Disruptive innovations always get their start by targeting less-demanding customers or customers that had previously gone entirely unserved. These customers are critical to the process of disruptive innovation because they provide the disruptors with opportunities that are uninteresting or unattractive to established players. By serving these customers, the disruptive innovation can take root and improve over time without becoming encumbered in early competition with mainstream providers. The differences in how incumbents and disruptors view opportunities to serve new or less-demanding customers is called asymmetric motivation. In short, asymmetric motivation is what allows a disruptive innovation to fly under the radar of the established players in a sector until the transformation of that sector is all but inevitable.
Steel mini mills, for example, got their start by taking advantage of asymmetric motivation. Their first offerings were low-end products like concrete reinforcing bars (rebar). The large, integrated steel mills were happy to cede the rebar market to the mini mills because rebar offered the lowest profit margins of any of the products the integrated mills made. Instead of competing to sell rebar, the integrated mills found it made more sense for them to focus their attention on making high-end products like sheet steel, for which the profit margins were much more rewarding. This gave the mini mills the entry point they needed. Over the years that followed, mini mills figured out how to produce steel rods, then structural steel, and finally sheet steel. Every time the mini mills took on more complicated product lines, the integrated mills continued to cede the market until they had been entirely disrupted.
Similarly, a Taiwanese computer company called ASUSTeK got its start by relying on asymmetric motivation. ASUTeK’s original business was making simple circuit boards for Dell and other computer manufacturers. Over time, as ASUSTeK worked to grow its business, it developed the manufacturing capabilities to build motherboards and then to assemble entire computers. For Dell, outsourcing these manufacturing functions to ASUTeK made sense because it allowed Dell to improve its profits. Dell could make the same revenues with fewer assets on its balance sheet. Eventually, ASUSTeK started circumventing Dell and selling computers directly to customers. In short, asymmetric motivation was the key to ASUSTeK’s ascension in the desktop computer industry. ASUSTeK was motivated to develop the very manufacturing capabilities of which Dell wanted to divest itself.
In the K–12 education sector, circumstances of asymmetric motivation are critical for effectively fostering innovations in online learning. Many policymakers recognize the benefits of online learning and want to see it used to serve students. But online learning still needs time to prove its value to the public before it can become a mainstream option that students, parents, and school leaders naturally seek to leverage for core academic instruction. Unfortunately, some policies—such as those that require students to take an online course to graduate—preemptively set up online learning as a substitute or replacement for traditional brick-and-mortar courses. When this happens, these policies illicit responses from critics who see online learning as a competitive threat to traditional models of instruction. In order to help online learning grow and develop, policymakers should create circumstances where online learning and traditional schools have asymmetric motivation.
Florida Virtual School (FLVS) provides a key example of how policy can help online-learning programs take root as disruptive innovations through asymmetric motivation. FLVS received its early funding through line-item appropriations in the annual state budget. Because FLVS was not initially funded through Florida’s weighted per-pupil education funding formula, brick-and-mortar schools did not lose funding when their students enrolled in FLVS courses. These conditions gave FLVS time to focus on course development and instructional strategies for online learning as well as grow and demonstrate its value without adding any perceived fiscal threat to local districts. When FLVS eventually began receiving funds on a weighted per-pupil basis through the statewide funding formula for K–12 education, it did not receive backlash from brick-and-mortar schools because it had already proven itself to be a viable investment that added value for students and was positioned as a complement, rather than a threat, to brick-and-mortar schools as it focused on filling curriculum gaps and expanding access to additional courses and learning opportunities.
As policymakers consider how to foster online learning through programs such as course choice or state virtual schools, they should be conscious of the competitive conditions under which these programs are established. Online-learning programs face the best prospects for success when they can take root in conditions of asymmetric motivation that keep them from competing initially head-to-head with traditional brick-and-mortar schools. Although policies that create asymmetric motivation may at first seem to limit the potential impact of online learning, they can actually provide it with the foothold it needs to establish itself. From that foothold, online learning can then begin an improvement trajectory toward the point where it can demonstrate its value in mainstream education.
