3 ms·
Andy Grove understood this idea very well, I think before Clayton even wrote this book, but they later became very good friends. Andy Grove once that that "if w
by nextparadigms 15y ago
Andy Grove understood this idea very well, I think before Clayton even wrote this book, but they later became very good friends. Andy Grove once that that "if we lose the low-end today, we lose the high-end tomorrow."
That's actually how disruptive innovation works. The disruptor comes from the low-end and it slowly moves into higher levels, up market. That's why ARM is so dangerous to Intel for example, but Paul Otellini doesn't seem to understand this theory as well as Andy Grove.
http://www.youtube.com/watch?v=DaKgMcFP4Mo&feature=related http://www.youtube.com/watch?v=DaKgMcFP4Mo&feature=relat...
- wisty 15y agoGrove wrote a book on this called "Only the Paranoid Survive". Terrible title. Good book. He points out that if you own the low end, you gain huge economies of scale. You pay for your foundries and R&D with cheap low-end parts, but only barely. Nobody can compete, because they don't want your rubbish margins. But then you can put huge margins on your high-end products by using cost-cutting technology and your huge efficient factories to lower your costs. It doesn't work in all industries. But it's great in technology, as efficiences of scale do exist (what's the maringal cost of 1 more chip, or one more CD-ROM?)