Tesla Motors Inc (TSLA), Netflix, Inc. (NFLX) & Five Game-Changing Companies to Watch

In his 1997 book, “The Innovator’s Dilemma,” Clayton Christensen defines a “disruptive innovation” as an innovation that creates a new value network and by doing so, disrupts an existing market value network.  For investors, disruptive innovations make for appealing opportunities.  Whether it be a small startup hitting a giant at the knees, or a giant undercutting another giant, disruptive innovations create opportunities for significant increases in market share.  In this article, I will present five companies that are developing disruptive innovations.

1.Tesla Motors

So what?

We’ve had electric cars before, so what’s the big deal with Tesla Motors Inc (NASDAQ:TSLA)?

Electric Network: Tesla Motors Inc (NASDAQ:TSLA) is addressing the lack of electric infrastructure by teaming up with SolarCity Corp (NASDAQ:SCTY) to build a network of Supercharger stations.  These stations charge at 120kW, providing 200 miles of range in just thirty minutes.  The Supercharger network is projected to reach 98% of the U.S. population and some parts of Canada by 2015.

Performance: The Model S is no Honda Insight.  With 443 lb-ft of torque available at 0 RPM, the Model S outruns a BMW M5, making the Tesla Motors Inc (NASDAQ:TSLA) desirable not just to environmentalists, but to enthusiasts as well.

Production: The Model S Q1 production total exceeded that of the Chevy Volt and Nissan Leaf.  General Motors CEO, Dan Akerson, recently put together a special team to keep an eye on Tesla.

Future Plans: With plans for a more affordable Model X available in 2014, Tesla will expand down market into lower income homes.

2. 3D Systems

So what?

Current Accolades: Regardless of the technology’s ability to overcome the previously mentioned challenges, the ability to move from brainstorming to prototype within a day allows for quick iterations in the product design cycle – which is very valuable to engineering companies.

Expansion: 3D printing is also slowly penetrating the public market through sales of small 3D printers such as the 3D Systems Corporation (NYSE:DDD) Cube, the Makerbot Replicator, or the Formlabs Form1.  While prices for these machines are still out of the reach of the general public, adoption within the hobbyist market will help drive prices down.

3. Zillow

So what?

100 Million: Zillow Inc (NASDAQ:Z) currently hosts photos, aerial views, information on local real estate markets, and historical home values for over 100 million homes in the U.S.

Expanding Services: Zillow Inc (NASDAQ:Z) also provides advice and support on mortgage rates, neighborhood information (schools, demographics, etc.), and Zestimates (home market value estimates).

4. Sodastream

So what?

Lowering Costs: With the Sodastream International Ltd (NASDAQ:SODA) Source, a can of soda is said to only cost $0.25 per can.  One carbonator cartridge makes 60 or 110 liters – equivalent to 170 or 310 aluminum cans. Sodastream International Ltd (NASDAQ:SODA) provides an affordable alternative to traditional soft drinks.

5. Netflix

So what?

Binge Viewing: Netflix, Inc. (NASDAQ:NFLX) is sporting 29.2 million subscribers.  These subscribers have spent a combined 2 billion hours watching streamed video online.

Shear Volume: 30% of all U.S. internet traffic during peak hours uses Netflix.

Conclusion: Why look for disruptive companies?

Disruptive companies are game-changers – the type of companies that fit into Apple’s “Think Different” category.  These companies redefine industries by creating new value networks.  Previously disruptive companies include Apple, eBay, and Amazon – all of which have seen tremendous stock growth.  In this article, I have presented five disruptive companies that are still early on in their growth stories.  Table 1 below explains why disruptive companies make rewarding investments.

The article 5 Game-Changing Companies to Watch originally appeared on Fool.com and is written by Robinson Greig.

Robinson Greig owns shares of Tesla Motors , 3D Systems, and SodaStream. The Motley Fool recommends 3D Systems, Netflix, SodaStream, Tesla Motors , and Zillow. The Motley Fool owns shares of 3D Systems, Netflix, SodaStream, Tesla Motors , and Zillow and has the following options: short January 2014 $36 calls on 3D Systems and short January 2014 $20 puts on 3D Systems. Robinson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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