Disruptive Innovation
I’m a huge fan of Clayton Christensen. I think he is one of the great business minds of a generation. He is best known for popularizing the concept of disruptive innovation.
Prior to his work in disruptive innovation, the popular belief was that firms lost footing because they could not keep up with other firms technologically. People just figured companies that fail become complacent with their profitability and fail to work hard enough.
Clayton changed that thinking. He instead argues that most firms actually work hard and are cognizant of the upcoming disruptions coming at them in the marketplace. However, their internal controls do not allow them to pursue the disruptive ideas because the disruptive ideas at the outset are highly unprofitable and typically service a lower end of the market than the company that has worked its way upmarket to more profitability. The firms are unable to give the disruption the attention required to thwart oncoming competition.
Many successful startups succeed precisely due to the way in which they disrupt BigCos. The next time a naysayer tells you that XYZ BigCo is going to replicate your features and you’re startup will die, point them to Clayton’s book!
How have you seen disruptive innovations influence your market?