HackerNews Readings
40,000 HackerNews book recommendations identified using NLP and deep learning

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The Soul of A New Machine

Tracy Kidder

4.6 on Amazon

177 HN comments

A Pattern Language: Towns, Buildings, Construction (Center for Environmental Structure Series)

Christopher Alexander , Sara Ishikawa , et al.

4.7 on Amazon

176 HN comments

Meditations: A New Translation

Marcus Aurelius and Gregory Hays

4.8 on Amazon

172 HN comments

The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

Clayton M. Christensen, L.J. Ganser, et al.

4.5 on Amazon

168 HN comments

The Millionaire Next Door: The Surprising Secrets of America's Wealthy

Thomas J. Stanley and William D. Danko

4.6 on Amazon

166 HN comments

Infinite Jest: Part I With a Foreword by Dave Eggers

Sean Pratt, David Foster Wallace, et al.

4.3 on Amazon

166 HN comments

The Elements of Style: Annotated Edition

William Strunk Jr. and James McGill

4.7 on Amazon

155 HN comments

Outliers: The Story of Success

Malcolm Gladwell

4.7 on Amazon

152 HN comments

A Guide to the Good Life: The Ancient Art of Stoic Joy

William B. Irvine

4.6 on Amazon

151 HN comments

Amusing Ourselves to Death: Public Discourse in the Age of Show Business

Neil Postman and Andrew Postman

4.6 on Amazon

151 HN comments

Stranger in a Strange Land

Robert A. Heinlein, Christopher Hurt, et al.

4.4 on Amazon

151 HN comments

Antifragile: Things That Gain from Disorder

Nassim Nicholas Taleb, Joe Ochman, et al.

4.5 on Amazon

150 HN comments

The Power of Habit: Why We Do What We Do in Life and Business

Charles Duhigg, Mike Chamberlain, et al.

4.6 on Amazon

149 HN comments

The Righteous Mind: Why Good People Are Divided by Politics and Religion

Jonathan Haidt and Gildan Media, LLC

4.6 on Amazon

144 HN comments

Getting to Yes: Negotiating Agreement Without Giving In

Roger Fisher , William L. Ury, et al.

4.6 on Amazon

143 HN comments

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aaronbrethorstonJuly 9, 2012

I've been hoping Microsoft would do this for years. I always assumed it would never happen, because... Well, I don't know. Why do companies where all of the senior people have read "The Innovator's Dilemma" still suck? Whatever the reason is for that.

In any case, I'm happy to be proven wrong.

rscaleonMay 24, 2012

I absolutely agree about The Innovator's Dilemma. It's a great roundup of decisions that have long-term effects on a startup (equity decisions, team composition, wealth v. control, etc.).

This list looks like it was written by somebody who reads pop-business books, and doesn't run a business.

artemioonMay 1, 2013

"the term “disruptive innovation” comes to us from Harvard Business School professor Clayton Christensen and his excellent 1997 book The Innovator’s Dilemma."

aaronbrethorstonSep 14, 2012

Absolutely right. Have you read "The Innovator's Dilemma"? If not, I recommend ordering a copy from Amazon. Incredible book.

billswiftonAug 31, 2009

I doubt that could successfully be done more than rare occasions, for some of the problems see Christensen's "The Innovator's Dilemma" http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...

jeffreymcmanusonNov 10, 2011

This seems kind of pedantic but the guy gets it.

And if you're a tech entrepreneur and you haven't read "The Innovator's Dilemma," it's quite likely you're doing it wrong.

filiwickersonMar 16, 2011

If you want a book full of examples check out The Innovator's Dilemma by Clayton M. Christensen.

He explains the idea of disruptive innovation through a series of examples.

A great example is CDs vs MP3s. A cd cost about $10. It was replaced with something that cost $1 - spawning new ecosystems.

jfornearonOct 3, 2012

Some of them seem interesting like The Innovator's Dilemma, I Moved Your Cheese, etc. Not a huge opportunity cost to read those.

charlieparkonAug 3, 2011

I'd be curious to hear others' recommendations, but I've gotten a lot out of Good to Great, The Innovator's Dilemma, and Natural Capitalism.

If you're starting a startup, I'd recommend The Lean Startup over all of those, though.

woanonApr 3, 2011

A poster child for the Innovator's Dilemma of how traditional management excellence kills disruptive innovation: http://en.wikipedia.org/wiki/Disruptive_technology

kmfrkonMay 24, 2012

That The Innovator's Dilemma is not on that list shows that it is complete and utter fluff. Delivering Happiness is probably a great book, but the rest looks like self-help-new-age gibberish. Better use the classics, as kitsune_ suggested, then.

dhoustononJan 28, 2008

i.e. "disruptive innovation". for a more formal jump into this topic, "The Innovator's Dilemma" by christensen.

pchristensenonFeb 16, 2008

For more details, read the Innovator's Dilemma and Innovator's Solution.

Choc13onOct 10, 2018

The Innovator’s Dilemma is a good read for more information on this topic. In fact one of the examples/case studies focuses on Sears and how the were nearly taken down by discount retailing.

The book can be found on Amazon here: https://www.amazon.co.uk/Innovators-Dilemma-Technologies-Man...

SatvikBerionJan 7, 2013

Christensen is incredibly smart and has real research on businesses. For more see The Innovator's Dilemma and The Innovator's Solution, which IMO are the two best business books on the market today.

rodelrodonMay 12, 2013

The Innovator's Dilemma was written in 1997, too early for Kodak to be a case study. In fact, Kodak's stock was at its peak.

Maybe Kodak's executives should have read it more carefully. Or maybe they did, but it's just a damn hard problem to tackle.

aaronbrethorstonDec 22, 2012

Funny, the answer to this is like an anti-Betteridge's Law of Headlines. The reason being is summed up in Christensen's seminal book The Innovator's Dilemma.

Facebook, clearly, is not stodgy enough to always be subject to its effects yet, but they've had plenty of failures, like their Q&A feature.

abhagaonApr 7, 2012

> A long time ago I read a very interesting book on business failures. I don't recall the exact title. It was something like "Why good companies fail".

That would be "The Innovator's Dilemma" by Clayton M. Christensen.

billswiftonJune 18, 2009

"Innovator's Solution" is okay, but Christensen's first one "The Innovator's Dilemma" was better. Also Surowiecki's "Wisdom of Crowds" provides a better survey of the field than any of the more technical books I've read.

SatvikBerionJuly 2, 2012

This is part of what makes The Innovator's Dilemma so great and believable-a lot of the predictions the author makes turned out to be correct over the next 15 years.

gambleonApr 1, 2010

Seconded. The Innovator's Dilemma is a classic, and remarkably free of the usual business press BS.

It's particularly interesting today, as we're waiting to see who will survive the transition to SSD. Five years ago, who would have thought Intel would be king of the hill?

jcahill84onFeb 6, 2017

The Hard thing About Hard Things, but Ben Horowitz. Before that was The Innovator's Dilemma by Clayton M. Christensen. I've been on a business book kick lately, but currently took a break and am reading Amy Schumer's book for kicks.

adamconApr 26, 2011

Thanks for referring to "Blue Ocean Strategy"-- I hadn't read that one. "The Innovator's Dilemma" is a great book (in a sea of bad business books).

eatonphilonJune 20, 2021

I would not recommend anyone An Elegant Puzzle. No disrespect to the author's writing ability and no discredit to his experience. I thought the book had no flow (it was a curated collection of his blog posts, or something like that). He described in detail the decisions he made or things he learned but since he didn't explain any context about the company at the time I could not figure out how any of it was relevant to me. And I've worked everywhere in companies of varying size between F500 and Series A.

I do agree The Manager's Path is a good one though.

Some other favorites are High Output Management by Andy Grove, Managing Transitions by William Bridges, The Toyota Production System by Taiichi Ohno, Measure What Matters by John Doerr, Peopleware by Tom DeMarco, The Innovator's Dilemma, etc.

krnonJan 7, 2019

Steve Jobs essentially described what was later coined "The Innovator's Dilemma"[1], but in a more general way.

[1] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

mikeleeorgonOct 2, 2010

To answer #1, three books I would consider must-reads are:

Crossing the Chasm by Geoffrey Moore
He discusses the Technology Adoption Lifecycle and hi-tech marketing.

The Innovator's Dilemma by Clayton Christensen
This Harvard business professor discusses what makes a disruptive innovation.

Guerrilla Marketing by Jay Levinson
He discusses some scrappy techniques for promoting your businesses. Not all are applicable to web or hi-tech companies, but it can still spark some great ideas.

maxharrisonSep 16, 2020

At a well-managed company that's growing properly, such as Apple was from 1998-2012, this effect is employed in a way that compensates engineers very well via the gains in stock price.

If you're a great engineer, it behooves you to see yourself as an investor in the company you end up choosing to work for.

This means learning about things like the disruptive growth era we're in, how monetary policy affects growth, etc. You should know what an inverted yield curve is, and where to look to keep up with those charts (https://fred.stlouisfed.org/series/T10Y2Y).

It's important to read Clayton Christensen "The Innovator's Dilemma". I also highly recommend reading ARK Invest's research reports. They cost nothing but an email address, and I have found these all to be enormously valuable in my own research on this. If you just want to sit and watch some stuff on YouTube that can help, give "Chicken Genius Singapore", "Dave Lee on Investing", and "Solving the Money Problem" a whirl.

Great management is incredibly rare. But it's on you to learn how to identify it. If you want to be paid the most, you have to know more than just the field you specialize in! There is little value in putting your head in the sand.

coderintheryeonJune 6, 2021

This depends a bit on the scale of your startup and where you want to focus. As the startup develops, if you will be building, growing, and directly managing the technical team then a focus on people books is appropriate (e.g. "Peopleware" and my personal favorite "Turn the Ship Around").

If you are also leading product, then "The Principals of Product Development" is an excellent book.

If you are tasked with research and innovation then "The Innovator's Dilemma" is a must read.

Happy to share more recommendations if you get in touch.

btillyonAug 11, 2012

Are you kidding? Kodak invented digital photography. And you know what? They knew better than anyone else that digital photography absolutely sucked relative to film.

If you want to know why dominant players get displaced by new technology, I highly recommend reading The Innovator's Dilemma.

nickffonFeb 5, 2013

If you haven't read "The Innovator's Dilemma" and "The Innovator's Solution", you really should, because the Tesla strategy is straight out of those books.

btillyonJune 29, 2010

Read The Innovator's Dilemma for a number of examples of how following the data lead companies off of nasty cliffs. (The follow-up, The Innovator's Solution, had a lot more useful detail.)

nostrademonsonMay 30, 2013

Famous last words, if you've ever read The Innovator's Dilemma. Google is definitely moving up-margin into Enterprise with a fair degree of success; I'm not sure about Apple, but I wouldn't be surprised if they are too. In tech the companies who are successful in low-margin market segments are predators and the ones in higher-margin market segments are prey.

6renonJan 20, 2012

"Disrupt" is used here in its technical sense, as coined by Clayton Christensen in "The Innovator's Dilemma".

That book is advice to incumbents, such as Kodak.

eruonDec 9, 2010

> Was it the Innovator's Dilemma that pointed out power users as a primary source of product innovation?

I am reading that book at the moment. But to me it seems to tell exactly the opposite story.

jjguyonAug 26, 2011

Link dead for me. Found the list republished here: http://thenextbigtechthing.com/10-books-every-entrepreneur-s...

"The Entrepreneur’s Guide to Business Law" --
LLC vs C-corp vs S-Corp? Founder’s vesting? Liquidation Preferences? Equity vs Debt financing? This book will educate you enough to be able to answer these and many other important questions.

"Bootstrapping Your Business" --
From the founder of RightNow. The amazing story of how a geographically-challenged (Montana) entrepreneur built a world class business.

"Purple Cow" --
Dead simple premise, the key to marketing is to build something remarkable.

"The Art of the Start" --
The Art of Pitching, Marketing and Funding your Startup.

"The Innovator’s Dilemma" --
If your startup beats all the odds and becomes hugely successful prepare yourself for the innovator’s dilemma, cannibalize your product before someone else does.

"The E-Myth Revisited" --
How-to create a business not a job.

"Permission Marketing" --
The greatest marketing asset your startup can build is the permission to market to your customers and prospects.

"Growing a Business" --
Sincere advice for creating a company culture that your team and customers will love.

"The Cluetrain Manifesto" --
Successful marketing is a conversation.

"Bottom-up Marketing" --
Pure bottoms-up execution. Marketing tactics to grow your business.

davidwonOct 11, 2009

Wont vote for lists like this unless you take the time to tell me why I should read them. I have some of those books, others I'm not so sure about.

Here are the ones there that I agree with for sure:

* Growing a business. It has stood the test of time, and despite being about a non high tech business, is still quite relevant in terms of general advice. Buy this instead of the 37 signals book.

* Art of the Start. It's brief and to the point. Nothing earth shattering.

The Innovator's Dilemma is good too, but is very summarizable, in my opinion.

cmeronJune 26, 2011

A great book explaining exactly this: The Innovator's Dilemma (http://www.amazon.com/Innovators-Dilemma-Technologies-Cause-... -- I don't make money from this link)

I think every entrepreneur should read and understand the theories illustrated in the book. It made me realize a lot of things, and understand better why old/established businesses are often replaced by startups.

sjcsjconJan 29, 2015

I didn't know this. Brilliant.

"Having read The Innovator’s Dilemma, Bezos started a separate company in secret where no one but him had oversight into what the company was doing. The new company’s objective was to disrupt Amazon’s book selling business. They were giving great talent and as much resources as they wanted. They did not care about profits and only cared about building a product to disrupt Amazon’s book selling business. They came up with the Kindle."

baristaGeekonDec 20, 2014

-Have teached and tutored people in programming, for free.

-Organized an event for +200 people with +10 sponsors for a non-profit.

-Read amazing books, most notably: Zero to One, The Innovator's Dilemma, Good to Great and A Brief History of Time; among others.

-Considerably improoved my competitive programming skills

-Made various sites, I'm rocking on front-end dev

-Went to India to teach various subjects to unprivileged kids

-Went to Dubai to share time with my dad after having him away for 19 years

-Traveled to the US 2 times (Florida and North Virginia)

-Have written essays which really smart people are debating around the internet

-Despite the heavy workload, I'm keeping up with college

scarface74onMay 21, 2020

Read the Innovator’s Dilemma. It’s all about asymmetric competition and how to compete against a monopoly. All of the FAANGMs got to be that way by toppling a previous market leader.

billswiftonNov 22, 2010

90% of innovation in most fields comes from low end products working their way up - hasn't anyone here read Christensen's The Innovator's Dilemma? In fields from steel, backhoes, and IT most innovation starts with something that isn't quite good enough and works its way up quality. The tablet discussed in the original post may be just a cheap knock-off that isn't going to have any effect. But then how did they get the cost that low? Maybe there is something there to build on too? Only time and a bit more work will tell for sure.

cliffcroslandonJan 19, 2014

There appears to be an implicit assumption in many of these comments that success is measured solely by career progress. The vibe seems to be something like: "How can I successfully compete with these folks who do nothing but work?"

The truth is, maybe you shouldn't try. Clayton Christensen, author of the mega-influential book, "The Innovator's Dilemma," wrote another book that addresses this issue called, "How Will You Measure Your Life?" In it, he recounts how none of his bright, talented, and good-natured classmates from Harvard Business School graduated with plans to get divorced, become ostracized from their children, and end up in prison. Yet some of them did.

He claims that it's easy to optimize for career success because it's straightforward to measure, whereas success in relationships and raising children is only apparent after many years of hard work.

Ultimately, the book encourages its readers to determine their own definition for success and build a strategy to achieve it. If your definition of success includes a certain minimum level of career accomplishment, but also strong, happy relationships, and satisfaction from meaningful volunteer work, then you should not optimize solely for career accomplishment. And perhaps you shouldn't feel weighed-down by the need to compete with exclusively-career-focused individuals.

Quote from interview with Clayton Christensen putting this advice into practice:
"Most people have never thought through how they're going to allocate their time. You need to make a decision in advance. I never work on Saturday. I don’t ever work on Sunday either. If you make that decision on a macro level once, when all the incremental decisions arise on an incremental basis, life is easier."

davidwonApr 12, 2010

Part of what Christensen (any relation, pchristensen?) talks about in The Innovator's Dilemma, which covers disruptive technologies ( http://www.squeezedbooks.com/book/show/13/the-innovators-dil... ) is that more often than not, incremental improvements are dominated by existing companies, because they're operating in a space they're comfortable, and good, in. This makes it difficult for new companies to compete.

Now, there's a lot to be discussed there, and a huge need for actual statistics, but I think the idea isn't without merit.

adaisadaisonJan 24, 2020

When I was in college I read “The Innovator’s Dilemma”. It totally changed my life. I emailed Dr. Christensen and he responded! I thought i was the king of the world.

Dr. Clayton Christensen’s books are some of the few ‘Business’ books that I ever recommend to friends or colleagues. I find that “The Innovator’s Dilemma” is applicable to almost all aspects of life.

Dr. Christensen will be greatly missed.

adaisadaisonJune 29, 2021

This is most excellent - lots of stuff I’ve not heard about nor read. Looking forward to checking these out this year.

My personal recommendations are to read “The Innovator’s Dilemma” by the late Clayton Christensen and “Ecclesiastes” (ESV for Native English speakers) by Koholet.

The Innovator’s Dilemma” has had a major impact on me. Keep moving the ball forward and keep finding the biggest market despite what your current market thinks.

“Ecclesiastes” is a great reminder that we will all die and it is good to be apart in the present. To innovate. To make things better regardless if we will live to see the positive impact or not.

Both are honestly great books about life in general too.

lackeronFeb 20, 2009

Seems funny to talk about IBM in this context but they did start out making punch cards in 1896. They successfully made the transition to computers, mainframes, and then PCs, but then finally missed the shift from hardware to software. From about 1896-1980 they were pretty on the ball, though.

Also AT&T has made the transition from fixed to cell phones, okay so far.

It's a lot easier when the new business has the same business model but new technology. When the business model changes along with the technology, often the established company doesn't view change as "profitable enough" and decides to fight the future. If you're curious about this "The Innovator's Dilemma" is a really good book.

10renonJuly 16, 2010

This is by Clayton M. Christensen (The Innovator's Dilemma)

single page: http://hbr.org/2010/07/how-will-you-measure-your-life/ar/pr

toomuchtodoonMay 16, 2021

Such innovation will need to come from organizations that aren’t entrenched and whose existence doesn’t depend on scarcity. Higher Ed isn’t going to voluntarily obsolete itself. (See the book “The Innovator’s Dilemma”)

Support apprenticeships and on the job training alongside online courses and universally accessible community college.

pavlovonNov 14, 2020

The Innovator’s Dilemma” has a rather terrible track record as a handbook for tech corporations.

Nokia’s leadership was also big fans of this book in 2000-2010. They saw themselves as the nimble disrupters, eventually eating away all computing markets with their cheap plastic phones and a smartphone OS derived from embedded systems. If Nokia would just keep adding features, the Christensen theory promised that they’ll one day own the upscale markets too, like in all those case studies in the book.

Instead Nokia’s business was destroyed by actual innovation: Apple combined a new kind of mobile UI with an OS derived from high-end PCs. It didn’t fit on the ladders of innovation shown in the book. It wasn’t a cheaper thing becoming good enough, but an expensive thing that was nearly impossible to manufacture initially. And that’s why Nokia thought they could safely ignore it, until it was too late.

allie1onMay 25, 2019

Few suggestions that didn't make that list:
The Innovator's Dilemma (and everything by) - Clayton M. Christensen
Measure What Matters - John Doerr
Obstacle is the Way - Ryan Holiday
Factfulness - Anna Rosling Rönnlund, Hans Rosling, and Ola Rosling
Grit - Angela Duckworth

raganwaldonMar 1, 2010

I don't recall Kevin blogging about startups. It was a movie. Honestly, this title seems a little over the top.

As for the advice... It's good but there is a world of difference between testing something you've built and asking people if they'd want something you haven't built. In "The Innovator's Dilemma," the case of excavators is used as a case study.

If you had asked construction managers whether they wanted hydraulic excavators instead of cable excavators, they would have laughed you out of the industry. The hydraulic excavators of the day were flakey and much smaller than the cable excavators. Nobody who was using excavators would want one.

The point was that hydraulic excavators ended up creating entirely new markets. Likewise, my own personal example is the GUI. I remember when this was just a research fancy at Xerox. I used a Xerox Star at Humber College in Toronto. Great stuff, but priced in the stratosphere.

If you'd asked anyone whether they needed a mouse and bitmapped screen to replace their CP/M word processor, you would have been laughed out onto the sidewalk.

Yet look at what we have today. Some things should be shown, and even then you might have to keep plugging until a light goes on and some entirely new market (like desktop publishing) springs up to use your innovation.

SatvikBerionSep 17, 2012

I wouldn't trust Good to Great. Almost all the predictions it made turned out to be wrong. Contrast this to The Innovator's Dilemma, where most of the predictions the author made turned out to be correct.

More detail from the Wikipedia Article[1]: "Steven D. Levitt describes how he was inspired to read the book by the "phenomenon" it had become, and noted that many of the companies selected as "great" had since got into serious troubles, such as Circuit City, while only Nucor had "dramatically outperformed the stock market" and "Abbott Labs and Wells Fargo have done okay". Overall, investing in the portfolio of those 11 companies in 2001 would result in actually underperforming the S&P 500[4] Levitt concluded that books like this are "mostly backward-looking" and can't offer a guide for the future.[5]"

[1]: http://en.wikipedia.org/wiki/Good_to_great

sixhobbitsonJuly 13, 2020

As someone who has just launched a business to help companies produce useful free content for readers in return for their potential business, this is really worrying trend.

That said, I have full faith in people. Specifically for people to drop Google and move to smaller search engines if Google no longer shows them the best content.

And to use adblockers. Google gives me fairly good results most of the time with uBlock Origin and I'm always surprised by how bad the results are without it (when I see only ads).

I blame OKRs and quarterly planning. Those that care about the 10-year health of a business are shouted down by those who get bonuses by sacrificing long term gain for short term gain.

Can definitely recommend The Innovator's Dilemma [0] for those who haven't read it yet.

[0] https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

btillyonSep 14, 2009

Absolutely. We make up narratives, then fit facts and stories into those narratives.

For an excellent example, read Good To Great then read The Innovator's Dilemma. Both books look at the rivalry between Nucor and Bethlehem Steel. The difference is that Good to Great tries to fit that example into a theory of great CEOs, while The Innovator's Dilemma tries to fit it into the narrative of disruptive innovation. So in Good to Great it is hard to see why Bethlehem Steel was full of idiots, while The Innovator's Dilemma makes it painfully clear why the bad decisions that Bethlehem Steel made were inevitable given their customer base and market pressures.

Same story. Same facts. Different narratives. Radically different impressions of the competence of the people involved.

simonebrunozzionNov 22, 2020

Today I decided to "launch" an idea that I had just a couple of hours ago.

The idea is simple: to summarize a book in a series of tweets; if people want to read the book, they click an affiliate link that generates money.

I have no plans for the future of this idea. But I wanted to do, to launch something today.

I picked the book I was reading, "How will you measure your life?", by Clay Christensen, famed author of "The Innovator's Dilemma".

I liked the book, despite I think it could have been written differently, and more concisely.

Let me know what you think - of the book, and the idea of course!

e1gonFeb 8, 2019

For me it's the opposite: for example, I had watched countless videos on "disruption" but did not fully grasp it until I read The Innovator's Dilemma. The same holds true for theory of constraints vs reading The Goal, Robert Cialdini's works on influence, Richard Dawkin's views etc. In all cases, I thought I understood the material before reading the original source, and in every time the books blew me away.

Perhaps there is a dimension about how rigorous the thinking is behind the book. I struggle to imagine a YouTube video that could effectively and convincingly unpack ideas from The Intelligent Investor, The Sovereign Individual, Sapiens, etc. Other topics like "How to get rich with x" or pop-sci covered by the likes of Kurzgesagt are simplistic enough for a video essay, but those are seldom worth consuming regardless of medium.

ekanesonApr 1, 2010

If you're interested in this, you should check out The Innovator's Dilemma by Clayton Christensen. He walks you through how large companies (most of his examples are from the hard drive industry) are often structurally incapable of embracing the revolutionary change which will inevitably overtake them.

http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... (not an affiliate link)

btillyonJune 21, 2011


In The Innovator's Dilemma there is an analysis from the 90s presented about when pure electric cars would be economically viable for a mass market. Based on then-current technology projections, it would happen around 2020.

The critical combination that their analysis found necessary is price below a certain level, sufficient acceleration to merge into an Interstate, sufficient range, and fast enough recharge time. The Tesla currently fails on price and recharge time. It over-delivers on power, and has about the right range.

maukdaddyonFeb 26, 2012

1. Read The Innovator's Dilemma.

2. Tablets are the future. If Adobe doesn't make a photoshop for the iPad, someone else will and Adobe will go out of business.

laurentlonNov 17, 2018

The Innovator’s Dilemma by Clayton Christensen (the book itself is 20 years old but I only read it recently). It’s a fantastic analysis of why successful companies get displaced by disruptive technologies —or, the other way around, why it’s so complicated to innovate in successful companies.

The underlying reasons exposed by the book are timeless and universal. As I read the book (which, again, is 20 years old and focuses on the hard drive industry) I recognized all the pitfalls my previous company went through as it was trying to adapt to public Cloud.

This book is a powerful lens to look at disruptive innovation, well-written and very thoroughly researched. A must read if you’re working in technology IMO.

kensonSep 14, 2016

I view the ARM as a perfect example of disruption in the Innovator's Dilemma sense. Intel has always been pushing the boundaries of processor design, using as many transistors as possible, and nobody could threaten them with better technology.

The ARM1 on the other hand was built to be simple (because the designers hadn't built a processor before). They didn't care at all about maximizing density (the layout is pretty awful). They cared about low power consumption only to the degree it meant they could use cheaper packaging.

But this low-end ARM processor managed to hit the low-power needs of mobile devices (starting with the Newton). And now the ARM processor is a serious threat to Intel, not because ARM out-raced Intel at the more-transistors game, but because ARM was a simpler, cheaper product that disrupted the market.

I think 99% of the people who use the word "disruption" haven't read The Innovator's Dilemma (and they should), but to me the ARM clearly fits the pattern in the book.

mch82onApr 29, 2019

Clayton Christensen publishes “The Innovator’s Dilemma” in 1997.[1] No incumbent is safe. It can be easier to be first to market, but being first doesn’t mean permanent victory. If you believe your solution solves a problem people have then it’s a fine choice to keep going.

Also, you’re going to need alignment between your funding, the skills of your team, and your proposed solution.

[1]: The Innovator’s Dilemma, Wikipedia, https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma

SatvikBerionMay 5, 2012

This is the key point of The Innovator's Dilemma. On the one hand, disrupting yourself means cannibalization and strategies that almost certainly seem unprofitable on paper. On the other hand, if you don't disrupt yourself someone will do it for you.

Considering Apple's success I'm inclined to say that disrupting yourself before anyone else has the chance to is the right long-term move, but I haven't studied the topic in enough detail to be sure.

davidwonAug 22, 2007

All the suggested computer books are pretty good, but you'll bump into those sooner or later if you're looking. You can't avoid them.

What' I'd recommend, in addition to those, are some mind-broadening books that give you some ideas about other disciplines. I'm particularly interested in economics, because that's very important for understanding the whys and hows of the market. If you just want one recommendation, "Information Rules" is a good one.

I summarized a bunch of books I like here:


In particular, others that I would recommend:

- Crossing the Chasm

- In Search of Stupidity: Over Twenty Years of High Tech Marketing Disasters

- The Innovator's Dilemma

snowwrestleronMar 6, 2013

Steve Jobs did listen to customers--more than most business executives. He famously read his own email and would write back to customers directly. He made major strategic decisions based on customer feedback, for instance by reversing direction and releasing an SDK for native apps on the iPhone.

He just didn't let customers set the future direction of products. The reason for that is well explained in The Innovator's Dilemma.

prof_hobartonMay 31, 2016

Although I agree that having a business plan that's based on nothing more than a concept of "being disruptive" is not much of a plan at all, I feel that in some parts, he's picking a strawman and arguing against that.

He claims that "I’m sure what the presenter of the slide was getting at was Clayton Christensen’s definition of disruption from his classic book The Innovator’s Dilemma. ".

He then goes on to say (talking about Square and Uber) that "neither of these companies were disruptive in The Innovator’s Dilemma sense". However, I'd be surprised if the presenter wasn't thinking precisely of people like Uber and the type of "disruption" they've brought to the taxi industry.

So, if they are thinking of Uber, and if Uber's disruption isn't the sort being talked about in the Innovators dilemma, then I suspect they weren't thinking of Christensen’s definition at all.

I'm not sure why disruption has to be less functional - it just needs to be tackling the root problem (and often redefining what that root problem is) in a different way to the incumbent.

btillyonNov 16, 2012

I would personally not buy their stock any time soon.

I keep meaning to write a blog entry on this. To understand my reasoning it helps to be familiar with The Innovator's Dilemma (see http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ca... for the book). The basic assumption of that book (backed up with many examples in industries from ship technology to hard drives to backhoes) is that any technology that has a well-established value proposition will tend to show exponential improvement on that value proposition over time. Users needs also follow an exponential curve, but it tends to be slower than the technology improvement curve. (A lot slower.) Therefore if you have 2 technologies competing for that market, eventually the cheap crappy one will be good enough, and after that point hits it wins. The premium technology will always show great revenue curves even once their low-end users start switching, but those curves hide a great oncoming disaster.

In every market that Apple is in, it is the premium product. It has competitors. And its competitors have a pretty good sense of the value proposition that they need to deliver. Therefore every market line for Apple is doomed. They show no signs of having new ones to wow us with, so Apple has a world of hurt coming.

But, you may ask, why did they not have this problem historically? My answer is because Steve Jobs' genius lay in constantly finding and delivering new value propositions. He found and defined markets for pretty computers, light laptops, smartphones, and so on. The whole Innovator's Dilemma argument depends on competing on a known value proposition, and Jobs never sat still long enough for his competitors to do that.

Of course Jobs is now gone, and there is no sign that Apple has anyone who has that talent.

6renonApr 25, 2011

I think pg was just creating a vivid image, so its factual truth is irrelevant.

I'm nonplussed at how often pg sums up my own views. One cause is that the books I read about startups are based on SV stories - while pg talks to the people who actually did them, batches of startups who are currently doing them, and he's in the story himself. Also, I've likely read some of what he's read (e.g. The Innovator's Dilemma).

So, I find YC lore very helpful, because of the truths it contains. But citing it purely as lore (without understanding it) would probably count as a severe negative. I'm not sure about the case of providing an alternative expression of the same idea, especially if pg's is more succinct/appropriate - but it's always helpful to speak the same dialect as your audience, if only for communication.

wintercarveronMay 13, 2019

Has been on my list for a while! Thanks for the nudge. BTW, as a fan of Christensen's classic The Innovator's Dilemma, I thought Loonshots was quite good as an alternative perspective where Product-type and Strategy-type innovations are discussed in comparison to Christensen's sustaining vs disruptive innovations.

btillyonMay 11, 2021

Electric cars and vertical rocket landings were ideas you could show would work eventually with a little napkin math. It is a good critique of humanity that so many "experts" neglected to do that napkin math and just declare it impossible.

Oh really?

_The Innovator's Dilemma_, written 20 years ago, includes a chapter based on an industry analysis that said that on current technology trends, mass electric cars would come viable around 2020. Guess what? Around 2020 mass electric cars became viable! Elon Musk figured out that high end electric sports cars could become viable earlier, and built a company around it.

How about those reusable rockets? https://en.wikipedia.org/wiki/Reusable_launch_system documents a history of attempts at making reusable systems literally from the dawn of the Space Age. Everyone knew that in theory it should be possible. The problem was that in practice they didn't work well enough. (For example the Shuttle wound up costing more per "reusable launch" than an expendable rocket would have.) What SpaceX perfected is a vertical suicide burn. It is called a suicide burn because there is no margin of error, and any mistakes /will/ kill you. But it is also the most efficient way to land the rocket. Nobody did it before Musk because nobody was willing to trust their software control system that much. And even still, when humans take a trip on Dragon we /don't/ trust their skills at a suicide burn for the return. We instead parachute into the ocean, just like Alan Shepherd did 60 years ago. (Elon hopes, of course, that Starship will change that.)

So your comment critiquing humanity by critiquing all of the experts who failed to do back of the napkin math showed more about your ignorance than the ignorance of the experts.

btillyonNov 17, 2012

This looks like a follow-up take on the similar TechCrunch article discussed at http://news.ycombinator.com/item?id=4791710.

Let me repeat my comment there.

I would personally not buy their stock any time soon.

I keep meaning to write a blog entry on this. To understand my reasoning it helps to be familiar with The Innovator's Dilemma (see http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ca... for the book). The basic assumption of that book (backed up with many examples in industries from ship technology to hard drives to backhoes) is that any technology that has a well-established value proposition will tend to show exponential improvement on that value proposition over time. Users needs also follow an exponential curve, but it tends to be slower than the technology improvement curve. (A lot slower.) Therefore if you have 2 technologies competing for that market, eventually the cheap crappy one will be good enough, and after that point hits it wins. The premium technology will always show great revenue curves even once their low-end users start switching, but those curves hide a great oncoming disaster.

In every market that Apple is in, it is the premium product. It has competitors. And its competitors have a pretty good sense of the value proposition that they need to deliver. Therefore every market line for Apple is doomed. They show no signs of having new ones to wow us with, so Apple has a world of hurt coming.

But, you may ask, why did they not have this problem historically? My answer is because Steve Jobs' genius lay in constantly finding and delivering new value propositions. He found and defined markets for pretty computers, light laptops, smartphones, and so on. The whole Innovator's Dilemma argument depends on competing on a known value proposition, and Jobs never sat still long enough for his competitors to do that.

Of course Jobs is now gone, and there is no sign that Apple has anyone who has that talent.

SatvikBerionAug 13, 2012

The ideas in this article are weakly argued and poorly researched. The theory of disruptive innovations in The Innovator's Dilemma by Clayton Christensen provides a much better explanation of why successful companies fail. We see this happen more rapidly in the tech industry than others, but it happens everywhere-just at different speeds.

Looking at the graphs at the top-Hewlett Packard, Nokia, and RIM all took heavy hits from not recognizing disruptive innovations until it was too late, and lost a huge chunk of their marketshare as a result.

russellonJan 11, 2009

The article discusses Clayton Christensen's "The Innovator's Dilemma, When New Technologies Cause Great Firms to Fail", which shows why large entrenched companies don't survive disruptive technologies. The dilemma for the incumbent companies is, do I make the the incremental improvements in the current product (which the customers are demanding) or do I cannibalize it in favor of a (currently) niche product?

Innovator's Dilemma is out of print, but I strongly encourage any would be entrepreneur to get hold of a copy. I consider it to be one of the most important books to read and understand. It will show you how to be disruptive. The bigger your competitors, the better.

adammichaelconSep 25, 2011

You might not see it because it's such an inconvenient thing to see; afterall your income is tied to it. The main factor keeping your income so high is the AMA and its regulatory allies.

With rising costs and increasing pressure to save money in healthcare, you better believe that one day a computer will do your job.

PS You might want to re-read The Innovator's Dilemma and The Innovator's Solution.

haltingproblemonNov 14, 2020

Except the empirical data does not really back Clay's thesis in The Innovator’s Dilemma. Jill Lepore had an excellent analysis of the track record in a famous new yorker article (1) which caused pmarca to melt down on twitter. In his defense, I think the disruption thesis holds when the industry is fragmented. When a disrupter goes up against a monopoly/duopoly or oligopoly, it fails. Just a conjecture.

Even more generally, in business there are few hard and fast rules and even the ones that work lose their efficacy as the participants learn and adjust to them. Which is a good thing for the system as a whole. I would speculate that entrepreneurs should now look beyond disruption.

(1). http://www.newyorker.com/magazine/2014/06/23/the-disruption-...

TloewaldonNov 23, 2015

Since I can't link to the text of the book (and don't have my copy handy), here's a New Yorker story on the piece:


'In fact, Seagate Technology was not felled by disruption. Between 1989 and 1990, its sales doubled, reaching $2.4 billion, “more than all of its U.S. competitors combined,” according to an industry report. In 1997, the year Christensen published “The Innovator’s Dilemma,” Seagate was the largest company in the disk-drive industry, reporting revenues of nine billion dollars.'

and later in the same article:

'As striking as the disruption in the disk-drive industry seemed in the nineteen-eighties, more striking, from the vantage of history, are the continuities. Christensen argues that incumbents in the disk-drive industry were regularly destroyed by newcomers. But today, after much consolidation, the divisions that dominate the industry are divisions that led the market in the nineteen-eighties.'

and, finally, this gem:

'On March 10, 2000, Christensen launched a $3.8-million Disruptive Growth Fund, which he managed with Neil Eisner, a broker in St. Louis. Christensen drew on his theory to select stocks. Less than a year later, the fund was quietly liquidated: during a stretch of time when the Nasdaq lost fifty per cent of its value, the Disruptive Growth Fund lost sixty-four per cent.'

So he wrote a book on disruptive innovation, where his main exemplar was how Seagate et al were felled by small, agile innovators, and published it the year Seagate crushed the small, agile innovators.

The book is full of wrong (it's basically fairly accurate about how innovation gets stifled in companies that fundamentally aren't innovative -- companies driven by sales commissions for example -- but those aren't the interesting cases; Apple, Kodak, Polaroid, AT&T, Xerox -- the companies which ought to be the best examples of his case -- don't follow his storyline at all).

erikpukinskisonAug 19, 2011

My point is, saying "be disruptive" is about as valuable as saying "just win!"

I agree it's not the most prescriptive advice, but it's not the same as "just win!". The term "disruptive technology" was coined by Clayton Christensen, who has written several books on the topic. In The Innovator's Dilemma he describes several disruptions in many industries in great detail.

The scenarios he describes (which the OP is referencing by using the term "disruptive") are not generic "here's a company who won!" situations. They are very specific. Namely, a competitor introduced a new technology that was inferior to established technologies in many important ways, but which was vastly superior in at least one. And importantly, it was superior in a way that could not be "backported" to the mainstream technology.

We talk about defensibility here sometimes, and each of these new technologies has a clear defensibility strategy.

Every Google Doc has a URL your coworker can click in an email, and be immediately editing the document, on any computer, whether or not they've paid for Office. That is a feature that will never be added to Office. It can't be added to office.

Telling Google (or HP, or Amazon) to be disruptive is telling them to focus on finding features that Apple won't or can't add to the iPad, and building your products around those.

That's a hell of a lot more to go on than "just win".

eevilspockonJuly 15, 2012

"Overthrown" does not mean "disappear", it means "no longer king."

IBM was once the king of computing. It was overthrown by Microsoft. Microsoft was then king, but it is no longer, though those living in the past will point to its continue dominance of the PC, a dominance that is both declining and becoming more irrelevant. Google was crowned the king of the web, with users spending most of their time on google.com, but now they spend far more time on Facebook.

> The Roman and British empires lasted hundreds of years.

We're talking technology, not geopolitical power. The former operates on a vastly accelerated time scale, aka "Internet time". I recommend you read the Innovator's Dilemma, or at least the cliff notes on Wikipedia: http://en.wikipedia.org/wiki/Disruptive_innovation. There's a nice list of things many of which weren't expected to be overthrown so quickly.

I'm wondering if you might actually be a celeb: http://www.youtube.com/watch?v=eywi0h_Y5_U.

6renonMar 23, 2013

1. the worth of an innovation is relative to the previous methods available. So in your example, it would be reasonable for each of the workers to have altavista or whatever (i.e. not limited to 100 pages of google search).

2. This is more subtle: the value of an innovation doesn't vary necessarily linearly with some attribute of it. This is because an innovation has no intrinsic value - it only has value when in the hands of a person who needs it. That is, value is an attribute of the need, not the innovation. Might sound academic, but it matters when an innovation is more powerful than needed. It gets better and better, but nobody care (see The Innovator's Dilemma). In your example, oddly enough, latency really does matter (though you can imagine a certain speed where it's indistinguishable from instant for practical purposes, probably around 100ms). Also in your example, the size of the internet also matters, because the more there is, the more likely the desired answer is present, and the more likely it is to be relevant. So, this subtle point isn't relevant o your specific example, but I think it is relevant to your concept of measurement with a "scale of innovation", in general.

btillyonFeb 11, 2013

It is true. And the trend has been obvious for longer than most people realize.

Go read chapter 9 of The Innovator's Dilemma, first published in 2000. This chapter is based on an analysis he did of electric cars. Given the rate of battery improvement he thought that a mass market affordable electric car would be viable for the mass market somewhere around 2020.

At current trends, that's not too far off from when Tesla can be expected to try to make a mass market electric car aimed at ordinary people.

SriniKonMar 3, 2011

Just awesome. Thanks for posting. Recommend for anyone interested in building graphs or knowing about how things work.

Few things I liked are:
. Geoffrey Moore's - Crossing the Chasm - start with small set of graph to be useful and then target the bigger market - video around 14min
. the way entrepreneur should classify their product in heterogeneous vs hybrid vs homogeneous wrt to a buyers/sellers - video around 17min
. Clayton Christensen's - The Innovator's Dilemma - how great things always start as a toy product then disrupt industries - video around 47min

alanthonyconJan 19, 2011

Forgive me, but I just finished (finally) reading Clayton Christensen's "The Innovator's Dilemma," so naturally, this looks like another prime example to me.

It is amusing to watch the entertainment execs flail around. But apparently, it's not necessarily because they are incompetent. Ironically, it may be their actual competence in their current positions that prevents them from seeing the value in the long tail (or anything else made possible by new technology).

They have long made money a certain way. Now, a new method (internet streaming) is coming along. They would like to use it, but they can't. They can't because it doesn't satisfy their current customers.

Netflix is happy to pay for and take the deep catalog. They are new and therefore able take the risk in creating the new market.

I can't give the theory a good showing myself in a brief comment. But if you haven't read the book yet - go do it now. It's amazing how stuff he wrote ten years ago about older companies sounds like a history lesson to me today about Microsoft, Google, et al.

vo1donDec 19, 2017

- The Innovator's Dilemma by Clay Christensen

- Thinking, Fast and Slow by Daniel Kahneman

- A Briefer History of Time by Stephen Hawking

- The Lean Startup by Eric Ries

- Steve Jobs by Walter Isaacson

- The Industries of the Future by Alec Ross

- Never Split the Difference by Chris Voss

- Start with No by Jim Camp

- How Google Works by Eric Schmidt and Jonathan Rosenberg

- The Everything Store by Brad Stone

- The Inevitable by Kevin Kelly

DanielBMarkhamonJan 9, 2011

Welcome to the study of how groups of people interact. We'll probably have it all figured out in a few hundred years or so :)

Couple good books come to mind. The best of which is probably The Innovator's Dilemma, for how new ideas get killed by companies.

There are a lot of reasons what seems obvious won't actually work -- even though many companies still keep kicking that can down the road. This whole area is like a siren's song both in the corporate world and in government. Everybody is building "centers of excellence" and "knowledge incubators", and whatever else buzzwordy thing they can come up with to spend money. But the record of such efforts is appalling. Just for one example, take a look at Microsoft -- tens of billions in cash, tens of thousands of brilliant people, and they're lucky to get a release of windows out in time. Too many reasons to go into in this short of a space, and of course there are a lot of true believers that would argue with my conclusion. Suffice it to say that smart companies have figured out it's easier just to write a check.

sshumakeronMar 29, 2010

Guns, Germs and Steel - It will change the way you think about the course of human development and the forces of history.

The Innovator's Dilemma can be summed up in two paragraphs but is still worth reading - it explains why giant companies fail to keep innovating.

Stumbling upon happiness - how people's perception of what makes them happy has little basis in what actually makes them happy - and why.

btillyonFeb 16, 2010

Anyone who wants to try to create a new market (as opposed to get into an existing one) should read The Innovator's Solution. I say this because of the excellent chapters explaining all of the ways in which over-investment can kill a startup in a small market which is likely to have a big future potential. (The preceding book The Innovator's Dilemma is also interesting, but doesn't provide any discussion of this dynamic.)

The key phrase that sums it up is, Good money is impatient for profit and patient for growth. Bad money is impatient for growth and patient for profit. Unless your company is sized small enough to find and be interested in whatever existing market can be found, you won't be in a position to grow with that market with the right cost structure to take advantage when the market opportunity grows.

Analemma_onOct 16, 2017

> People underestimate how god-awful slow the big car makers are

I think it’s exactly the opposite. People enamoured with Tesla and Musk tend to over-estimate how slow the old car makers are, because they’re so used to the “Silicon Valley story” that we will inevitably come in and take over everything.

Look: it’s 2017. Everybody has read the Innovator’s Dilemma, everybody knows how fast e.g. Palm, Nokia, etc. went out of business. The old companies aren’t stupid, and they aren’t sitting around waiting for Tesla to eat their lunch.

> None have anything like the software experience.

GM is arguably in the lead right now as far as autonomous driving capability. They’re at least tied with Google and certainly ahead of Tesla.

I’m going to be blunt: you don’t sound like a very good investor. You sound like someone who makes decisions based on hype and wishful thinking instead of real evidence. My recommendation would be to get out now before you lose your shirt.

bumbadaonFeb 7, 2021

You probably already know enough of machine learning and can study other topics in order to make ML more useful, for example:

- Real marketing(people misunderstand marketing as sales and advertising) that is the study of people's needs

-History, in particular History of inventors and inventions that really changed the world, like paper(also papyri and pergamine) Gutenberg press, crossing the Atlantic on a ship,electricity, bicycles and Ford cars, antibiotics, rockets, nuclear power, Internet.

-Read books on innovation, like "The Innovator's Dilemma" that talks about most innovation having organic growth, looking so small at the beginning and then growing proportionally to itself. Almost everybody that cares about absolute things, like fame or fortune, ignoring it at first because the absolute value is so low.

Once you do that you will literally "see the future". You will recognize patterns that happened in the past and are happening right now. And you will be able to invest or move to those areas with a great probability of success.

SatvikBerionMar 14, 2014

Former PM here. The Product & Project management jobs vary tremendously by company, and even within a company. Your best bet is to reach out to people who've had similar jobs in the same company and ask them for advice.

That said, I highly recommend The Innovator's Dilemma[0] and Inspired: How to Create Products Customers Love[1]

[0]: http://www.amazon.com/The-Innovators-Dilemma-Technologies-Ma...
[1]: http://www.amazon.com/Inspired-Create-Products-Customers-Lov...

deveaconAug 1, 2012

>Is that a fact? My interpretation of the Christensen version of disruption (which I'm told is pretty much official since he wrote the book on it- literally)

His definition of disruptive technologies actually appeared first in his article: Disruptive Technologies: Catching the Wave. The book you are thinking of is 'The Innovator's Dilemma' in which he expounds further on the topic he introduced in Catching the Wave.

At any rate:

>Disruptive technology typically improves in a way that by being lower priced and designed for various disciplines of consumers. [2] Instead of allowing consumers with lots of money or lots of skills to use it, disruptive technology is designed in which allow “whole new population of consumers” to use it, access its services. [3]

I'd say that Google's service falls squarely within this definition. Not only to a 't' on the pricing end, but the packaged technologies certainly opens up a 'whole new population of consumers' to using it based on attributes besides cost. They are packaging wifi distribution and cloud storage together, along with mega-high throughput on the data speed end. They are taking this directly to a whole new population of consumers (the general consumer market). This market did not affordable access to this technology previously.

rfreytagonMay 24, 2009

I came here to also disagree with the article. You -just- beat me to it and for similar reasons.

One key mistake the author of this article made is how vast is an economy of potential collaborators versus the limited number of people extant within one company. And being in the same company is no guarantee that you will be motivated or -allowed- to be motivated to work to a shared goal. That last point is particularly addressed in "The Innovator's Dilemma." Large businesses got large by being very good at focusing on an established goal. A new goal is particularly unwelcome.

I wonder what Clayton Christensen would make of Apple (Apple II->Mac, MacOS <6 -> System X OS, iPod [where did that come from to become a huge share of revenues?], iPhone). Steve Jobs seems to have been innovating despite what Clayton writes. I still think Clayton is right but how does Steve Jobs do it over and over?

btillyonMay 15, 2012

I doubt Forbes serves its website from an iPhone.

Based on http://toolbar.netcraft.com/site_report?url=http://forbes.co... they don't use Microsoft software either. As for Microsoft's profits, anyone who has read The Innovator's Dilemma can see all of the signs of a late stage great company that has failed to address disruptive innovations. They will continue to have great profit margins as they bleed customers until they wind up with no business left.

willart4foodonFeb 13, 2019

Well it's a question of ego. 2 parts:

1. If GM were to - like you say - "work with Tesla", who would be in charge of what to do, when and how? GM would want GM cronies to do that. It would be like Apple after they fired Steve Jobs
2. Even if TSLA would be in the driver's seat (pun intended) who would be working for whom? TSLA is already as big as GM in terms of market cap, and with better future, but in a TSLA-GM JV GM would want to be "da boss".

Things are fine the way they are GM, F, FCAU will either die, consolidate or become irrelevant; and the new TSLA-like companies will be the new "energy and transportation" players.

Clayton M. Christensen's The Innovator's Dilemma is still valid.

8renonOct 26, 2010

Adobe is an unusual large company, in that it has successfully managed the transition between closed and open before. Starting with the fonts for postscript printers, just a few years after Adobe was founded.
Flash itself was also (somewhat) opened a few years back, to successfully fend off open source alternatives - though I don't recall if it was still owned by Macromedia at that time.
They've also known when they could successfully stay closed despite vigorous open competition, as in Photoshop vs. Gimp.

So Adobe probably understands the issues of open/closed better than anyone, and has an organizational structure that has proven able to adapt to it.

[ Though it's worth noting that MS made an incredible sacrifice to ship windows for netbooks at a massive discount, to fend off linux. Although I use a linux netbook myself, I have to admire their foresight and fortitude. Another company is Intel. Although I don't have a specific story for them, Andy Grove wrote a book Only the Paranoid Survive, and also has a blurb on the cover of The Innovator's Dilemma ("lucid, analytical - and scary" he says) - they know the danger, and have lasted a long long time, as the driver (and proposer) of Moore's Law. ]

kjhughesonJuly 5, 2019

> They just didn't have the strength to make that move, for whatever reason.

The reason is well known: BMW has been too focused on sustaining innovations extending their current strengths than disruptive innovation that will eventually displace them -- classic Clayton Christensen:

Christensen, Clayton M. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.


btillyonJuly 25, 2012

Apple's recent success has come from recognizing and creating new markets. Even in traditional computers, a large part of their current success is that they pioneered the market for people who want physically attractive computers. This is unlikely to continue to succeed for them without Steve Jobs a the helm.

As for Mac vs Windows, I'm referring to the old macs, OS 7, etc. That story ended with Apple almost dying before Steve Jobs came back and did what he did best - focused the company on creating new markets.

Moving back to your focus on profits, I think you could benefit from reading The Innovator's Dilemma and its followup The Innovator's Solution. What you'll learn is how across many types of technologies (examples include ship design, steel production techniques, earth moving machines, disk drives, etc), across many decades, whenever two technologies compete head to head, the odds very, very strongly favor the one that is cheap and crappy. Throughout the competition, all of the revenue to be made is in the established, strong technology - until they suddenly have no market left.

Given that history, there is no question what to expect in phones. The iPhone is clearly the superior option that makes more money. Android is clearly the cheap crappy option that ships more units. But both are going to improve faster than people's needs increase, and Android is going to win.

krschultzonDec 21, 2012

Whenever I read about modern desktops, I think about the graphs in the Innovator's Dilemma. [1]

The incumbent players (Intel, Microsoft, Dell, HP) are all competing on the established metrics of performance & price, but those are no longer the metrics that matter. ARM is pushing the power efficiency angle. Apple is winning on industrial design.

The entire computer industry (excluding phones, which has obviously already been disrupted) is right on the verge of being flipped on its head. There were hints of that with the netbook wave, but they weren't quite good enough. The iPad and subsequent high end Android tablets are close, but not 100% there. But we are just about at the point where ARM vs x86 is equivalent for the mass market, and that really is going to shake things up.

[1] http://upload.wikimedia.org/wikipedia/commons/thumb/8/8e/Dis...

rxlonAug 26, 2013

This list, compiled by Chris Johnson, includes a book called "Trust Me, I'm Lying", by Ryan Holiday.

One thing to note is that Chris worked with Ryan and has a close relationship with him (Chris actually wrote the trailer for Ryan's book).

And judging from Ryan's usual tactics, Chris wrote this list simply to push Ryan's book, which he cleverly included alongside clear classics like The Lean Startup, In The Plex, and The Innovator's Dilemma.

Edit: Here are some other tactics cleverly used by Chris/Ryan in the post...

1) they mentioned Ryan Holiday in the first couple paragraphs so that the reader would have some familiarity with his name and be even more likely to click through to his book

2) they included Ryan's book early in the list but not as the first, and specifically after at least one book that you probably haven't heard of, but that seems credible

3) they marked The Innovator's Dilemma (arguably the most well known book in the list) as "optional," leading one to perceive that the other books in the list that aren't marked as optional must be even better

Edit: evidence for Chris and Ryan's relationship... https://www.google.com/search?q=chris+johnson+ryan+holiday

marvinonJuly 21, 2008

This story could be picked straight out of Clayton M. Christensen's "The Innovator's Dilemma".

As of today, these small, cheap computers are in most ways that matter inferior to their monolithic laptop and desktop counterparts. But many large players fear that they will grow in market share and hence start eating their margins. Fujitsu even goes as far as to deliberately stay out of the market.

However, the only reason that these smaller machines are less capable is that most processing today happens on the local machine. If web applications grow in the direction that Hacker News hopes, there will only be games and specialty applications (research and industry, plus maybe a few consumer applications) that require the horsepower of a traditional computer. Today, you could (rightly) state that lightweight machines are unergonomic and troublesome, but history dictates that with this much demand for a niche product, these problems will evaporate in a jiffy.

Even if the future still has a huge demand for desktop processing (say, if lots of data-transfer intensive things like video editing and processing become much more popular), lightweight machines still have huge competitive benefits: light weight, small size, low price and long battery life. One can even imagine the 'low price' requirement waivered, which would give manufacturers headroom to innovate further in form factor. I'm thinking something in the direction of what the OLPC team is experimenting with: multiple touchscreens, enabling new areas of computer use. No doubt there is lots of territory to be explored here.

Fujitsu (and maybe even Dell) is making a huge mistake in not embracing this nascent market. It's a good thing for their investors that they are diversified. Give it five years, and computers resembling these will be everywhere. Fujitsu will be unable to catch up. These machines will easily gobble up the part of the market which uses laptops as portable word-processors and email-readers, and will probably expand into uses for which which today's laptops are completely unsuitable.

pcestradaonMar 30, 2012

RIM will become another case study MBA students read about when discussing the Innovator's Dilemma.

ylemonFeb 16, 2011

There's an excellent book that I'm reading called "The innovator's dilemma" which seems relevant to your case. The difficulty with established competitors is that their middle management gets in the way--that is, if you're charging less and offering less, then they won't bother competing against you because they're focused on up-market customers.

frabcusonMar 3, 2013

The Innovator's Dilemma doesn't say you have to start at a "low end" and work up. That's just how it was for the computer storage industry (the example in the book) in the second half of the twentieth century.

It says that you have to start with a new market - i.e a set of people who want to buy your product who are different fundamentally from the existing market.

Plenty of innovations are rolled out starting at the high end. An obvious example is the iPhone (which changed the smartphone market from business/hobbiest to consumer, and which began doing that with rich consumers).

Another way of looking at it... New things can be relatively expensive within their new market - the first PCs were very expensive, they just happened to be cheap compared to Minicomputers. From a product side, they looked like cheap, crap computers. From the market side, they had a totally different market (e.g. individual finance professionals, rather than large corporations).

It's natural as a geek to look just at products. You have to look at both products and markets - they are not just both important, they are the same thing (http://www.flourish.org/blog/?p=371).

Tesla's product is electric cars. It's market is people who want:
a) To not have to recharge every day on their commute.
b) To have more accessible storage space.
c) To have cheap power when gas finally gets more expensive than electricity/batteries

Short term they have been bootstrapping that using a market of people who have longer term motivations (concern about climate change or an energy crisis) which will later go mainstream in the form of c).

It's very very smart.

mch82onMay 16, 2020

“The Innovator’s Prescription” (Clay Christensen) explains the Innovator’s Dilemma better than the original book and introduces jobs-to-be-done with the milkshake story.

“Creativity Inc.” (Ed Catmull) explains how Pixar manages people & throws in a few insights from mature (post Apple firing) Steve Jobs.

“Managing the Design Factory” (Don Reinertsen) explains how to prioritize projects and analyze a business for bottlenecks in order to minimize cost of delay.

hgaonNov 26, 2016

I really wonder about his criticism of The Innovator’s Dilemma. I'll certainly admit it applies to only a subset of startups, and it probably introduced the now totally ludicrous disruption meme, but the lesson with examples of companies that used inferior but cheaper technology to find and/or create whole new markets is certainly useful, and using your "disruptive" technology to eventually eat the lunch of the incumbents gives you something to eventually shoot for. All of which I think we seldom see in people who propose to "disrupt" something.

The lessons about how incumbents are constitutionally unable to complete against this also, if sufficiently true, ought to help tamp down some the rampant paranoia I've seen so much of in startups.

erikpukinskisonMay 2, 2013

The drama around words like this is between people who don't actually use the concepts they represent. The words "disrupt", "synergy", and "cloud" are useful words ONLY if:

- You care about the high level strategies a startup might implement in order to take on an entrenched player who is playing a game no one can beat them at.

- You are seeking mutually beneficial intra-business relationships.

- You would like to provision machines without managing them yourself.

Journalists and non-practitioners fight back and forth about words like this because they have no skin in the game. I will continue happily using the word "disrupt" because I read the Innovator's Dilemma and I think Christensen highlighted a powerful concept that needed a label. And I will continue using the word "cloud" because I remember what it was like to have to buy a dedicated server every time I wanted to spin up a new service.

And I could give a rat's ass if some journalist thinks that's hokem.

laurentlonAug 13, 2020

Daniel Jarjoura recently published a fairly complete reading list that might be useful: https://techleadership.substack.com/p/the-product-leader-rea...

Some books I’ve read and enjoyed and/or found useful: The hard thing about hard things, the innovator’s dilemma, High output management, Accelerate, The Phoenix project (though I much prefer The Goal)

raganwaldonApr 5, 2010

Quite honestly the subject of "Replacing Java with Ruby/Python/..." is so complex I think it's a minefield to argue either for or against it in less than an essay.

Which organization? Product or internal app? Consulting gig or internal development? Telephone book of specs or stakeholders iteratively refining requirements? &c. &c.

It's true that I'm not writing Java any more, but the Java apps I used to write are still there making money for their owners, and none of them have called me up to say they want to do all new development in Ruby.

It's more a case of there being new kinds of opportunities afforded by a different style of development. And this is perfectly in accordance with the theory of disruptive technology put forth in "The Innovator's Dilemma."

So what was my point again? Oh yes, I agree from time to time there is talk of replacing Java, but it is a little more complex than a wholesale project-for-project replacement with all other factors remaining fixed.

If I were pitching it, I would pitch the benefits of a new way of developing software, and only when that point is made would I point out that Ruby and Javascript are tools that suit the new way more than Java.

I'd rather do that than pitch the languages and spring the "gotcha" that you'll have to change the way you develop software to be successful with the new languages.

cpetersoonApr 8, 2011

Apple's functional structure sounds like a good way to maintain consistency across product designs and nimbleness of corporate strategy.

Google's (and Microsoft's) product-oriented structure sounds like a good way to have fragment product designs and strategies and create political fiefdoms. "The Innovator's Dilemma" suggests that by placing too great an emphasis on satisfying customers' current needs (with existing products), companies fail to adapt or adopt new technology that will meet customers' unstated or future needs.

mikeleeorgonDec 4, 2011

I was a software developer, then technical manager for several years before deciding I wanted to become a product manager. This was at a large corporation where coming up with product specs, marketing plans, and business models were out of the purview of a technical manager.

I met with several product VPs I respected and asked for their advice on making the transition. One of them, also a former software developer, pointed me to the books, "Crossing the Chasm" and "The Innovator's Dilemma". They opened my eyes to a new way of looking at products and helped me successfully become a PM.

Nowadays, I try to make sure everyone on my team (in a startup environment) has read or knows the content of books like these. In a startup, everyone has a huge role in how the product is defined. However, someone who can take ultimate responsibility in prioritizing the product's features based on customer feedback, business metrics, market trends, etc., is still necessary. That person might be the CEO or cofounder or whomever, but they essentially have "product management" responsibilities.

mindcrimeonAug 27, 2013

And judging from Ryan's usual tactics, Chris wrote this list simply to push Ryan's book, which he cleverly included alongside clear classics like The Lean Startup, In The Plex, and The Innovator's Dilemma.

Trust Me, I'm Lying just might wind up as a classic itself! OK, I know it's controversial, as is the author, and I get why. But there's some solid stuff in that book. I learned a lot from reading it, and I think there's some actionable advice in there, even if you don't want to go quite as "underhanded" as Holiday may have on occasion.

Note: I have no relationship with Ryan Holiday whatsoever, beyond having purchased and read a copy of his book.

hgaonMay 27, 2010

The Innovator's Dilemma by Clayton M. Christensen (http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin...)

btillyonAug 17, 2010

True. However decades long periods of exponential improvement in technology is the norm, not the exception. The most spectacular example is Moore's law, but it is hardly alone. If you read The Innovator's Dilemma you will find plenty of other examples, ranging from the maximum range of a steam ship to the volume of dirt a backhoe can scoop per hour.

The interesting questions are how much computing power you need to perform equivalent tasks to a human brain, and whether current technology will reach that before it plateau's out.

DanielBMarkhamonOct 28, 2007

You should read stuff that tells you the most important stuff you don't know. So -- what do you know? Depending on that you should read different material.

I liked "A Good Hard Kick in the Ass" when I read it a few years ago. I've also read many of the books in that article. The business book business is strange: seems like you can read a lot without really learning much of anything.

The laws of marketing and laws of branding books are good, as is "The Innovator's Dilemma" (The sequel didn't seem as good to me for some reason).

Something I've tried that might be a good gift idea is business CDs -- you can load them up in your I-pod and take them on your morning run. Hard to do that with a book.

One thing to remember is the rule of 3: read at least three books attempting to solve the same problem that you are facing. Not only will it give you more perspective, different authors will connect to you in different ways, and sometimes it takes a while for the light to go on. But the main point I'm trying to make is to read based on what you need to know, instead of just randomly wandering around from one book to the next.

swampthingonJuly 24, 2011

Obviously this doesn't really have any bearing on points the author is making, but a small nit for posterity's sake - I think the point Clayton Christensen was making in The Innovator’s Dilemma was not that people should adopt inferior technologies to gain leverage later.

I think the point in that book was more that new technologies are often inferior in many ways to existing technologies when they first start out, and the way these new technologies survive/grow is by appealing to niches that value the existing ways in which the new technology is superior. Then, when the new technology matures a little more, the market to which it appeals grows a little larger, and this repeats.

slimslamonOct 14, 2015

Laughable? Check out the theory of disruptive innovation. From http://www.economist.com/blogs/economist-explains/2015/01/ec...:

"The theory of disruptive innovation was invented by Clayton Christensen, of Harvard Business School, in his book “The Innovator’s Dilemma”. Mr Christensen used the term to describe innovations that create new markets by discovering new categories of customers. They do this partly by harnessing new technologies but also by developing new business models and exploiting old technologies in new ways. He contrasted disruptive innovation with sustaining innovation, which simply improves existing products. Personal computers, for example, were disruptive innovations because they created a new mass market for computers; previously, expensive mainframe computers had been sold only to big companies and research universities."

mitchelldeacon9onMar 28, 2020

The following is a list of my favorite books on software engineering, cyber-security, and the history of IT business development.

Bowden, Mark (2011) Worm: The First Digital World War

Brooks, Frederick (1995) Mythical Man-Month, 2nd ed.

Christensen, Clayton (1997) Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

Hafner, Katie and Matthew Lyon (1996) Where Wizards Stay Up Late: Origins of the Internet

Hunt, Andrew and David Thomas (1999) Pragmatic Programmer

MacCormick, John (2012) Nine Algorithms that Changed the Future

McConnell, Steve (2004) Code Complete, 2nd ed.

Mitnick, Kevin and William Simon (2002) Art of Deception

Poulsen, Kevin (2011) Kingpin: How One Hacker Took Over the Billion-Dollar Cyber-Crime Underworld

Raymond, Eric (2003) Art of Unix Programming

Stone, Brad (2013) The Everything Store: Jeff Bezos and the Age of Amazon

Torvalds, Linus and David Diamond (2001) Just for Fun: Story of an Accidental Revolutionary

Wallace, James and Jim Erickson (1992) Hard Drive: Bill Gates and Making of the Microsoft Empire

Williams, Sam (2002) Free as in Freedom: Richard Stallman's Crusade for Free Software

Wilson, Mike (1996) The Difference between God and Larry Ellison: Inside Oracle Corp

ChiragonSep 1, 2009

. Zen and the Art of Motorcycle Maintenance
. Harvard Business Review - all the case studies
. The Innovator's Dilemma
. Ayn Rand++

IsaacLonJuly 2, 2012

By the way, I highly recommend Clayton Christensen's book The Innovator's Dilemma, which was mentioned in the article. If I ruled the world I'd decree that no-one was allowed to allowed to apply the word "disrupt" to technology or business without reading the guy who actually defined the term in the first place.

It seems lots of commentors here could use a primer: a disruptive innovation is usually cheap, considered as "worse" by existing customers, and enters the market at the low-end. But it serves a new market who have different needs to the existing customers. Over time the disruptive innovation gets better until eventually it replaces the original. Classic example: PCs and mainframes.

(Note: technically the disruptive innovation doesn't have to be cheaper. It's just better on metrics the new market cares about but the existing market doesn't. Often that's price, but not always.)


ambitiononMay 29, 2008

Cheaper, simpler than alternatives? Check.

Competing against non-consumption? Check.

Success encourages competitors to flee upmarket? Nope.

Reference: The Innovator's Dilemma by Clayton Christensen.

dropboxonMar 22, 2007

some that haven't been mentioned:

- the innovator's dilemma by clayton christensen

- blue ocean strategy (kim and mauborgne) -- these two books give you a little bit more of a framework to evaluate where your idea adds value and give you examples of how/why some successful companies have been successful

- high tech startup by nesheim -- a little dated, but lots of info

- negotiation/people books: getting to yes (fisher, ury) and getting past no (ury), influence by cialdini
(useful for more than just startups)

- maybe some management books: peopleware (demarco and lister), the art of project management (berkun), first, break all the rules (buckingham)

- founders at work (livingston) to get inspired

+1 to crossing the chasm, and the godin & gladwell books, art of the start

blogs: onstartups.com, fred wilson, brad feld, seth godin, etc., guy kawasaki


orrenktonOct 4, 2012

I just read 'The Innovator's Dilemma' by Clayton Christensen and it's awesome.

There's all this talk of "disrupting" everything in the tech world right now and a lot of it is really bullshit. This guy is the one who coined the term disruptive technology, and when you dig into it it's a really interesting concept that he actually backs up with great research on the disk drive industry.

The core of the idea is that 'disruptive' technologies are underdog technologies that actually have worse performance than the leading technologies of their time, but also some other attributes (smaller, lighter, etc) that make them valuable to customers in niche, less profitable markets the big guys aren't interested in. Since technology progresses much faster than our demand for it, those cheaper, crappier technologies improve over time and end up killing the big, expensive players who originally dominated the market.

Really great read

ucee054onSep 10, 2012

This is so silly. You don't have a startup idea until you have a product that you can sell to Grandma, that will work for her on a standalone basis. It can't require an Act of God to take it market. It has to be cheap enough that Grandma can buy it, and it has to be simple enough that it can be built by 3 guys in a shack in Palo Alto.

Often this means taking stuff that exists already and chopping off the most expensive features, even if they are the best features, to make it cheap enough for Grandma. Whole books have been published on this; lookup "The Innovator's Dilemma".

This is a completely different goal from the goals of research, which has to be new to be published. Taking an old idea, even which was impractical to build/deploy, and productizing it, is a very hard sell to the professors and very difficult to get published papers out of.

(Some academics just do not care about practicalities, no matter how hard one tries to persuade them.)

Both these situations are also completely different from the military, who care about maximum effectiveness even if it means throwing money at problems and even if it means redeploying the very oldest ideas. If a ceramic capacitor works, instead of a funky DSP algorithm, they'll use the ceramic capacitor. If it somehow proves necessary to defend against a nuclear attack, they'll switch the ceramic capacitor for a solid gold ingot in a heartbeat.

The incentives and goals are not aligned.

10renonApr 24, 2010

You're asking me to justify reading books that are recommended by someone I admire? Seems like such a trollish request! But I've liked some of your comments, so I'll try to answer straightforwardly.

I often read books for information, ideas of how to approach problems, and also for inspiration/motivation/reassurance/encouragement. That's what I hope to get.

Now, Drew is a very clear thinker, eg in his YC application., but obviously reading books that he's found valuable is not going to suddenly make me as clear as him - but it might help [I actually deleted that from my original comment because it seemed sort of irrelevant to the question].

Now, for these specific books, I've liked Steve Blank's blog, but if Drew has followed or used that book somewhat, that would be a significant recommendation. I have some doubts, because it seems to be a fact-driven approach, and sometimes the facts can't be ascertained - eg customers can't want something they can't imagine; you have to build it first and show it. (eg The Innovator's Dilemma). Drew mentions this in people weren't actively looking for what we were making and 'I didn't realize I needed this' (#27,28). I also think that being too focused on specific questions can close your mind off from serendipity. But that's just my opinion.

I have to say that what Drew has done is just so cool: a new technology-based product that is revolutionary. The slides also have some of that magical sheen of founder folklore. Although my last software business supports me financially, the technology wasn't revolutionary and it didn't start a revolution in usage. I hope my present one will be closer to it (that would be awesome!). I do have a bit of a "fan" attitude to Drew's success; perhaps that's why you're requesting justification.

8renonNov 9, 2010

The Innovator's Dilemma is full of inspirational stories of markets discovered retrospectively. An example off the top of my head is honda motorcycles being used as off-road recreational vehicles - this market was discovered by a sales rep observing customers doing it. This could only be apparent some time after the product was created, and sold.

Another is Xerography being rejected by IBM after careful (and accurate) market assessments. The market significance only appeared after Xerography was actually in use. (from The Billions that Nobody Wanted.)

So when pundits (not cdixon) tell you it's impossible to discover a market retrospectively, they are simply wrong. But they're right that it's risky; and that it's much safer to launch with buyers waiting (of course!). I think the key take-home is that: a business needs customers. (Sounds obvious? Yet it's a perennial downfall of engineer-lead startups.) Finding customers (aka marketing) is at least as much work as creating the product in the first place. To put it in perspective: if creating the product takes a few prototypes over a few months or years, it's probably reasonable to put comparable effort into marketing: a few markets and 4 P's over a few months or years. The danger is when you exhaust yourself engineering it, and collapse at the finish line - just when the second marathon starts, of marketing it. (of course it's even better to run both marathons simultaneously... to torture the metaphor).

skmurphyonJune 26, 2009

I would recommend these books for a good grounding in marketing and fostering innovation:

   The Innovator’s Dilemma by Clayton Christensen
Crossing the Chasm and Inside the Tornado by Geoffrey Moore
Innovation and Entrepreneurship by Peter Drucker
Marketing High Technology by William Davidow
Four Steps to the Epiphany by Steve Blank
Jumpstart Your Business Brain by Doug Hall
E-Myth Revisited by Michael Gerber
Blue Ocean Strategy by W. Chan Kim & R. Mauborgne
Influence The Psychology of Persuasion by Robert Cialdini
The 22 Immutable Laws of Marketing by Al Ries and Jack Trout
Secrets of Consulting by Gerald Weinberg

For an article that summarizes key concepts see http://skmurphy.com/wp-content/uploads/2007/04/Crucial%20Mar...

There is a companion slide deck here http://www.skmurphy.com/f/SDForum061211.pdf

gvbonNov 29, 2009

That is explained nicely in The Innovator's Dilemma http://en.wikipedia.org/wiki/Disruptive_technology. The personal computer wasn't powerful enough to compete against the computers made by large companies and didn't have a big enough (profitable enough) market to interest large companies. Big companies asked their existing customers what they wanted and they all said "bigger, faster computers." None of them wanted smaller, less capable computers.

Woz built the personal computer to scratch his own itch, but it created a new market, a market the big companies didn't have a clue existed (even Woz was surprised).

Big companies are entirely rational in this... they are maximizing their profits and listening to their customers. What they miss is new customers, niche markets that grow into major markets, resegmented markets...

agraddyonApr 26, 2011

I highly recommend the books "The Innovator's Dilemma" and "The Innovator's Solution" by Clayton Christensen. They basically provide answers to all of your questions. Christensen is the one who coined the term "disruption" as it applies to technology and innovation. The premise of the books are that large entrenched companies focus on larger profits and ignore off the shelf technologies that they already have in house because the potential profits seem too small. Other smaller companies start using off the shelf technologies to focus on niche customers and eventually overtake the larger companies. By the time the larger company realizes what's going on, they're playing catchup.

Nintendo used "The Innovator's Dilemma" and "Blue Ocean Strategy" (another book I highly recommend) as the basis for the development of the Wii.

nostrademonsonMay 17, 2013

Almost all of those are in industries that are actively being disrupted by new innovations: Office => Google Docs; SQL Server => MySQL, PostGresQL, NoSQL; Visual Studio => Eclipse, SharePoint => The Google suite of tools, etc.

If you read The Innovator's Dilemma, one of the hallmarks of disrupted businesses is that everything's fine until they go out of business. They keep moving up-market, into market segments with higher revenues and higher margins, until they're a mainstay of all giant enterprises. And then those enterprises realize that there's a competitor out there whose product wasn't suitable a couple years ago, but has just barely been able to do the job they need it to do, and switch en-masse. And then the big company, having run out of market segments to expand into, dies rapidly. Happened to IBM in the early 90s, Sun in the early 2000s...and Microsoft is next.

jfageronJuly 30, 2010

It sounds like you haven't actually read or understood The Innovator's Dilemma. TID isn't about companies growing too large and making obviously idiotic mistakes - it's hardly worth a book to point out that that might not be the best way to do things.

The point of TID is that in certain situations a company can make all the right decisions and still end up losing in the long run to worse products.

An industry that's being disrupted is one with higher-end customers served by successful businesses with expensive, high-margin, high-quality products, and less demanding customers being served by businesses with cheaper, lower-margin, inferior products, where the product quality of both segments grows at a faster rate than what the market demands. When the worse product becomes good enough for a large enough segment of the market, the industry swings - disruption.

The "Innovator's Dilemma" is that at any given time prior to the disruption, the right decision for the successful high-end company appears to be to not enter the lower end of the market, because the same investment applied to the current business will yield continued higher return.

Nokia doesn't have an innovator's dilemma here, they have a shitty product that nobody wants.

nradovonJune 20, 2019

The classic business management book The Innovator's Dilemma specifically recommends moving groups working on potentially disruptive new products into separate facilities. That helps them avoid distractions and makes it harder for "corporate antibodies" to kill the new initiative. Most people think that the IBM PC project succeeded in creating a microcomputer that disrupted the mainframe and minicomputer markets at least partly because they had a separate office in Boca Raton instead of at HQ in Armonk.


Of course having a separate facility doesn't guarantee success, and can certainly cause other problems if poorly managed.

laurentlonMar 23, 2019

I find that re-reading the books help. For instance, it wasn’t until my 3rd read of The Goal that I felt as if I completely understood the underlying themes.

As others mentioned, being able to relate to the content of the book helps immensely. For instance when reading The Innovator’s Dilemma I kept finding parallels to my previous industry and company. This struck me so much that I can list most of the content of the book simply by thinking back to those insights.

As a last note, non-fiction books are seldom gripping. Reading a few pages before going to sleep doesn’t cut it for me, words zip past my eyeballs without hitting the brain. I need to actively focus on the content, much more so than when reading fiction. I try to force myself to pause and actively think about the content every few paragraphs: does it make sense? Can I follow the logic of the argument? Does it resonate with my experience? It’s the only way for me to actually get anything lasting out of the book.

10renonMay 5, 2009

Can you articulate why this is "completely disingenuous", why it is "link-bait" and why it is a "bit of shallow drivel" in addition to describing it as such?

The title is absolute, but the text qualifies it: "1) conventional approaches and planning don’t work when you’re trying to get into new spaces"

They also say Stop presuming you can be right in a world of massive uncertainty. I doubt you disagree with that.

I can see how you could interpret the title as implying that "planning is a waste of time"; but that's not what the text says. 37Signals have said they deliberately choose provocative positions for their titles. I can understand you not liking it, but why judge the whole by the title? Personally, I automatically qualify it with "plans are useless but planning is indispensable" (because it makes you look at the issues.)

Incidentally, the link is to a book by MacMillan and McGrath that's being launched this year (not an article): Discovery-Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunity. Maybe you're thinking of their 1995 paper of similar name "discovery driven planning". When I read that paper a few years ago (via "The Innovator's Dilemma") I found the details in the paper not very helpful; but the basic idea of an experimental approach was brilliant: (1) work out what you don't know, and (2) make a plan for finding out (instead of a plan for achieving something, that presumes you already know.)

Such a plan is "a plan to improve". And this gives a different interpretation to the title (quoted from Macmillan and McGrath BTW): "the only plan is to learn as you go."

Anyway, your flag has succeeded, so someone agrees with you. I'm disappointed, as it's throwing the text out with the title.

andyidsingaonJan 20, 2019

> cliche-ridden

hmmm. have you read his book "The Innovator’s Dilemma" ? I was shocked that it's already 25 years old. I think it maybe be the seminal book on disruptive innovation. Low-end disruption, new-market disruption, "job to be done" AFAIK - those are all Christensen.

If there's cliches there - I suspect they came about in the shadow of his body of work over the years.

rogerbinnsonJuly 3, 2012

> They're surfing a wave of ... cash

That doesn't help. It is lagging indicator reflecting what you did in the past, not what you do today or will do tomorrow.

For example read the Innovator's Dilemma where the pattern is repeated. Companies would listen closely to their customers, getting improving cash, rinse and repeat. Everything looks great right up until it falls off a cliff because attention moves to something else that looked irrelevant, but was actually disruptive.

A good example is RIM. They kept sailing on their prior work and even a year ago operating margins were 20%. Now they are minus 25%. Historically no mobile company has ever got out the place RIM is now in. But their wave of cash looked good and was enough to fool them into being complacent.


pchristensenonSep 13, 2010

That's why I used gcc as an example instead of the whole "development tools" category.

For some subset of C compiler users, gcc is an acceptable substitute, and so there's no reason to pay anyone, anywhere, $.01 for a C compiler. Their business is gone forever and it is no longer worth writing a commercial C compiler in order to get these people's money. Your market is now people with needs that gcc can't fulfill, which is smaller but quite possibly still lucrative.

Ditto for Gimp/Photoshop. I crop and scale pictures, so GIMP or Paint.NET work more than fine. Photoshop isn't worth it for me to buy. On the other hand, my wife and I have both bought laptops in the last year and I spent 3x what she did. Her cheap Dell was not an acceptable substitute, so I paid more. Even if the Dell was free, I still would have paid for my bigger faster laptop with 18.4" screen.

If in 10 years, GIMP does everything that a graphic designer or artist could want, it will no longer matter how advanced Photoshop is. Just ask film camera makers.

The book The Innovator's Dilemma (and its underrated sequel, The Innovator's Solution) talk about this extensively.

kentlyonsonMar 11, 2013

I like Clay Christensen's model for innovation [1]. He has a top level categorization of sustaining innovation and disruptive innovation.

Sustaining innovations are about making products in existing markets better and are further broken down into continuous innovation and discontinuous or radical innovations. The metrics here are about if the new innovation is improving performance within an existing market and by existing value metrics, and by how much. Continuous innovations are small improvements, radical innovations are large improvements.

Disruptive innovations are also broken down into two categories. There is the low end disruption whereby a product is competing in the same space as existing ones, but comes in from below. These are often cheaper and worse to start with, but then move up market as technology improves. There are many examples here (eg Arm coming in under x86). The other disruptive innovation is the new market innovation. In Christensen's terminology, these products compete against non-competition. There is a need, but no products fullfils that need until the disruption comes along. These products are tricky for several reasons. For one, there is no existing market and therefore traditional market research doesn't work. Instead, the execution plan needs to be focused on learning what the market is and what the customer needs are.

1] The series of books starting with the Innovator's Dilemma are a good read on innovation. The wikipedia article is a pretty good overview as well: http://en.wikipedia.org/wiki/Disruptive_innovation

btillyonMar 29, 2010

I don't know what you mean by "related to software". I'm going to take a narrow definition that you mean related to the process of writing, designing, tracking, etc. So something like Information Rules on the economic theory of pricing software products is OK. Or a classic on managing software developers like Peopleware is OK.

Some other general business books I like include The Innovator's Dilemma, The Innovator's Solution and First, Break all the Rules. A non-software specific design book I highly recommend is The Design of Everyday Things. Even though it is geared towards manufacturing related industries, I'm also very fond of Winning at New Products.

If you haven't already you should learn more about negotiation. Even if your only negotiation is negotiating a new job every several years, reading a book on it is very worthwhile. If you can negotiate yourself an extra $1000 bonus, once, the book has paid for itself with interest. The two books I recommend there are Start with No and Bargaining for Advantage. I'd recommend the first if you need a general purpose bargaining strategy and aren't experienced. I'd recommend the second if you're an experienced bargainer who is looking to improve.

A few years back I read The Prince by Machiavelli. I liked it a lot more than I thought I would.

For general interest for anyone who likes math I strongly recommend The Mathematical Experience by Davis and Hersch. My summary of it is that Godel, Escher, Bach is the book that non-mathematicians have on their coffee table book, while The Mathematical Experience is the one that mathematicians have.

Lots of people gave sci-fi recommends for you. To those I'll add Peter Hamilton's Reality Dysfunction series and Bujold's Miles Vorkosigan series. Furthermore if you haven't seen it yet, go to an IMAX and see Hubble 3D. If you ever dreamed of space, you need to see it. Really.

For random science fact, I like Jared Diamond. I like virtually everything by Stephen J. Gould. I recently re-read Shadows of Forgotten Ancestors and still love that.

I could list more, but that's enough for the moment.

10renonJune 3, 2009

Yes and yes. It's not to be taken as a general bible, but contains some insightful truths drawn from hugely successful startups. Very well written (guy has a PhD in literature.)

See also "The Innovator's Dilemma" for an insightful academic treatment (compellingly researched, but also less practical) of the same idea of disruption, though mainly for large corporations.

cpetersoonJan 20, 2011

Is Linux a repeatable phenomenon? In 2011, could a college student's hobby snowball into such a dominant technology? If someone had asked me that question about Linux 0.01 in 1991, I would have compared it to commercial Unix and said no (and been wrong).

Perhaps today there is an opportunity for a fresh start with low-end mobile web technology. The Innovator's Dilemma book still gives hope for "worse is better" underdogs versus companies paralyzed with "cash cow disease".

EmpactonApr 26, 2011

It's a classic problem of disruptive technologies covered in "The Innovator's Dilemma." The author's advice is for companies to create independent subsidiaries to take on the new technology, so that "competing with themselves" is internally consistent within the subsidiary, even if it's inconsistent across the company. Certainly a good move when the alternative is obsolescence.

mgavonAug 14, 2014


"In his original research, Christensen established the cutoff for measuring a company’s success or failure as 1989 and explained that “ ‘successful firms’ were arbitrarily defined as those which achieved more than fifty million dollars in revenues in constant 1987 dollars in any single year between 1977 and 1989—even if they subsequently withdrew from the market.” Much of the theory of disruptive innovation rests on this arbitrary definition of success. In fact, Seagate Technology was not felled by disruption. Between 1989 and 1990, its sales doubled, reaching $2.4 billion, “more than all of its U.S. competitors combined,” according to an industry report. In 1997, the year Christensen published “The Innovator’s Dilemma,”

Seagate was the largest company in the disk-drive industry, reporting revenues of nine billion dollars. Last year, Seagate shipped its two-billionth disk drive. Most of the entrant firms celebrated by Christensen as triumphant disrupters, on the other hand, no longer exist, their success having been in some cases brief and in others illusory. (The fleeting nature of their success is, of course, perfectly consistent with his model.)"

btillyonOct 29, 2009

Wrong context. The amount of money raised is a function of how much money is chasing that particular kind of deal. A better context is the current cost of doing business. The inflation adjusted costs of computers, licensing, and marketing are all down. Therefore startups need less funding, not more.

People forget that there is a cost to receiving too much funding, which is that you now need a success that justifies the money spent. Which means that if you spot a viable opportunity which is smaller than that target, you can't explore it. Even though in other circumstances it could have been perfectly appropriate for that company.

For an interesting book that covers the dynamics of how over-funding kills success, I highly recommend The Innovator's Solution. It is a follow-up to The Innovator's Dilemma, but the discussion of how money distorts organizational dynamics is only in the sequel.

wahernonSep 9, 2016

Not only a drag, or not even a drag.

It's been a long while since I read The Innovator's Dilemma, but the ground-breaking thesis in that book as I remember is that established companies are disrupted because it's 100% rational for them to continuing pursuing and maximizing profit in their established market, even while obsolescence is knocking on their door.

The dilemma is that they have to choose between maximizing profits in their current market and returning unused capital to stockholders, or burning money on speculative investments in a bid to remain relevant in the future.

Were labor and capital markets frictionless, it wouldn't even be a dilemma. The answer would be obvious--choose the former. Any investments you divert from maximizing your current advantage is always a net loss. Excess capital is best given back to shareholders because "the market" will do better at choosing the next disruptive technology than any single person or business would be. That you're doomed to obsolescence and will eventually have to wrap up the business doesn't matter; what matters is maximizing profits.

But because labor and capital markets aren't frictionless, it's not optimal to let an existing business entity disappear. Think fixed costs like HR; or brain trusts. Finding the balance between maximizing your current market position and speculating on disruptive technologies is therefore arguably something worth pursuing.

But as labor and capital markets become more free and liquid, there's less of a dilemma.

Anyhow, long story short, companies aren't disrupted because they're dinosaurs and antiquated. They're slow to respond because it's often perfectly rational (i.e. more profitable) for them to ignore new technologies and to continue pressing their advantage until the very end. And that incentive aligns well with maximizing global profits and capital investments. The intuitive sense that companies are doing something wrong by not preparing for disruption is irrational as a general matter. You prepare for disruption by making as much money as you can and jumping ship at the very last moment; doing anything else is leaving money on the table.

dyonAug 17, 2012

After reading the Innovator's Dilemma, you start seeing this effect everywhere and it applies equally in people's careers. I think it's probably the same principle as the law of diminishing return - you're getting less and less out of your current path but it's still more than some other perceived endeavor.

Perhaps there is some disruptive thing Twitter could do that will eventually disrupt their current advertising model and be a true billion dollar business. It's possible they don't see it (or less likely, there is NO path for them to get where they need to be) and so they're letting it be known that they're planning on extracting increasing rents from their current income streams.

mikeleeorgonJune 18, 2010

One of the strengths of Posterous is that it offers a good solution to both approaches. If you like the ease-of-publishing via email, it can do it. Web? Got that too. How about via an iPhone or Android? Check.

In Clayton Christensen's book The Innovator's Dilemma, he discusses two types of disruptive innovations:

1) Low-end disruptions

These serve less demanding customers with low-priced, relatively straightforward offerings using low-cost business models. Look for markets with over-served customers and offer a simpler product or service.

2) New-market disruptions

These serve new customers by making it easier for them to do something that previously required being or hiring specialists. Look for unfulfilled needs and create new products or services for them.

Posterous is a great example of a low-end disruption. They're offering a product so damn simple that few realized it would have such an impact (like Dustin Curtis). And now they've got features that early adopters and perhaps some early majority want as well (the rich-text editor). Pretty shrewd of them.

btillyonDec 30, 2010

It is worth noting that The Innovator's Dilemma, published about a decade ago, cited a study that the author had been involved in for the auto industry. In that study, based on projected improvements in battery technology, the date that electric was expected to be competitive with gasoline engines was 2020.

So yes, battery prices have been following a Moore's law trajectory (mind you not as quickly as Moore's law goes) for a very long time now.

Incidentally The Innovator's Dilemma gives a large number of other examples of technologies that have shown exponential improvement for long periods of time. From my memory some of the examples included how far a steamship could go before refueling, how big a scoop a hydraulic backhoe could take, the storage density of hard drives, and the quality of steel that mini-mills can produce. Oh right, and battery capacity+life.

btillyonNov 7, 2011

Moore's Law is actually quite ubiquitous. In The Innovator's Dilemma a large number of examples are given of similar trends that lasted for decades, including such things as the volume that a hydraulic scoop could scoop, to the distance that a steam ship could travel without refueling, to the capacity of batteries.

It is therefore no surprise that solar power would show a similar trend.

mbellonAug 26, 2012

At the time the iphone was released I had one of the early HTC touch screen + slide out keyboard phones (Tytn or something like that). I recall laughing about the first iphones. Terrible e-mail support, no MMS, my year old phone had twice the capabilities. I couldn't understand why anyone would want such an expensive phone that was so functionally handicapped. What I didn't understand at the time was that the phone was never targeted at me, it was targeted at the general consumers who didn't care that it couldn't handle 5 e-mail accounts, VPN, etc, etc.

The iphone wasn't so much a matter of technological inovation as it was one of market building. Apple lept ahead of the incumbents by realizing that a 'smartphone' could be a device every consumer wanted, rather than something that 'business folks' used. It wasn't so much that the incumbents couldn't have thought up something very similar, it was that they were caught up dealing with their current target markets: business people whom needed a blackberry or Wmobile phone with exchange support, whom didn't want change, they wanted a device that did its job and didn't require them to think about it. Its very difficult for a company to have the foresight to produce a product that they know their current customers will hate.

This is classic incumbents vs newcomers leap frogging, if you haven't read "The Innovator's Dilemma" its worth checking out as it speaks directly to this pattern of development.

CookWithMeonNov 13, 2012

I guess no one at BMW, Mercedes or Audi has read the Innovator's dilemma.

That said, the German government tried to create many incentives for creating "greener" cars. However, the manufacturers IMO seemed to pour money into lobbying against it, rather then putting their engineers to work.

Depending on how much Tesla eats into their market share, it could be a tough road ahead for the German car industry (and, to some extent, for the whole German economy). Especially considering how long it takes them to come up with an answer to the Prius...

davidwonJuly 7, 2011

Business books can be kind fun to read, but I have the same doubt. I think there are a couple metrics one can use to judge a bit more concretely:

* How compressible is it? In other words, how succinctly can the main ideas be summed up? Even some quite interesting books such as The Innovator's Dilemma, are fairly easy to sum up in a few pages. This is because there is one core idea and a lot of stories, statistics, and other extra supporting material.

* How much actionable advice is there? For instance, one thing I liked a lot about Rob Walling's "Start Small, Stay Small" is that he comes out and suggests some price numbers for online products, rather than a wishy-washy "figure out what your market will pay" or something equally non-committal. As another example, "do less" is sort of a handwavy guideline that is harder to do anything with, although we do live by it at http://73primenumbers.com/ .

SatvikBerionDec 22, 2012

Many seemingly easy to clone businesses get dominated by startups. Facebook copied SnapChat, but had to buy Instagram. Why?

The Innovator's Dilemma[1] explores this question in detail. The gist is that the processes at big companies are very well suited to certain kinds of innovations, while they preclude other kinds (known as "disruptive innovations"). One example (not the only one) has to do with margins. Big companies tend to assume that their cost structures are more or less fixed, and will tend to pass over products that seem to be lower margin than their current business. For example, home computers seemed to be much less profitable than mainframes, so a lot of manufacturers missed the boat on the personal computer revolution.

It's worth reading the book and learning which ideas are likely to be copied by big companies, vs. which ideas big companies will fail at executing.

[1]: http://www.amazon.com/The-Innovators-Dilemma-Revolutionary-B...

rfreytagonNov 4, 2009

Perhaps Joel has discovered why VCs are so dismissive of 'lifestyle' companies.

If 37Signals starts to see market erosion then we'll know the VCs are correct and its grow fast or wither till irrelevance.

Personally, I hope the VCs are wrong and that in fact what Joel has to do is undercut his competition in a way they cannot answer without destroying their business model. This is what Clayton Christenson talks about in "The Innovator's Dilemma."

6renonSep 11, 2011

It means target people with needs that aren't being met. Those people are not consuming (i.e. buying and using) a product or service to address their problem.

It's clearest to see when a product exists to solve a problem, but it's too expensive for some people (or some situation). In the article, the problem of reporting on local sports/financials has a solution (reporters), but the value of that news isn't worth their time: their time is too expensive. So the newspaper doesn't "consume" a solution to the problem of reporting that particular news.

By targeting this non-consumption, the startup doesn't compete against reporters (yet...), so it provokes no desperate fight for survival.

It's an term from Clayton Christensen, who wrote The Innovator's Dilemma, though he doesn't use it til "The Innovator's Solution", and expands on it in "Seeing What's Next".

mattmaroononJan 31, 2009

"Clayton Christensen, author of The Innovator’s Dilemma concluded six years ago that Linux and open source seemed to be executing a classic low-end disruption on Windows and closed-source technology."

Yeah, and he turned out to be right. Now, only 6 years later, nobody uses Windows and everyone uses Linux.

I love how he uses a prophecy that has totally failed to occur at all as the starting point for rehashing the same prophecy.

guiseppecalzoneonNov 12, 2010

If you ever read the Innovator's Dilemma, this article makes a lot of sense. For a project to make financial sense for a big company, or appeal to its current user base, it has to get big fast, be scalable off the batt and be compatible with their current software. So, it's iteration speed goes way down. Think about Buzz. They couldn't launch to 1,000 users and iterate quickly as they grew. They had to release it to everyone. Imagine the pre-launch engineering required to make an app ready for tens of millions of users?

mindcrimeonJuly 9, 2013

I'm a fan of The Innovator's Dilemma but I don't really see it as an essential book for startup founders. Maybe for intrapreneurs...

If I were putting together a list of essential books for startup founders, I'd go with:

1. The Four Steps To The Epiphany

2. The Startup Owner's Manual

3. Business Model Generation

4. The Art Of The Start

5. Blue Ocean Strategy

6. Crossing The Chasm

And yes, I do realize that (1) and (2) are largely the same book. But there is enough difference that I'd actually recommend people read both, especially if they're doing enterprise software startups. For consumer facing webapps or something of that nature, I might drop TFSTTE in favor of just TSOM.

10renonJuly 5, 2010

oblig. Einstein repeatedly argued that there must be simplified explanations of nature, because God is not capricious or arbitrary. No such faith comforts the software engineer. Fred Brooks, p. 184 The Mythical Man-Month 2nd ed.

It's interesting to me that several people I greatly admire in comp sci/technology are religious: Fred Brooks, Knuth, Larry Wall and Clayton Christensen (The Innovator's Dilemma).

To me, one aspect of the idea of God is as a workable label for all the things I don't know (especially those questions I know not of; the doors I have not suspected exist; the things my philosophy does not dream of; the unknown unknowns). Also helps me to seek questions (define problems) even if I can't imagine knowing the answer (finding solutions). It helps me to just let it be.

Another aspect is political: human beings, like other apes, tend to organize around a dominant male (and even chickens have a pecking order). When groups grew in size due to agriculture and civilization, this scaled to super-dominant males - gods embodied in persons (I'm thinking ancient Egypt). This was dangerous. The next innovation was to transfer that "super-dominance" to a person who doesn't actually exist. This is safer, and of course this imaginary personage can embody all those ideas an actual human can only move towards but never attain. Although wars were still fought in the name of a God, there was a separation. That's a theory of mine anyway. Feel free to poke holes, build it up, tear it down (esp with evidence).

BarkMoreonMay 6, 2011

Google Apps is a disruptive technology in the sense described in the book "The Innovator's Dilemma." Microsoft might not effectively complete with the disruption because Microsoft does not recognize the disruption, Microsoft continues to focus on maximizing profits in their current ecosystem or other reasons discussed in the book. Google Apps is capturing early adopters like you and it continues to improve. Microsoft might not win.

cranderonDec 18, 2010

First, to argue that web application need to be "on par" with Desktop applications to replace them is totally false. See The Innovator's Dilemma. In a nutshell existing technologies become too feature rich and complex and exceed market demand. This creates a disruptive opportunity for simpler technologies to replace them in the mainstream by growing upmarket.

When disruptive technologies achieve the minimum required feature set to meet market demand, market competition shifts to other criteria. One case study in the book describes how cable actuated earth movers companies felt save as hydraulic actuated earth movers could never move as much earth and initially had zero commercial applications. They still can't. Yet hydraulic actuated earth movers have almost completely replaced cable driven ones, except at the market edges that require extreme performance, by establishing a foot hold beneath the existing market (ditch diggers) and innovating upwards.

Web applications are simple compared to desktop applications. They are constrained by web standards and run in sandboxed environments. The question is not whether web applications can exceed Desktop applications but whether they can meet market demand.

Software + Services (a term Microsoft created when faced with the Internet Services Disruption) is a hybrid, transitional strategy for desktop application companies that makes sense in partially connected environments. This is the model of Dropbox and every other data replication provider. Over time, perhaps with ubiquitous 4G networks, we'll see how this fares against low maintenance operating systems and zero maintenance web applications.

btillyonMay 12, 2013

Have you read The Innovator's Dilemma and its followup The Innovator's Solution?

I'm pretty sure that Kodak was one of the cases discussed. If not, it deserved to be because it was a classic example of the perverse incentives that destroy incumbents.

Kodak realized the future. Kodak invented it. But their film business dominated from a revenue perspective. At every point where they had to make a resource allocation decision, the fact that film was the cash cow gave people from that division weight, and nobody in other departments really wanted to kill that sacred cow.

When Canon decided to not depend on Kodak, they were not just doing that because they wanted to be independent, but also because they recognized that Kodak's priorities didn't match theirs. I wouldn't be surprised if the design advantages that Canon had were not there in part because they didn't have any internal politics around protecting a legacy cash cow.

drusenkoonJan 11, 2014

This is essentially the point made in the book The Innovator's Dilemma about disrupting existing markets:

"Disruptive technologies or innovations are innovations that upset the existing “order of things” in a particular industry. The usual process is a lower-end innovation that appeals to customers who are not served by the current market. With time, because the capacity/performance of the innovation exceeds the market’s needs, the innovation comes to displace the market incumbents." [0]

[0] http://www.squeezedbooks.com/articles/the-innovators-dilemma...

krschultzonFeb 22, 2012

I feel like you can answer nearly every post like the OP's with "Go read The Innovator's Dilemma and then come back and talk about what metrics this disruptive company is competiting on rather than talking about the old metrics of the industry". Every one of them is making the argument that hard drive makers made each time a newer size came out, except with miles of range instead of Gigabytes.

ssebroonJune 23, 2012

If this is true, then he (Craig Newmark) really needs to read the innovator's dilemma (http://www.amazon.com/The-Innovators-Dilemma-Revolutionary-B...). TLDR: If you allow yourself to become a prisoner to your success, you're actually making your continued success unlikely. You can solve the dilemma by spinning out a smaller, irreverant version of yourself & giving them what they need to destroy the old company.

In craigslist's case, he could include a link on the old site that allows users to upgrade to a more modern version, and have the modern site basically consume an api/scrape the old CL till it gained momentum.

nostrademonsonMar 19, 2007

This ties in with Clayton Christensen's work in The Innovator's Dilemma and The Innovator's Solution.

Christensen's thesis is basically that technological change is continuously creating Local Mins like point C, in the form of disruptive innovations. These are technological breakthroughs that target a smaller, less profitable market. Since they're less profitable, they're unattractive to established players, who're stuck at point B. However, their performance can quickly improve up to point D.

As a startup, you want to enter at point C and target point D instead of going for point B. If you head for point B, you'll face the incumbents, all of whom have more resource than you. If you head for point D, the incumbents have to go down through point C in order to catch you. They won't want to do so, because it's painful for them.

jeyonDec 13, 2010

“It’s a little bit like, is the Albanian army going to take over the world?” said Jeffrey L. Bewkes, the chief executive of Time Warner, in an interview last week. “I don’t think so.”

Someone please throw a dozen copies of The Innovator's Dilemma[1] at this guy. Maybe the TW board will wake up and fire him before he runs their company into the ground.

1. http://en.wikipedia.org/wiki/Disruptive_technology

davidwonJune 18, 2007

This is a page out of The Innovator's Dilemma, in some ways, if you look at a "rift" as a disruptive innovation. Of course, it's not quite the same thing, but the description of how companies react is quite similar.




EmpactonMay 12, 2019

I encourage anyone with this perspective to read Clayton Christensen’s “The Innovator’s Dilemma”.

The book examines cases where the world is moved by disruptive technology - one property is that they are at first derided and dismissed as too limited / impractical / toys, before eclipsing the capabilities of the legacy technology, e.g. the very limited initial hydraulic construction equipment which came to lose its limitations and replace cable-driven alternatives in the 20th century.

enraged_camelonMar 6, 2013

>> The reason for that is well explained in The Innovator's Dilemma.

Side note/question: I know there's three books in that "series": Innovator's Dilemma, Innovator's Solution, and Seeing What's Next. For someone who has not read any of them, what's the correct order? Are all three required, or is there overlap between the contents?

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