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Science

Bringing Tech to Market: The Rules of Innovation 170

Posted by jamie from the 1-from-column-e-and-2-from-column-pi dept.
Everyone knows that best-quality plus first-to-market doesn't always equal success. A Harvard prof who specializes in this stuff has a great article in Technology Review that digs a lot deeper, called The Rules of Innovation. It's a look at why some technologies are marketplace success stories and some are forgotten failures -- and more, an attempt at rules which predict which will be which. There are lessons here for the entrenched companies (e.g. Sony) as well as for the disruptive upstarts (e.g. Sony 50 years ago). You have to understand the battlefield to win the war.
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Bringing Tech to Market: The Rules of Innovation More

Bringing Tech to Market: The Rules of Innovation

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  • what? (Score:1, Insightful)

    by cmmwhodi ( 312676 )
    i think the biggest factor boils down to luck...
    • he covered that when he noted the 33% success rate for disruptive and useful innovations from startups.
      that 77% remaining is just bad luck.
      so basically you have a 30% chance of being successful with a new venture based on a new innovative and useful idea. since not every idea is new useful or disruptive that rate is reduced to 10% which is the average success rate for a startup.
      single page view : http://www.technologyreview.com/articles/christens en0602.asp?p=0



    • Lady luck may help you win a lottery ticket, but she does not have the time to help you make your business a success.

      IBM is successful not because of LUCK, but SAVVY MARKETING.

      EXXON is successful not because of LUCK, but the KNOWING OF HOW THE OIL MARKET WORKS.

      The airline industry is in trouble, not because they are LUCKLESS, but because the airline industry has remained STATIC for decades. In other words, the airline industry is failing because THEY CAN'T CATCH UP WITH THE WORLD.

      America is successful not because of LUCK alone. America is successful because of the attitude of the American people - the people who will never take "No" for answer !

      Luck may make a person PROUD, and pride begat failure.

      In a sense, LUCK actually brings FAILURE.

  • What about the SoundBlaster principle? (Score:1, Interesting)

    by Anonymous Coward
    In computers, it's the SoundBlaster principle. If you're first, you win. Even if your technology sucks. Creative Labs was putting out the crappiest soundcards out there for a LONG time - and took the market. Same with Microsoft, and 3dfx... 3dfx managed to blow it, but for the most part, in the computer market, if you don't blow your lead... first wins.

    That's why all the VC's went nuts trying to stake out .COM
    • If you're first, you win.

      VisiCalc was the first electronic spreadsheet. Lotus 1-2-3 destroyed it, and became so successful in the market that at least three competitors (including Excel) supported 1-2-3 keystrokes for compatibility. Excel now dominates.

      WordStar, at one point, was the only viable word processor. Word now dominates.

      Netscape Navigator, at one time, had over 70% of the web browser market share. Internet Explorer now dominates.

      It's not that simple.

      • All of your examples are for software and include Microsoft, who has had a monopoly on the IBM PC right from the get-go. But the parent was referring to hardware and what used to be a competetive market for sound cards. It's apples and oranges.

        But I still disagree that first always wins. Even looking at his soundblaster example, it seems that the lowest price always takes the lions share of the market eventually. It's even starting to happen to Microsoft now.

        So I think it all depends on what time frame you are looking at. In other words how mature the market is.
    • Soundblaster wasn't first.

      I have an original SoundBlaster. 8bit ISA card, anchient, with box. It even sayes AT recomended (ie it will run in an IBM XT (8088) computer).

      It also says 100% Ad-Lib compatable; becuase Ad-Lib came first and Creative Labs SoundBlaster killed them

      And nVidia, ATI, S3, and Matrox were fighting it out for 3d acceleration long before 3dfx came on the scene. Of course they didn't hold a candle to the voodoo card, but they were the first. The nVidia Riva128, ATI Rage - Rage Pro, the S3 Virge (graphics decelerator), and matrox's m3d all predate the voodoo, and for quite a while 3dfx smeared them and took everying but the OEM market away from them. Except matrox for 2D only work...

      Bad examples
      • Yep, you're right. Way back when I was going to buy a soundcard for my familys 16MHz 386 (which at the time was a really high end machine) there wasn't much choice. There were no soundcard drivers with a unified API in DOS, so every game had to support your particular soundcard. And they all supported Adlib. SoundBlaster was Adlib compatible, and had a joystick port. So in the end it was an easy choice.
    • You didn't actually read the article did you? You just wanted to get your post up near the top. Right from the beginning of the article, he explains that sustaining innovation, like soundcards, in generally the realm of established companies, like Creative Labs. Only 6% of the time can a new company compete with the big boys in this way. Being "first" would be a part of that sustaining innovation.

      The odds of success go up to 30% when the new technology is disruptive instead of sustaining. That is, it creates a new market that does not compete directly with the established market and is not attractive to the big boys who would crush you like a grape. Go read the article first if you want to comment on it.
  • Rules of Marketing? The best quality product to market first IS the most innovative, but that doesn't mean it will sell.
  • This is something that's irked me for a while, since I switched over to the Dvorak keyboard layout (see sig for link to more info). The Dvorak layout is more efficient for typing English text than the standard Qwerty layout, but never succeeded due to market inertia.
    • Qwerty was make to be slow and the layout was also designed to reduce jams on the standard typerwriters of the time. There is no way that the Dvorak will take any market share unless you can replace all the keyboards in schools with them because it is next to impossible to get adults who type quickly to change to something that will make them relearn typing just to be a little more efficient in the end.. True geeks need only apply.
    • True, but thanks to the ease of changing keyboard layouts in software there is a loyal, but small (growing?), group of uber-geeks that refuse to use the hand-wrenching monstrosity that is the qwerty keyboard layout. (I doubt that you could find a similar set of users for BETAMAX or 8-tracks.) Unfortunately there isn't anyone making any real money off of dvorak so it hasn't/won't be taking the world by storm. I do plan to have my kids start out with the dvorak layout, though, and save them the misery of qwerty...

      BTW, I use the dvorak layout at home and work, and on my linux boxes I actually use a modified dvorak layout. Since I spend a significant amount of time in the console and my right pinky dislikes going up and over I move the '/' back to its qwerty position and shifted the 'z' and '-' keys up. Try it and I think you will prefer it.
    • Let me provide a preemptive response to the inevitable post that will disagree with the parent post:

      Whenever someone claims that the Dvorak layout is superior, there is usually a response that relies on the article The Fable of the Keys [utdallas.edu] by Liebowitz and Margolis.

      The Fable is written by two economists. They rebut the claim that the failure of the Dvorak keyboard to replace the QWERTY layout represents a market failure. Essentially, they say that Dvorak isn't much better than QWERTY so there was no real advantage to it, and it added costs.

      I have no doubt that Liebowitz and Margolis are first rate economists, and that they know all sorts of things about nework effects and market externalities. What I do strongly oppose is their misreading of the cognitive psychology literature, and their unsubstantiated and overblown attacks on August Dvorak.

      I am a cognitive psychologist. I've read the literature. I understand my field, and it is apparent that the bias that Liebowitz and Margolis bring to their evaluation of the literature taints their paper. I make no claims about their economic arguments, but they have done their readers a great disservice by unfairly treating their subject (whether out of malice, bias, or incompetance).

      For a decent layman's response to The Fable, check out this page [mwbrooks.com]

      </rant>

      The bottom line is that Dvorak is about 10% faster than QWERTY, given the same training. This is substantial, but one must consider that most of the time it takes to compose a document is not typing time, but rather content generation (e.g., thinking about what to say). Therefore, someone like a transcriptionist would benefit from a superior layout more than a typical knowledge worker. In addition, there's pretty good evidence that Dvorak error rates are significantly lower than QWERTY rates. This isn't as much an issue with computers as it was with old typewriters (it takes more time use use whiteout than it does to hit the Backspace key). There have been claims that Dvorak layouts reduce the likelihood of RSIs. There haven't been any really good studies, and it is unlikely that there will be (given the small number of Dvorak users)

      I use a Dvorak layout, and I enjoy it for a number of reasons:

      * I type a bit faster, but it is probably due to the fact that I engaged in dedicated practice when I learned to type Dvorak.
      * People don't ask to use my computer
      * I gained a lot of insight about the process of skill acquisition when I learned the new layout.

      Oh, and I can still type pretty decently on QWERTY keyboards.
    • From the article: "disrupt competitors, not customers".

      I think the reason for Dvorak not to succeed is that forces users (customers) to change the way they type, and that's way too demanding.

    • The Dvorak layout is more efficient for typing English text than the standard Qwerty layout

      In studies proctored by Dvorak himself. Funny, that

    • Dvorak failed because the mechanism it was designed for could not function properly.
      The original type writer started with dvorak keyboards, actualy started with a lot of layouts, but the dvorak method caught on. But then they found out that people could type too fast, and the keys would get stuck. this would kill in aded efficience they were getting for switching to type write, which where very expensive, and there users required training.(sound familiar?)
      so someone came up with the qwerty method bacause it slowed people down.
      none of this applies to todays market, but training momentum has kept it going. what may finally begin qwerty's decent is the fact that I can change they layout of my keyboard through software.
      The first CEO that demands there people learn Dvorak lay out will get a nice bonus from the increased productivity.
      I would rather see people learn the dvorak method, then most coding 'techniques' that are implimented to imnprove code speed release, and usually don't

      yes I know its probably Ironic that I typw something like this, and it will no doubt have typos, but /. aint really worth the effort.
      • Um, no... the original typewriters were in alphabetical order. This caused problems of keys jamming. Then came qwerty, to slow things down. The person that invented qwerty tried to switch to something better, after the typewriter design improved so that it could handle the faster speed. It failed. Dvorak came after even that.

      • This is drifting off-topic, but what the heck.

        The first CEO that demands there people learn Dvorak lay out will get a nice bonus from the increased productivity.

        Assuming you're talking about a software company, I could not disagree more. I think any difference in productivity would be small and it would be next to impossible to establish faster typing as the reason. (If you're not talking about a software firm, then you might possibly be right, and I have nothing to say.)

        I think there are other things that contribute to software development productivity. Good and open communications between developers and a quick bug catching process that gets bugs fixed before they become panic-mode fixes... these two things by themselves would completely dwarf any productivity increases due to better typing.

        The one place where I do believe that a mechanical skill would help productivity in a software firm is a twofold skill: touch-typing (either QWERTY or Dvorak), along with deep familiarity of a text editor. When I see some people poking away at their keyboards, it leads me to believe that my skill in the above two areas really does increase my productivity.

        When I have sudden "what if?" flashes, it means I can bang out a quick test twice as fast as someone else, which means I can try twice as many different options. It also means that I don't mind taking the extra time required to format my code nicely, or even document it (gasp!), because for me, it's not that much extra time.

        In the end, I believe it means I can produce either twice as much code, or in the same amount of time, I can produce code that's twice as good in quality.

        Just MHO. Mostly off-topic. Moderate at will.

      • ... about Dvorak vs. Qwerty, but have no idea if they're true:

        - Dvorak is significantly better than Qwerty. But there are a number of other "improved" keyboards that are about the same amount better than Qwerty. So if you're an executive looking into paying to retrain, you look into the merits and find there is no clear choice.

        (We hear a lot about Dvorak because it's the one that gets better press, and has some support in the computer community, more for historical reasons than its merits relative to other improved keyboard layouts. That, combined with the relative ease of remapping a computer keyboard {compared to a mechanical typewriter} might get it over this hump. A trivial graphic config tool in Gnome and Kde would give it a BIG push.)

        - Qwerty wasn't deliberately designed to be slow. It was just the first layout that was built by that group of engineers. The deficiencies were quickly discoverd and they came up with a better layout. And management nixed it because of the retraining costs - the first such decision.

        At the time there were less than ten trained typists.

  • It's worse than that (Score:4, Insightful)

    by epepke ( 462220 ) on Thursday May 16, 2002 @03:49PM (#3532589)

    Best quality + first to market almost never means success. Inferior but good enough, introduced when people are used to the idea almost always wins.

  • A couple real insights, a couple tired saws. (Score:5, Informative)

    by Lemmy Caution ( 8378 ) on Thursday May 16, 2002 @03:51PM (#3532606) Homepage
    The strongest insight in the article - and the best supported - is that well-managed companies that take care of their existing customers well are often not innovative, because processes and methods that are profitable are unlikely to be challenged, and because truly outre and novel ideas are too disruptive to be welcomed. The notion that innovation occurs in the context of and also creates disruption is a reasonable one. The rest of the article is questionable: his observations that lean projects are more adaptive than ones that have deep pockets which let them stick with a 'a bad strategy' begs the question of what a bad strategy is. It's the Right Thing To Say in a post-boom age (profits now! no vapor!) - but it omits the many successes that came of plodding along after initial disappointments. And, as soon as he used the word "leveraging" I know his article had run out of ideas.
    • "[I]t omits the many successes that came of plodding along after initial disappointments"

      So, which companies are you thinking of?
    • it omits the many successes that came of plodding along after initial disappointments

      No it doesn't. Christensen continues to claim that innovation is an inexact science. His "rules" (observations really) merely recommend strategies to mitigate the risk of a project or venture, not to eliminate it entirely or even necessarily substantially.

      For instance, toward the beginning of the article he discusses the impact of different types of companies taking on different strategies. If an existing leader innovates to appease their existing customers - they continue to lead 100% of the time. He recommends that new entrants take a disruptive approach to the market, but they are still only successful 33% of the time (vs. 6% when they try the sustaining approach).

      He shows how to reduce the risk, but recognizes that even by following his rules, you're looking at relatively high rates of failure - "The observed probabilities of success in innovation are low."

      As to the statement about a lack of original ideas - I would also point out that Christensen generally seems to do a pretty good job of backing his claims up statistically (check out his book). It's unlikely that he's just throwing out post-dot-bomb hindsight mixed with unsupported common sense. He's just taking observations from his research to point out the most important criteria for successful innovation, without any claim to originality of the individual suggestions.

  • A Lesson for Microsoft (Score:3, Insightful)

    by yoyoyo ( 520441 ) on Thursday May 16, 2002 @03:54PM (#3532619)
    There's some interesting stuff in this paper. He says The first [misconception] is that deep corporate pockets are an advantage when growing new businesses. They are not. Too much cash allows those running a new venture to follow a flawed strategy for too long. Having barely enough money forces the venture's managers to adapt to the desires of actual customers, rather than those of the corporate treasury, when looking for ways to get money

    Microsoft tends to solve problems by throwing money at them, but if this article is correct, that is a flawed strategy. The excess cash allows them to keep a flawed product on the shelves (e.g. XBox) long past the point where a poorer company would be focusing on improving the product to make it match the customers needs.

    Food for thought, anyway.

    • And furthermore, it can make them vulnerable when consumers start to associate a company with just that one product. MS has many, many software products, but none are market leaders except Windows, Office, and, on the back end, Exchange. That's it. Office alone accounts for 1/3 of their income. In the minds of consumers, the first two products ARE Microsoft, period.

      So throwing money at inferior offerings can harm companies in more ways than just wasting cash: it can cement their image in the eyes of consumers.
      • None of Microsoft's products suck (well, 9x does when compared to whats out now, but discount that) Xbox isn't that bad, its ok, its big and clunky, but the games look nice and as the doa3 commercial says "she kicks high."

        Another aspect is the whole buying of things. Age of Empires came out of M$ and it was a good game. Microsoft bought some compony while it was being developed, finished it and so, they paid a lot, but it wasn't junk.

        Also, lastly people can only view something as bad when they can compare it to other things. If people think windows crashes because they didn't buy a $4000 computer, then they wont view M$ at fault.

    • Re:A Lesson for Microsoft (Score:4, Insightful)

      by binaryDigit ( 557647 ) on Thursday May 16, 2002 @04:45PM (#3532959)
      Microsoft tends to solve problems by throwing money at them, but if this article is correct, that is a flawed strategy. The excess cash allows them to keep a flawed product on the shelves (e.g. XBox) long past the point where a poorer company would be focusing on improving the product to make it match the customers needs.

      Well yes and no. Was the original version of IE vastly superior or "disruptive" technology, well NO. But they were able to use their deeeep financial resources (and desktop monopoly) to keep plugging away until they are now #1. So that tact can be made to work, given enough resources and the right set of circumstances.

      Plus, I'm not sure if your example of the xbox is good, since many people do recognize that as a game machine, it has many strengths over it's competition. So in some ways it is the superiour product. Also, because of the lack of sales, they are in a position where they _have_ to innovate at a faster rate than Sony to make up the deficit (again, look at the browser wars, IE sucked at first but they were able to quickly, once they put their minds to it, start adding features to improve it, so much so that Netscape couldn't really effectively keep up).
      • I would say that on the Macintosh at least this was not the case.

        At the time Netscape was slow/buggy. Microsoft came out with IE4.5 and then IE5.0.

        It didn't take long for people to choose (Macs ship with both Netscape and IE) IE5.0, it was faster, more stable and looked like a Macintosh product.

        Although I would have to say that IE5.0 for the Mac is better than nearly any other browser (as of a couple of months ago, Mozilla is better now).

        Notable features:

        Fast
        Stable
        Button that would get completely of the screen.
        Printing that works (I worked in a company where I had the only Mac and people use to give me list of URLs to print).

        Eg On the PC in IE6.0 printing is still broken (pages don't scale to get all the information on the page), but the Mac it was a sweet product and within months everyone was using it.

      • IE sucked at first but they were able to quickly, once they put their minds to it, start adding features to improve it, so much so that Netscape couldn't really effectively keep up).

        Well, that and they threatened to withhold Windows licenses to OEM's that pre-installed Netscape on PC's that went out, thus cutting off this sort of revenue for Netscape. Having this monopoly power and (illegally) wielding it changes some economic rules.
    • Microsoft tends to solve problems by throwing money at them, but if this article is correct, that is a flawed strategy. The excess cash allows them to keep a flawed product on the shelves (e.g. XBox) long past the point where a poorer company would be focusing on improving the product to make it match the customers needs.

      I'm not sure I agree with this. As far as I can tell, the X-box is doing exactly what it was intended to do - introduce Microsoft brand awareness into a different market, and to prime that market for future Microsoft offerings. The actual profitability of the X-box itself isn't very relevant (its goal does not seem to be to make money).
    • Microsoft tends to solve problems by throwing money at them, but if this article is correct, that is a flawed strategy. The excess cash allows them to keep a flawed product on the shelves (e.g. XBox) long past the point where a poorer company would be focusing on improving the product to make it match the customers needs.

      Not really. Microsoft is an example of an established company that can essentially build insurmountable barriers to entry by piling up bales of cash. To answer your example: If a non-established, non-disruptive innovator tries to enter the game console market with a product that competes with xbox, the new guy will fail because the market will go with the established company. In the example, the xbox is not a flawed product that is allowed to live on but rather a non-innovative product that keeps non-disruptive innovators out of the game console market.

      In this way, Microsoft is not (and really has never been) an innovator. Even with DOS, the technology was not disruptively innovative. Now, their LICENSING deal was a disruptive innovation, and that is what allowed them to instantly move from non-established to established overnight.

    • One of Microsoft's reputed strengths is their ruthlessness in killing projects that aren't turning out right.

      For instance, at one time they poo-pooed that Internet thing and resolved to one-up Prodigy, AOL, and whoever with their own MS network. MS had shloads invested in that strategy, but realized early enough that it wasn't going to fly and the next thing you know they're acting like they were helping Gore work out the details of TCP-IP all along.

      Also they seem to have quietly abandoned any pretense of competing in the more-real, less-time market, and have moved instead to providing configurable versions of the normal mondo-memory 32-bit one-user stuff.

      So it seems to me they're quite conscious of the need to avoid throwing cash at projects that are going nowhere, but it's hard to say whether they can avoid the natural progression into pissing away time and money on glib PowerPoint presentations outlining bright futures some fine day.

  • Innovator's Dilemma (Score:5, Interesting)

    by geoffsmith ( 161376 ) on Thursday May 16, 2002 @03:56PM (#3532627) Homepage
    This is the concept Christensen is famous for (and there is a book titled after it which you should all read) Here's my 10 second synopsis of Innovator's Dilemma:

    Your old customers are demanding you spend all your resources on your old technology (eg. 5 1/4 inch disk drives) But there are new potential customers who want to buy new technology you haven't developed yet (eg. 3 1/2 inch disk drives) There are more potential new customers than old customers, and thus more profits in devoting your resources to new technology. But you already have your old customers, and you're supposed to *listen to your customers* So there's the dilemma.

    Solution to the dilemma? Sometimes it doesn't pay to listen to your customers. And that's a tough pill for an established company to swallow, since that's how they made money in the first place.

    Websurfing done right! StumbleUpon [stumbleupon.com]

    • Re:Innovator's Dilemma (Score:3, Insightful)

      by Restil ( 31903 )
      You don't give up on your old customers, you just "encourage" them to upgrade, but not in a way that actually hurts them.

      5 1/4 users have large quantities of 5 1/4 disks. They're not going to want to replace all of those with 3 1/2 even though they can store twice, 4x, or 8x (depending on the drive and media) the amount of data. They want you to continue supporting them, and they will continue to buy products, even though they're inferior to a better product at the same price.

      And that's where you get them. Keep selling the old products, but market your new products at a lower price. Encorage your customers to see that in the long run, it would be cheaper if they upgraded, or at least started migrating. It only makes sense. If they want to stay behind the times, then you'll still be there to support them, but by the time you finally close the door on your own manufaturing process, if you've marketed your products well, that old company will either have converted, or gone belly up.

      If they decide not to upgrade, even after you've long since quit supporting them, there IS always that market of old working, but useless junk that nobody wants anymore and will pay people to take away. This company will just have to seek out those sources.

      -Restil
      • He's right - it is possible to support old and new customers at the same time - but your competitors who only support one will have an advantage over you.

      • OKay, what do you do when you have one customer left that uses 8 inch disks? Those old drives fail once in a while, but the customer will never buy enoguh to make anoutehr production run worthwhile, yet they still need them. Now what? that is a real world case, I know the company that found themselves scrambling to find hidden 8 inch disks so they could keep they equipment running while engineers upgraded to support something newer. (Maybe not the last, but at least on)

        Although you have to wonder about a company that wouldn't see the writing on the wall for old technology and upgrade. OTOH, you gotta agree with the "It ain't broke, don't break it" philisopphy that results in this situation. I've seen many situations where an upgrade (that may have been needed in the long run) broke everything just for the sake of new technology.

    • Your old customers are demanding you spend all your resources on your old technology (eg. 5 1/4 inch disk drives) But there are new potential customers who want to buy new technology you haven't developed yet (eg. 3 1/2 inch disk drives) There are more potential new customers than old customers, and thus more profits in devoting your resources to new technology. But you already have your old customers, and you're supposed to *listen to your customers* So there's the dilemma.

      Sounds like Jobs must read Christensen, since he's all about dumping old technology for the new (e.g. floppy disk drives). He must just do s/distruptive new market/Next Big Thing/g... it does seem like Apple has become pretty good at keeping its existing markets safe while disrupting its competitors.
    • It's a little more complicated than that. Christensen's contribution was that incumbent players miss disruptive technologies not because of bad management, but because of good management. The disruptive technologies initially are inferior, serve a smaller market and come with low margins and immature technology. At no point is it a rational decision to dump your successful high margin technology for an inferior product with a lower margin and a smaller market.

      But what happens is that the disruptive technology improves with time to the point that it's "good enough" for your customers, even though it still can't do all the things the incumbent technology can do. And presto, the market disappears overnight.

      I think a good example (although it's largely conjecture at this point) is the storage industry. EMC used to make a fortune selling extremely fast, reliable, high margin storage devices to enterprises. There have always been commodity PCs that did fileserving, but it was a different market: Less space, less reliable, less manageable, more failure prone! Who cares if it's cheaper.

      Well over time, commodity PCs improve, technology gets better and people start to think, why not just have lots of commodity PCs and some clever software engineering stand in for my expensive EMC. Google launches and proves (to the people paying attention) that clusters of commodity PCs with clever software can be pretty damn fast and pretty reliable at storing rather a lot of data. And the cost is phenomenal.

      At this point I'd say the writing is on the wall, but is EMC building commodity based storage solutions? Maybe in some tiny little skunkworks project, but not visibly. Even if they build it, will they launch it? Not clear. Why would they? They sell a Symmetrix for >$1M, the margins are huge on those things. And PCs are never going to be as fast as a tuned Symmetrix and fibre channel connection.

      But you know what? Nobody cares.

      So we'll see. Storage.
    • perfect example of this is Xerox developing a graphical interface, but after asking their costumers and seeing that no one wanted it, they give it to Apple.

  • The First Rule of Innovation (Score:2, Funny)

    by Anonymous Coward
    1. You do not talk about Innovation
    2. If you do talk about Innovation you must be Microsoft.
    3. If you are not Microsoft you DO NOT INNOVATE
    4. Bring lawyers too.

  • But I must quibble with a few points. I suppose he knows more about it than I, but does all innovation in a given field necessarily take place on the low end? What about new products that may or may not be higher-end than existing products? (Example: The runaway popularity of SUVs, which are certainly NOT low-end impulse purchases, and newer models of SUVs seem to subscribe to the Micro$oft bloatware model: more, more, more [useless] features and a higher and higher price tag. But people sure buy 'em.)

    Secondly, I'm not sure his hypothesis works for all his examples. I'm pretty sure, for instance, that Wal-Mart got where it is by a combination of unscrupulous business tactics and leverage, NOT just by providing the lowest cost per item. I've heard that Wal-Mart pressures its suppliers into giving it the lowest possible price, and generally creates "race to the bottom" conditions wherever it goes.

    Third and least important quibble: Fergodssakes, man, if you've got something to say, write it so it's actually readable! "Creative creation"?! I've heard MUCH better phrases for that concept (including "wealth creation"), that DON'T leave one wishing one's office had a shower cubicle. "Leveraging"?! Pleeeease... Is it just me, or are all biz-school types these days just far too in love with the euphony of buzzwordiness?

    Nevertheless, I'm going to forward this one on to my entrepreneurial boss. Let him take the advice...and the shower.

    ?!

    • Re:Like what he has to say... (Score:4, Informative)

      by markmoss ( 301064 ) on Thursday May 16, 2002 @04:34PM (#3532891)
      But I must quibble with a few points. I suppose he knows more about it than I, but does all innovation in a given field necessarily take place on the low end? What about new products that may or may not be higher-end than existing products? (Example: The runaway popularity of SUVs, which are certainly NOT low-end impulse purchases, and newer models of SUVs seem to subscribe to the Micro$oft bloatware model: more, more, more [useless] features and a higher and higher price tag. But people sure buy 'em.)
      SUV's were sold by existing companies to existing customers. This makes them a "sustaining innovation" in the language of the article -- listening to the existing customers and making improvements to the product. And that's if you call them an innovation at all; they are not much different from the GMC Carryall my father bought used in 1963, drove for 15 years, and replaced with a new Carryall.

      Sustaining innovations often do tend towards the high-priced end. The customer demand an established company is least likely to respond to with major innovations is "lower price" - you know your existing customers have the money, so making things cheaper just reduces the part of it you get, while making the product better and more expensive might milk more money out of them.

      It's not impossible for a new company to be successful selling high-priced products -- think fashion designers and fancy restaurants. But note that you don't get GMs, IBMs, or Microsofts out of such markets. I can remember two computer companies that tried to start at the top: CDC (tried to sell bigger mainframes than IBM in the 1960's, went bankrupt, "refinanced" via an antitrust suit against IBM, and lost the money in supercomputers, IIRC), and Cray (supercomputers). There's also Amdahl, which made imitation IBM mainframes (a little faster or a little cheaper) so I'd call that starting almost at the top. None of these ever did very well. By contrast, starting at the bottom produced the mini-computer companies, at least two of which (DEC & Data General) were apparently quite successful until the PC companies found a lower bottom. And many PC companies have been very successful, although not at all secure - PC's are a nasty bottom-end commodity market where any company that lets its cost control or marketing lapse for a moment is dog-meat for momentarily more efficient competitors. Or possibly to competitors that have managed to lower the quality even further without getting buried in bad units...
      • That's not quite correct. CDC's problem was that it grew big too fast; you have to remember that it rapidly become a conglomerate during the 60's, not a computer company. It didn't get even close to bankruptcy during the IBM antitrust thing. They sued IBM (and won) because they wanted to stop IBM from damaging their future supercomputer efforts by promoting vaporware in the form of the IBM 360/90, which was IBM's answer to the CDC 7600, Seymour Cray's followup to the 6600.

        CDC also sold a number of non-super computers, for business tasks and such. CDC's ultimate problems were remarkably similar to those of DEC (the world advanced, but the company failed to adjust to the new realities), but by the time CDC was sold off, they had no computer or peripheral presence to speak of. So you can't blame high-end innovation for that.

        Cray's problems were different -- but it's worth noting that they're still around in a form not entirely unlike their original incarnation.

        • Cray may still be around - but it's in a small niche market, and doesn't seem to have any prospect of ever becoming bigger.

          I didn't know CDC had other lines. I might have mixed up when they (first) went into receivership, although I thought it was before they got their antitrust settlement (middle 70's). This suit (or at least the conclusion of it) was much too late to "stop IBM from promoting vaporware". The background: In the early 1960's, some IBM engineers designed a much more powerful mainframe, but management killed the project. The engineers took their ideas to CDC, which started work on a mainframe at least 10x anything IBM had in regular production. IBM management suddenly realized their mainframes weren't big enough for big corporations anymore - but IBM also needed machines for smaller businesses, and didn't want to follow the previous pattern of making each new computer a unique and incompatible design. So they dumped the previous design efforts and started the 360 project, a full line of computers from rather small to the biggest mainframes possible, all running the same software, and including a grossly overambitious OS. At least that was the plan; the hardware design went slower than planned but as fast as a project of that magnitude ever actually goes, with some big iron on the market by 1968. However, OS/360 was much farther behind schedule. It seems to have been the most massively fouled up project to ever be finally successful (unless you lump all the USA's efforts in WWII together as one "project"). So for a few years you could buy a new 360 but the only thing one could do with it to run an emulation of an older and much less powerful machine. I saw a 360 still running an emulation of an old 1400 in 1973, although OS/360 had been out for at least a year...

          IBM had hurt its customers as well as CDC with vaporware in two ways: first, by announcing the 360 line when they started designing it (1964?), they caused a good many companies that were thinking about CDC's to decide to wait a couple of years for IBM assured quality - and it turned into close to 8 years. (This also hurt IBM - nobody wanted to buy their older computers either, and by 1968 they must have really needed to sell something to bring in the cash). And then there were the companies that needed and bought IBM big iron starting in 1968, and waited maybe 4 years to be able to fully use it. Although IBM's antitrust violations were unintentional, they hurt both the competition and loyal IBM customers. But CDC's lawsuit didn't stop this - it stopped when IBM had real products to back up the vaporware, and CDC just skimmed some of IBM's profits years later.
      • The SUV marketplace validates the "don't listen to your [current] customers" thesis rather well, really.

        Go back 20 or 30 years. Instead of SUV, think "vehicle capable of handling rough terrain and bad weather." I was the typical customer for this kind of vehicle. I wanted it simple, sturdy, and easy to fix. I did not want an automatic transmission, power windows, power steering, or any other gewgaw that would add complexity or might break when I was out in the boonies. I didn't care about a smooth ride or plush seats, and I drove with the windows open (or top down) most of the time, so I didn't need air conditioning, and I wasn't picky about heat. I didn't need a lot of power as long as the gearing was right, so I didn't need a fire-breathing motor. In a 60s/70s context, I was happy with a ~200 CID straight six or a big 4 cylinder engine.

        A Willys Jeep was just fine with me. An International Harvester Scout did the job. My younger brother, a photographer, often hauled a lot of gear (and he was a really big guy) so he got into the habit of buying used Suburbans or Carryalls from the (Arizona) highway department.

        In other words, these 4X4 vehicles were sold, for the most part, either as working tools to ranchers and the highway department or to camping-type people like me. We got them because we often needed or wanted to go where there were no roads or drive through snow and ice. We wanted trucks. We liked trucks. We didn't care much about paint because it was going to get scraped off anyway.

        There was also a racing/performance offroad subculture that spent megamoney on 4X4 vehicles. Again, no attention to luxury.

        Fast forward. Jeep sold Wagoneers with car-style amenities, but the hard-cores didn't buy them. Subaru sold 4X4 little cars and station wagons, but only a limited number of them. Broncos and Blazers came a little closer to mass appeal, but were still trucks at heart, not all that different from your old Scout or CJ although they tended to have car-style (plastic) dashboards instead of real he-man ones.

        If you had listened to the people who bought the old-style 4X4s, you would not have SUVs. It took a major market perception shift to bring the idea, "Hey, you can have the capability of a 4X4 in a car you usually only drive on the highway and sit in air conditioned, padded comfort even in crappy weather -- and you can now drop into 4 wheel drive without getting out and setting front hubs," onto dealer showroom floors.

        I own a middle-aged Jeep Cherokee. It's not a hard-core old-style 4X4 truck, but still has no power windows and crappy air conditioning (in Florida), and I'm okay with that. I like my Cherokee, and that's a problem for the car makers. I am not a good SUV customer, because one important piece of the old 4X4 truck guy ethos is that old trucks are better than new ones, and once you get one you like you only get rid of it if you can't get parts for it any more or some moron runs into it and totals it.

        There's an old guy near me who has a late 50s Willys pickup for himself, and a CJ for his wife. They're not restored, just maintained well. Not show condition -- blanket instead of seat cover in the pickup -- but decent.

        Hell, listen to that guy and you'd never make an SUV with a stereo (those who wanted stereos would install their own) or any other kind of amenity, and "soccer moms" would not be running around in those grossly huge Ford Expeditions, let alone something as silly (by old truck guy standards) as a 4X4 Cadillac or Lincoln.

        - Robin

        • Think CAFE [vehiclechoice.org]: Corporate Average Fuel Economy.

          CAFE standards require each automaker to meet a sales-weighted average fuel economy level for the fleets of new cars and light trucks it sells each year... One standard governs passenger cars, and another governs light trucks.


          ...

          Another result of CAFE has been a marked increase in the sales of light trucks including pickups, vans, minivans and sport utility vehicles. As cars became smaller and lighter, some models (like large station wagons) became harder to find. Since some consumers could no longer find the utility and performance they desired in cars, many switched to light trucks. In the mid-1970s, light trucks made up 20% of light-duty vehicle sales; today, they make up about 40% of new vehicle sales.

          Basically, the car manufacturers realized they couldn't keep producing full-size station wagons and still meet CAFE standards. But since "light trucks" not only have a less stringent standard, but also are counted separately from their cars, they could replace full-size wagons in their lines with SUV's and mini-vans instead.

          • Bingo! That's why SUVs took off--because cars were getting too damn small for the average family with kids. You can't pack two adults and two kids and luggage in a modern sedan in anything like comfort; I can't imagine trying to take a family on a 5-10 hour trip in what are being sold as cars these days. Trunks in those little dinky things aren't big enough for a week's grocery shopping, either.

            That, and light trucks/SUVs are higher off the ground, which is a good thing in a city that is mostly below sea-level and is prone to street flooding every time it rains harder than a light drizzle.
          • Yes. A 1970 Cadillac is the same length as a van seating 14. The backseat of a '66 Buick sedan was roomy enough for 3 kids on a daylong drive, even fairly large kids (16, 11, and 6 in the last family vacation I remember in it). The Carryall was much roomier, although padding and heat were minimal - but it was a truck, and driving it was a quite different experience than the car. Dad picked it because it could haul a half-ton of cherries to the cannery, or take the family camping -- in Arizona, from Michigan...

            So the government regulated the size of cars (not directly, but that's how CAFE works out), but they can't very well regulate the size of trucks because some people still have to haul a half-ton of cherries to market. And the people who missed those giant cars most started buying trucks instead. Eventually the auto companies noticed and started making some trucks less truck-like. Hence, minivans (some of which look very much like pregnant station wagons), and SUV's ("macho" station wagons).

            OTOH, I _like_ driving a truck. My Dodge Dakota was the most truck-like of the small pickups I test drove. And unless the drivetrain goes disastrously bad, I'll still be driving it when the floor rusts out in spite of the best rustcoating...

    • What's innovative about the SUV? Chevy Suburbans have been around since what, 193x?

      Innovative marketing, maybe, but not the product.

      • Well, there was incremental innovation in the whole SUV market that has changed what people drive. They used to be work trucks. Luxury SUVs are a relatively new thing, as are Mini-SUVs. (built on a car unibody chassis) People who would have bought a station wagon back in the 70's are now buying some sort of SUV's. The fact that a company like Land Rover was an early leader, but that the market is now dominated by the Big 3 sort of proves his point about how hard it is for a new or small company to break into a market using sustaining innovation.
    • "Leveraging"?! Pleeeease... Is it just me, or are all biz-school types these days just far too in love with the euphony of buzzwordiness?

      I don't see the problem. Leveraging is a perfectly acceptable word that means using something to gain greater benefit than if you didn't have that thing. (like a lever) Just because something has been used as a buzzword does not eliminate it from the list of useful, valid words.

      Give me where to stand, and I will move the earth.
      -- Archimedes, expounding on the theoretically limitless power of the lever

  • Point 4 is the only significant factor (Score:5, Insightful)

    by gelfling ( 6534 ) on Thursday May 16, 2002 @04:01PM (#3532662) Homepage Journal
    If the transition costs you impose on your customers is too high they'll run for the door screaming. It doesn't matter how wonderful your technology is. That's why DIVX and HDTV are dead or dyeing for example. You can't make it so hard to use or purchase or install that only primary adopters use it.

    cough cough hack linux cough bsd

    That's the lesson of desktop linux - it doesn't matter HOW BAD MS is - what matters is HOW HARD the transition to something else is.
    • There's also more than one transition that has to be made. You have to move a product from pioneers to early adopters, then to early majority, then to mass market, and so on.

      A related book is "Crossing the Chasm", http://shop.barnesandnoble.com/booksearch/isbnInqu iry.asp?userid=18DNABCSR0&mscssid=UW03MK30SS548PM5 DG7XDX17J0AJD5X5&isbn=0066620023. It argues that there's a discontinuity between early adopters and early majorities which has to be addressed by focusing maximum effort on a narrow niche to get a beachhead, and by making the technology nondisruptive.

      Amusingly, CtC starts with a gedankenexperiment asking whether the reader would buy an electric car if it worked like a normal car. Amusing, because I drive a Toyota Prius gas-electric hybrid, which was carefully engineered to fit into the put-in-gas-and-put-it-in-Drive market.
  • He seems to have figured it all out. But can anyone point to a resource that describes the author's own success in developing an innovative product/company? And I'd like to see something more substantial than an unknown consulting company or similar.

    There's the academic world, then the real world...

  • A well written article. His main point is that contrary to the VC's thinking, you can analyze and predict success. However, he gives a powerful counterpoint aswell:

    What drove Sony's shift from a disruptive to a sustaining innovation strategy? Prior to 1980, all new product launch decisions were made by cofounder Akio Morita and a trusted team of associates. They never did market research, believing that if markets did not exist they could not be analyzed. Their process for assessing new opportunities relied on personal intuition.

    • Re:Sony (Score:2, Interesting)

      by shrikel ( 535309 )
      I think the "intuition" he was referring to is Morita's dreams that people would buy things -- but those innovations were based on a real understanding of how people live and what people do. Like the walkman -- people jog, and people travel -- wouldn't it be great if they could listen to music while they do it?

      VC's nowadays who use just their intuition probably don't succeed as much because they don't know what makes an innovative company succeed and what makes it fail. To overcome this problem, they use statistics and keep a large portfolio so they can make a profit even if a lot of their companies fail.

      The point of the article, at least in my mind, is to show the VCs what they need to know to make more intelligent bets. In short, this study tried to figure out the attributes of innovative companies that really succeed.

      I think the analysis and prediction on the part of the investors could (and should) more closely resemble the intuitive product selection and development by Morita and his group.

      Just my thoughts.

      • I would agree that the article is pointed toward VCs. They are expected to return 15-20% annually for their investors. They do this by maintaining a large portfolio of companies, because they beleive that they can't predict success. However, becuase they expect a 90% failure rate, they need to find companies that have the promise of returning almost 100% per year if they are the 10% that succeed. (This made them quite a bit of money when IPO demand shot up during the bubble. Now they had more like 30% go public, or get purchased, succeed in VC terms).
        The author's point seems to be that if you apply these principles you would need much lower return rates for all your comapnies because more of them would succeed, my calcs are closer to 50% annual return which would allow that many more companies to be funded.
  • Not that I think the there is a problem with the concept of helping students Cram for exams.

    But the url www.cramming.com forwards you over to a pornographic website.

    I don't think that this is the type of cramming he had in mind.

  • Early with great technology doen't always help (Score:3, Interesting)

    by eyegor ( 148503 ) on Thursday May 16, 2002 @04:31PM (#3532870)
    A few years back, I worked for a small company that was developing a cell phone localization technology. We had a patent on one of the primary means of locating an unmodified phone (worked rather well too). The problem was that while we were developing the technology, we had to beat people over the head at the same time to make them see how valuable the idea was.

    Nowdays, the FCC and all the carriers are still trudging towards the goal of fully implementing E911 and we ended up having to sell out to a competitor having spent too many resources building the market. sigh. :)

  • Sound like ... Punctuated Equilibrium (Score:5, Interesting)

    by AsOldAsFortran ( 565087 ) on Thursday May 16, 2002 @04:36PM (#3532901)
    One element of this article sounds just like Stephen Jay Gould's evolutionary theory of Punctuated Equilibrium.

    IANAET (evolutionary theorist) so take these comments with care.

    One element of the theory of punctuated evolution says that new species arise not by direct competition against their parent species, but by finding an isolated and protected niche where they can develop.

    Say a new species of horse is to develop. A subpopulation becomes isolated and has a chance to develop new characteristics and to become reproductively distinct (no longer interbreeds with the parent species).

    Then, when the geographical isolation ends, the new and parent species come into contact and competition. The new species spreads rapidly, having had a chance to strengthen in isolation.

    This theory is designed in part to explain gaps in the fossil record. The small, original populaiton of the new species leaves few fossils - we only see them after explosive growth - so some intermediate forms are lost.

    That sounds like the article's model of innovation succeeding by finding a niche market before improving the product to compete head on head in the general marketplace.

    Wonder what other analogies exist with evolutionary theory and this article.

    • I'm afraid I don't buy that theory. It seems to say that evolutionary innovation only occurs in small, isolated groups. The fact is, the innovations the isolated group develop would be more likely to occur in the larger group, because the larger group has a wider domain of agents for mutation and innovation. If only the smaller group is forced to adapt to the new environment, why would its adaptation be likely to be better suited to survival in the original environment? (After re-contact.) I guess I challenge the ideas that any change will be a "strengthening," and that evolution would occur faster or better in an isolated environment.

      That aside, I think you summed up the business model that he's talking about pretty well. It's a good parallel.

      • I'm afraid I don't buy that theory. It seems to say that evolutionary innovation only occurs in small, isolated groups. The fact is, the innovations the isolated group develop would be more likely to occur in the larger group where they would be quickly quashed by the vast majority.
        Almost all changes will be debilitating instead of strengthening. The odds of making enough changes to go through a valley to a different peak are likely much better in a small isolated group, struggling to find an identity as which it can survive. In parallel, the large group will develop a pool of mostly recessive characteristics which may allow some of its members to survive an evolutionary crisis. In any event, you would most likely miss evolution in progress even if you were looking right at it.

  • Art v. Science (Score:3, Interesting)

    by mallo ( 543316 ) on Thursday May 16, 2002 @04:40PM (#3532928)
    After reading the article, the one thing I want to do is hear from Akio Morita about why his intuitions were so often correct at Sony. Doesn't that put a lot of MBAs out of jobs?
    • MBA's aren't in that business. MBA's are mostly in the business of turning someone else's innovation (or even lack of innovation) into a viable business plan, and then turning a business plan into an organization and processes. Ideally. Often, MBA's are in the business of bilking customers, investors, and workers and bailing out before it all crashes in around them.
  • Too bad cramming.com [cramming.com] is already taken!
    • whew-- I'm really glad I have my own office and am not in an open plan work environment, cause that would've been embarassing.

      Cramming.com ceratinly appears to be about cramming, but it's about women cramming things in places other than their brains.

  • I Don't Believe Him (Score:5, Insightful)

    by CaptainCarrot ( 84625 ) on Thursday May 16, 2002 @04:56PM (#3533019)
    It's not uncommon that I encounter articles such as this one where I know very little about the subject being discussed, but I do know a bit about some of his examples, and they are sometimes faulty.

    Take his criteria for a successful disruptive technology. I can't help but observe that the light bulb, a successful innovation if ever there was one, satisfies neither. The answer to 1 is negative because neither the poor nor the wealthy were capable of lighting their homes with electricity at the time. Likewise the answer to 2 because there was no existing market. Yet this technology was undeniably disruptive; just ask the manufacturers of candles, oil lamps and gaslights.

    Later on in discussing (as far as I could tell) allocation of resources, he says, "Processes, however--the central element in our second question--are typically inflexible. Their purpose is not to adapt quickly but to get the same job done reliably, again and again." He must be completely unfamiliar with the Software CMM (and now the CMMI for other disciplines) where to attain the highest rating and organization's processes must be flexible. Continuous improvement of processes is one of the more important lessons from the quality movement Prof. Christensen discusses in the opening of his article, so I'm a little surprised he chooses to ignore it here.

    This leads me to suspect that some of his other examples are flawed too, but I don't know enough about all of them to detect it. I don't trust his conclusions, in any event.

    • >> Likewise the answer to 2 because there was no existing market.

      There were markets for candles, oil lamps and gaslights, but no market for clean, odorless light that was less likely than existing light sources to burn your house down? I can't follow that logic.
      • That's right, there was no existing market. A market, by definition, has products in it. No market existed for light bulbs before they were invented. And at that point, "less likely to burn your house down" was something that had to be demonstrated.
        • The market was not "light bulbs." The market was illumination. Have you ever worked for a rail road company by any chance?

          The first criteria for disruptive products is a little flawed, it should probably be: "Does the innovation allow customers to do things that were previously too expensive or required too high skill?"

          There, now light bulbs fit both.
        • There was a market for lighting places at night - several implementations were competing for it, one of which was the lightbulb.

          Also note that not only house but also street lighting was part of that market.

        • Re:I Don't Believe Him (Score:4, Insightful)

          by Darby ( 84953 ) on Thursday May 16, 2002 @08:33PM (#3533993)
          The market, my good Captain, is for sources of light.

          The competition to provide such sources has been going on for a long time.
          The earliest recorded providers were Sol, commonly referred to as "the Sun" and Luna AKA "the moon".

          Now during the day, Sol does an amazing job. Always on time, generally plenty of light for most needs.
          At night, Luna takes over. Technically Luna just retransmits the power,
          (This would be a great place for an Enron/ California electricity comparison, but I can't even understand that whole fiasco well enough to do it right ;-)

          but the effect is the same.

          Anyhow, due to the reduced usefullness of the moon during the night, and the increasing numbers of people inside: caves, office buildings, whatever, a demand was created for more reliable sources of light (and heat). This was met by fire initially. This was good, but had distinct disadvantages. You could burn down your house, or office. Caves were generally immune to burning down, but the disadvantages vs houses is best left for another thread lest I go offtopic.
          Now, there is room for safety improvement in the artificial light market. Also, candles were rather expensive, so there was room for a cheaper alternative as well. Sure the initial investment in electricity is high, but the advantages are many.

          I believe the light bulb was the "killer app" for electricity. So by introducing a new product into an *existing* market and partnering it with an emerging technology (which incidently the lightbulb company was heavily involved in), Edison had a sure-fire winner here.

    • Take his criteria for a successful disruptive technology. I can't help but observe that the light bulb, a successful innovation if ever there was one, satisfies neither.

      It is instructive to note that he indicates there is a success rate, albeit very small (6%), for innovations that do not meet his criteria. Thus, simply finding an example of a success that does not follow his rules does not, by itself, invalidate the rules.

      Plus, if I recall correctly, Edison had hundreds of innovations that were commercial flops. So perhaps the 6% rule is right along the proper lines for your example...

  • disrupting competitors, not customers

    Okay, so what is the best way to disrupt your competitor? What, you say, build a better product? NO!!! Dammit! Hire lawyers! Lots of 'em for frivolous lawsuits. Why? It slows down the competition so a) you can keep a weak product on the market longer b) if you are damn lucky, you can kill their product.

    I have worked for a lot of companies and have been surprised at the number of frivolous lawsuits that do PRECISELY that. I really don't consider that "competing" (which is what "competition" is about, right?). Isn't the point to build better products? Last I looked, lawyers really weren't considered to be a part of economic theory (but, hey, economic theory says monopolies provide the lowest priced goods - guess there are flaws in everything, eh?).

    So, if we look at Microsoft, in essence they did EXACTLY what this guy says is successful. The question is, was it ethical or moral? And my grandfather could have made children work in coal mines for slave wages while he got rich, but noooooo, he had this damn ethical streak!!! So now instead of a billionaire, I'm a working stiff. Doesn't seem fair in the end does it?

    Expect more folks to be following the Microsoft model [sigh]...

  • How does this apply to the rest of the world (Europe to be more exact)? I have a theory that the American market will always prefer crap over quality if it is cheaper. Has anybody done a study on the cost of this "cheapness"? A WallMart chopper will buy a $10 toaster over a $25 one just because it is cheaper. That toaster will be "toast" within a year. Then they must go out and buy another one. And another... When is cheaper really cheaper? That's saying nothing about dealing with the costs of producing volumes and volumes of these cheap goods, dealing with the waste they generate, etc. It is costing YOU a buck or so in tax money to deal with the waste generated by each of this proverbial crappy toasters.

    A "disruptive" technology is good in the sense it forces the established forces to adapt. On the other hand, it also creates goods and services that are not necessarily good enough and with it, the necessity to buy these things constantly. It's a chicken and the egg scenario. Is the "disruptive" technology answering the desires of new consumers or is it creating new consumers from nothing?

  • ...but I'd be quite interested to see a writeup on whether these dynamics applied equally to the usage of various pieces of Free Software. Any ideas? I'm not sure it applies as well... for instance, I've seen some small and great text editors sprout up in the last few years, but I know quite a few people who love and will never give up GNU Emacs. =)

  • C's rule #4 (Score:4, Interesting)

    by wytcld ( 179112 ) on Thursday May 16, 2002 @09:39PM (#3534300) Homepage
    He says to disrupt your competitors, not your customers. If we consider this gem against the wisdom of Douglas Adams, we can guess that Christensen believes your customers are over 35:
    I've come up with a set of rules that describe our reactions to technologies:
    1. Anything that is in the world when you're born is normal and ordinary and is just a natural part of the way the world works.
    2. Anything that's invented between when you're fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.
    3. Anything invented after you're thirty-five is against the natural order of things. (The Salmon of Doubt)

    Isn't it safe to say, and to bet your business, that some people (ever over 35) want to be disrupted? And does Christensen actually know any of the students at MIT?
    ___

  • Relation to open source - in particular Ant. (Score:4, Interesting)

    by ajm ( 9538 ) on Thursday May 16, 2002 @09:44PM (#3534346)
    Previously I've attempted a description of the success of an Open Source product, Ant [apache.org], in terms of the Innovator's Dilemma. I think the fit is very good, provided you recognize how the rewards and costs should be measured in the OSS environment. If you are interested it can be found at Ant as an Example of the Innovator's Dilemma [zanthan.com]. Now I'll have to go back and see how Ant matches against the guidelines in the article, so far it's looking pretty good.

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