers it has added since then or disclose financial details.) Clearwire also has made the installation process, often a painful hassle for Wi-Fi users, consumer-friendly with Wi-Max. A customer plugs a paperback-size modem into a power source and into a computer (via Ethernet) and the network is good to go. "It's a very simple process for a consumer to get up and running," says Jupiter's Laszlo.
Clearwire has challengers, notably Sprint, which expects to spend as much as $3 billion in the next two years building a rival Wi-Max network and currently owns more spectrum than Clearwire. But Clearwire has powerful backers: In July, Intel and Motorola pumped $900 million into the company, a measure of their faith in McCaw's approach - and of their hunger to sell chips and other gear that make Wi-Max work if it becomes a mainstream service. Perhaps most important, Clearwire has McCaw. "Disruptive," says Rich Begert, CEO of Wireless Services and a former McCaw executive, "is the best way to describe Craig."
THE DISRUPTOR: ZOPA
THE INNOVATION: Peer-to-peer lending
THE DISRUPTED: Traditional banks
Any industry making a huge profit margin off its customers is a good candidate for disruption. Banking is a classic case - just think of the 19 percent interest you pay on credit cards and the 2 percent you earn on your savings account.
Zopa is closing that gap by using the Web to allow personal lending on a massive scale. The startup was the first company to introduce peer-to-peer lending in the United Kingdom 18 months ago and is about to launch in America. "What Skype did to telecoms, this could do to banks," says David Cowan of Bessemer Venture Partners, which contributed some of the $31 million in funding the startup has attracted to date.
Scott Anthony, a managing director of Clayton Christensen's consulting firm, Innosight, is intrigued by the disruptive potential of peer-to-peer lending. "Are there ways to loan amounts that banks won't lend because they're too small," he asks, "or to serve customers who would otherwise never be served?"
The idea is simple. People join Zopa online as either borrowers or lenders. The lenders proffer money not to individuals but to a pool of people grouped together because of similar creditworthiness. Zopa assesses the credit risk of the borrowers, pools the capital, and matches consumers who need money with consumers who want to lend it. Since Zopa is not technically a bank and doesn't lend money itself, the capital requirements to run the business are relatively small.
The average interest rate on a Zopa loan is 7 percent. For the lenders, that's much better than even a CD, and for the borrowers, it sure beats a credit card or most bank loans. Zopa takes a 1 percent fee, split between the borrower and the lender. So far, about 90,000 people have signed up, and more than $100,000 is lent every day (totaling more than $10 million so far). And only 0.05 percent of Zopa's loans have turned into uncollectible debts.
"We are moving from a consumer society of mass production to a society where we are defined more as individuals," says Zopa CEO Richard Duvall. Yet in banking, Duvall points out, "there are still enormous corporations controlling our money." Duvall believes that a nimble Zopa can trounce banks in assessing credit by gauging things that banks typically don't review, such as a person's eBay ratings. And he's injecting a social aspect into lending. Just as in a social network, lenders can read the online profiles of the people borrowing their money. "If I borrow from real people," Duvall says, "I'm more likely to pay back than if I borrow from a faceless bank."
THE DISRUPTOR: JAJAH
THE INNOVATION: Free phone calls over the Web with no downloads, headsets, or adapters
THE DISRUPTED: Telecoms and existing VOIP services such as Skype
So you thought VOIP was disruptive? How about making free calls from your desk or mobile phone - with no downloads, headsets, or even broadband? Building on the existing disruptive force of VOIP technology, Jajah has hit the market with a new level of simplicity likely to encourage mass adoption of VOIP, disrupting revenue models for telecoms and VOIP startups alike.
"We see Jajah as Voice 2.0, the next generation of VOIP," says co-founder Roman Scharf, a Viennese entrepreneur who sold his last company in a deal he values at roughly $100 million.
He and partner Daniel Mattes, the startup's technical brains, formed Jajah late in 2004. Based on an early version of its service that debuted in July 2005, Jajah got $3 million in funding from Sequoia Capital. Relaunched in February, Jajah now has nearly a million paying customers, according to Venky Ganesan, a managing director at Globespan Capital Partners, another investor. He says Jajah's paying-customer numbers already rival those of Web telephony pioneer Skype. (Skype does not disclose paying-customer numbers.) "Jajah removes all the drawbacks from the existing VOIP solutions," Ganesan says. "Its growth rate is phenomenal."
Here's how Jajah works: Let's say Jane is about to leave work in San Francisco and wants to call Philippe in Paris. She enters nothing more than her mobile number and Philippe's home number at Jajah.com and clicks the "Call" button. Her mobile rings, and a voice explains that Jajah is connecting the call. Then Philippe's phone rings in his Left Bank flat. He picks up, and the two can speak for free.
Economically, there are two tricks to making this work. First, the Mountain View, Calif., firm does charge for some calls - to European mobile phones, for example - and for services such as conference calls. On average, Scharf says, Jajah is making $10 monthly from each paying customer. These fees subsidize the free calls.
Jajah has cut deals with many telecoms for access to cheap local "last-mile" connections; only the long-distance part of the call goes over the Web. That's a huge advantage, since calls received over regular phones are generally of high quality. Users of Skype and similar services typically receive calls over a computer or require cumbersome phone adapters or software downloads, and computer-based call quality can be shoddy.
VOIP companies that route voice calls from end to end over the Web could mimic Jajah's approach. But they would have to completely change their business and technical models. Jajah's method also avoids the firewall troubles that many other VOIP systems encounter as their calls come in solely over the Web. Ultimately, Jajah expects to take the computer completely out of the call equation; increasingly, people can access the Web by phone, so Jajah customers won't even need a computer to input the initial call.
THE DISRUPTOR: NANOLIFE SCIENCES
THE INNOVATION: More precise cancer treatment that's less destructive to healthy tissue
THE DISRUPTED: Conventional cancer treatments such as radiation and chemotherapy
For many cancer patients, the treatment feels worse than the disease. Radiation and chemotherapy can have debilitating side effects and often destroy healthy tissue as well as tumors.
Thus the strong allure of a potentially revolutionary cancer treatment under development by NanoLife, a startup based in Newport Beach, Calif. NanoLife's approach builds on the cutting edge technology of using protons rather than X-rays to attack cancerous masses, but takes it many steps further. If NanoLife's science pans out, it could transform what is now a five-week course of radiation therapy into a few afternoons' work.
Unlike X-rays, protons have weight and mass. This means that a proton beam generated by a proton accelerator can stop inside a tumor and deliver its lethal force without destroying healthy tissue by exiting the body, as X-ray beams do. Protons have been gaining importance in cancer treatment for years, and NanoLife currently plans to open proton treatment centers around the world. The first may open by 2010.
But the truly disruptive potential of NanoLife lies in its plans to go beyond proton therapy, and instead use antiprotons to treat cancer. The idea is to create a device that can deliver a stream of antiprotons into a tumor. The laws of physics decree that the antiprotons will attract the protons within the tumor; when they collide, they annihilate one another, destroying the tumor in the bargain. Wild as it may sound, lab and animal tissue testing have shown promise.
Antiproton therapy is at least seven years off and would be expensive - a single particle accelerator required to produce antiprotons could cost hundreds of millions of dollars. But the approach already has some cancer fighters buzzing. "The theory and physics behind it justify wanting to do it," says David Bush, vice chairman of the radiation medicine department at California's Loma Linda Medical Center, a top proton therapy center. "The concept is valid."
NanoLife president Ray Winn, a veteran of the nuclear and semiconductor industries, envisions someday converting his company's proton treatment centers into antiproton centers and treating thousands of patients throughout the world. It's a big dream, but if anything like it ever comes to pass, think of the implications: antiprotons disrupting death itself. Now that's one bit of disruption even William Orton and J.P. Morgan could've instantly grasped.
EEStor's potentially revolutionary ultra-capacitor could be so cheap to operate that it gives electric cars a dominant economic edge over the internal combustion engine.
[*] Electricity cost converted to gasoline equivalent.
Erick Schonfeld (email@example.com) is an editor-at-large at Business 2.0. Jeanette Borzo is a frequent contributor.
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Applied Location's Skymeter system uses GPS and wireless technologies to fight traffic mayhem.
1 By tracking location and time of day, cities using Skymeter could charge drivers higher tolls to enter and leave jammed areas at rush hour as an incentive to get them to travel more at off-peak times, when they would be charged less.
2 To encourage drivers to free up scarce parking spots, cities could use Skymeter to charge cheap rates that escalate over a period of time - say, 2 cents a minute for the first hour, 5 cents a minute for a second hour, and 20 cents a minute after that.
3 Insurance companies could use Skymeter to closely track driving patterns and adjust prices accordingly. Drive 90 mph down crowded thoroughfares with high accident rates and your monthly bill could be $450; drive more slowly on safer side streets and the bill might be $100.
CREDIT WHERE IT'S DUE
Zopa's online system for matching lenders and borrowers could revolutionize banking.
1 An entrepreneur named Jerry has an extra $25,000 that he wants to put to work. He transfers it to his Zopa account and agrees to lend it to borrowers with top credit ratings at 7 percent for one year.
2 To reduce risk further, Zopa slices Jerry's cash into 50 chunks of $500 each and funds 50 different loans to a pool of qualified borrowers.
3 In a twist copied from social networks, Jerry can read profiles of prospective borrowers and what they intend to use the money for, and borrowers can learn about Jerry through his Zopa profile. This fosters a personal connection between borrower and lender that may contribute to low default rates (only 0.05% in the United Kingdom to date).
4 Zopa processes payments and sends Jerry a single monthly check.
WEAPONS OF MASS DESTRUCTION
NanoLife antiproton therapy could kill cancerous tumors with almost none of the nasty side effects that accompany radiation treatments.
1 A precisely targeted beam of antiprotons is fired into a tumor.
2 The antiprotons collide with the protons in the tumor; their resulting mutual annihilation destroys the mass.click here.