Want to make a billion dollars? The easiest way is to disrupt an existing industry through innovation, and I outline the formula to do this in The Disruption Formula. In the book I outline the three levers of the customer experience, cheaper, faster, or better, that when 10X'd through innovation create an unfair competitive advantage and lead to market disruption.
I recently went back and reread every case study in the book (all 36 of them) and I want to be honest about something the data makes obvious: while any of the three, cheaper, faster, or better, can work, the majority of the case studies and examples I've found of true innovation disruption come from making something 10X cheaper.
A great example, and the timing is perfect. This week SpaceX is set to go public on June 12 at around a $1.75 trillion valuation, the biggest IPO in history. Before SpaceX, putting a kilogram into orbit cost around $54,000 on the Space Shuttle. Today a Falcon 9 does it for under $3,000. That's nearly 20X cheaper, and Starship is aiming far lower than that.
If I were starting a business today with the single goal of creating as large a business as I could, I wouldn't burn my energy chasing a slicker product or a faster turnaround. I'd point all of it at one question: how do I deliver the same thing for a fraction of the cost?
What "10X cheaper" actually looks like
Below are some of the case studies in the book. None of these companies invented anything. They re-architected the cost of something that already existed:
Robinhood: $10 a trade → $0
WhatsApp: $0.44 per international text → free
Ford Model T: $2,000 → $260
Dell: a $3,000 PC → under $800
Wise: 5%+ in transfer fees → 1%
iTunes: a $15 album → $0.99 for the one song you wanted
TurboTax: a $300+ CPA → under $100
Redbox: $4 rentals → $1
Look at that list again. Not one of them built a better mousetrap. Ford didn't invent the car. Robinhood didn't invent trading. Apple didn't invent the song. They each found one expensive, gate-kept part of the experience and dropped the price by an order of magnitude for consumers. The product stayed roughly the same. The cost to the consumer is what they disrupted.
This is NOT a race to the bottom
I need to be loud about this, because it's where most people get it wrong.
Cheaper does not mean lowering your price and eating the margin. That's discounting. That's a race to the bottom, and it ends with everyone broke.
Disruptive cheaper means using innovation to reduce your cost structure, so you can charge the customer dramatically less while keeping your margins the same or even improving them. That's the entire difference between a discount brand and a disruptor.
The companies above didn't slash prices and pray. They re-engineered the economics:
Robinhood gave away free trades and made money on payment for order flow. Wise dropped fees to a fraction of the banks' by matching transfers peer-to-peer and never moving money across borders at all. Dell sold for a third of the price by going direct and building to order, no retail markup, no dead inventory.
Same customer experience. Radically lower cost to deliver it. Margins intact. That's the move.
And it's backed by how people actually buy. In a global PwC survey, 61% of consumers named price as the single most important factor in their purchasing decisions, ahead of quality, convenience, and brand. Price isn't just a path to disruption. It's the most direct one there is.
Why cheaper makes everything else easier
Here's the part that doesn't get talked about enough. When your product is meaningfully cheaper than everyone else's, the rest of your business gets easier:
Sales barely needs selling. A rep offering the same thing for half the price isn't overcoming objections, they're taking orders.
Marketing writes itself. "Same trade, $0 instead of $10" doesn't need a clever campaign. The number is the campaign.
Raising capital gets simpler. Investors understand "10X cheaper, same product" in one sentence. No 40-slide deck required.
Cheaper is a tailwind that touches every function. Faster and better can be hard to even explain. Cheaper, the customer feels instantly.
Newcomer advantage
And here's the kicker. The reason cheaper is your opportunity if you're an outsider: incumbents almost never pull this lever.
A big company can't voluntarily cut its own prices 10X. Doing so would gut its top-line revenue overnight. Every forecast collapses, every comp plan tied to revenue blows up, the board revolts, the stock craters. Kodak literally invented the digital camera and shelved it, because digital meant fewer film sales. The innovation that could've saved them got smothered to protect this quarter's numbers.
You don't have that baggage. No legacy revenue to protect, no product line to cannibalize, no board screaming about the dip. You're free to rebuild the economics from zero, which is exactly why disruption through price almost always comes from the newcomer.
So if you're hunting for where to compete: find an industry where the status quo is expensive, ask "what's stopping the current players from making this 10X cheaper?" The answer will almost always be legacy. That's not a red flag. That's the signal.
The AI advantage
If I were hunting for an industry to disrupt through innovation today, I wouldn't waste a second looking anywhere else. I'd look straight at AI, and specifically at the chasm between Stage 2 and Stage 3 businesses. I wrote about this at length in The AI Chasm.
Right now most white-collar firms are stuck in Stage 2: humans doing the work, assisted by AI. The opportunity is to start in Stage 3, AI-first, on the other side of the cliff they can't cross. Build the company there from day one, then pass the savings straight to the customer. That's how you end up 10X cheaper than every incumbent in the industry.
A traditional tax firm charges thousands to prepare a return, because ten hours of human time went into it. An AI-first firm does the same return with ten minutes of human review, at a fraction of the cost to produce. Same return, far less to deliver. That's not a discount. That's a rebuilt cost structure. The exact move we've been talking about.
And the incumbents can't follow. For a traditional firm to charge a fraction of what it used to, it would need to fire most of its staff, break an office lease sized for all those people, tear up an org chart built for the old model, rewrite its compensation plans, pretty much rebuild everything in the business. New entrants never hired those people or signed that lease in the first place, so they start with a clean slate.
Buy the book
This is just one slice of the framework. In The Disruption Formula, I break down the full system for finding your 10X advantage, including how to map your industry's status quo, write your "Essential Question," and choose which lever to pull, plus 25+ full case studies of companies that used it to dominate their markets.
The one favor I ask: just read the introduction to the book, which I've posted for free here, and learn how Barrett Ersek disrupted lawn care and changed my life in the process. That's it, just read the introduction, and I think you'll be hooked.