Disruptive innovation: the Mama Shelter case

In June 2011, I co-wrote with Laurence Lehmann Ortega an article that was published in the Expansion Management Review. Here is a summary of this article:

A disruptive innovation in the hotel market:

Disruptive innovations are not confined to new technologies. Disruptive strategies are possible in domains as varied as the hotel industry, the fund transportation industry, the food industry… They bring long-lasting success to those businesses that take the leap.

According to conventional business strategy, you have a choice amongst :
- Differentiating yourself upwards (providing more for more money) or
- Differentiating yourself downwards (low-cost strategies)
But you can also innovate by providing more for cheaper!
That was the successful gamble of the Mama Shelter, a very special hotel.

The Mama Shelter combines luxury and low costs. It provides high quality bedding, but gets rid of all unnecessary furniture. Every effort is made to prompt guests to meet each other in the homely and welcoming public spaces. There the furnishings and catering is high quality but the prices are low. Its economic model is profitable after 2 years of commercial activity.

4 pieces of advice about disruptive innovation:

1. Preempt a market that does not exist yet:
   You have to detect and decipher up-and-coming trends, like an anthropologist deciphers communities and cultures. Conventional market research is ineffective for this…


2. Question existing recipes for success:
   Disruptive innovation projects do not fit in any existing category. The Mama Shelter defies the conventional rules and trade-offs of the hotel industry and creates a new business model. In order to elaborate a disruptive strategy, you must question the conventional logic in your sector.


3. Create dynamics spurred by passion.
   You have to surround yourself with creative, passionate and versatile partners. For the Mama Shelter, Serge Trigano drew Philippe Stark and the chef Senderens to himself. Employees and pioneering customers came, passionate about the idea of getting off the beaten track. It was a process of open innovation, more effective than innovating alone.


4. Thinking big while starting small :
   You first have to test the concept: open a first location, do a try-run.  You are then in a trail-and-error mode. You can therefore polish the concept before you deploy it on a larger scale. Your disruptive strategy covers the needs of a vast market. Starting small by creating a new market that has big potential allows you to acquire a competitive advantage: your competitors de not understand your concept right away. Once they do, you are already a lap ahead… And they will struggle to copy you…

This article was published in the Expansion Management Review:  "Innovation de rupture, l'exemple du Mama Shelter"

Benoit Sarazin