Disruptive technologies don't come around every day. But when they do, they can not only change users' lives, but also create handsome profits for investors. All you need to shake the foundations of the tech world is a culture of innovation, a few good ideas, and a little bit of luck.
Yesterday's disruptions
Microsoft
|
Company |
Disruptive Innovation |
Stock Performance |
|---|---|---|
| Microsoft | Windows Operating System | IPO – End of year 1999 59,956% |
| Apple | iPod, iPhone, iPad | 1998-Present 9,062% |
| Search Engine combined with keyword advertising | IPO – Present 596% |
Microsoft started controlling the PC operating system market in the mid-80s, and that domination only got stronger throughout 2000. If you remember the days before Microsoft was Apple and Google's nemesis, the company actually had some pretty incredible programs (even if you argue Apple's were better).
Apple has disrupted the world a few times, but I've focused here on the last 12 years, when the company became more than the Mac. Its technology has become so ubiquitous that I might be lost (literally) without it. A friend asked me recently whether I'd be more worried if I lost my wallet, keys or cell phone. Who would have thought that my cell phone would even be part of that list 12 years ago?
Google may be more interwoven in our lives than we care to admit. Its search engine is not only on our computers, but also on our phones, and now (in a few cases) on our TVs. Google also provides the ads we see on the Internet all day long, and if Big G has its way, its integration into our lives will only expand.
Tomorrow's disruptions
To see future innovators, you need to seek more than the best balance sheet or return on equity. You must find companies with a culture of innovation where new ideas can flourish; financial returns will follow. A decade ago, Apple was a niche computer company with an eccentric CEO and a booming culture of innovation. Today, it's a central part of millions of people's lives.
So who will deliver the next disruptive technology? You could point to Motley Fool favorites such as Netflix
|
Company |
What They Do |
Why They're Disruptive |
|---|---|---|
|
Tesla Motors |
Electric vehicles and drivetrains | The auto business is transitioning to more electric vehicles, and Tesla is out front. |
|
Universal Display |
OLED screens | Inexpensive flexible displays open a world of possibilities. |
| Social network | Can anyone under 30 live without Facebook anymore? |
Tesla Motors could change the auto industry as much as any development since Henry Ford's assembly line. It has a head start on electric vehicles, owns the distribution network, and has begun to supply industry titans like Toyota.
Universal Display has only begun to scratch the surface of its potential in OLED screens. If the promise of these screens holds true, you could see multimedia screens wrapped around curved surfaces, new lighting solutions, and cell phone screens that are nearly impossible to break.
Facebook, although not public yet, couldn't be following in Microsoft's footsteps any more closely. A Harvard student creates a tech product that becomes integral to our lives, drops out, moves to the West Coast and becomes the richest person on earth -- although for Mark Zuckerberg, that last development is still pending. But seriously, I'm concerned that Facebook will soon rule my life.
Those are three companies I think have the ability to build technologies that will continue to change our lives. Now it's time for you to weigh in. Tell us who you think is creating a disruptive technology, and which company will become the next decade's rocket stock.
