4 ms·

I am not fully versed in the notion of innovative disruption, but it seems pretty obvious that a Clay Christensen-esque Innovator's Dilemma disruption is what's

by phuff 15y ago

I am not fully versed in the notion of innovative disruption, but it seems pretty obvious that a Clay Christensen-esque Innovator's Dilemma disruption is what's going on here: somebody had a decent product, is first to market, but doesn't have a clear enough vision to see how to stay on top and stay innovative and gets blindsided by unexpected (read Apple + Android) competitors. I wonder how closely the non-cliff notes version of RIM's fall matches the innovator's dilemma model.

cpeterso 15y ago
I think RIM and Nokia both had "Cash Cow Disease". The Blackberry and Symbian had been successes for so long that short-term profits/losses and internal politics prevent the companies from investing in new (and seemingly "inferior") technologies that would cannabilize their own successful products. For example, Nokia had touchscreen phones that didn't sell well, so they thought the touchscreen iPhone was a "toy".
- mbesto 15y ago
  RIM in particular continues to have strong financial numbers. But the outlook is bad as the trends are showing decline rather than growth. The innovator's dilemma really takes a toll on company's who main source of revenue is being disrupted and at the same time have to report to shareholders.
IsaacL 15y ago
The term is 'disruptive innovation'. It's an often misunderstood concept - the key point is that not all innovation is disruptive. The defining feature of disruptive innovations is that they are initially worse than the technology they displace, but as they are significantly cheaper they allow the tech to reach new markets. Since the iPhone was a high-end product, it can't be called disruptive.
- MikeCapone 15y ago
  "Since the iPhone was a high-end product, it can't be called disruptive." Do you have a suggestion of what it should be called, then? Sounds disruptive to me.
  - dantheman 15y ago
    revolutionary or evolutionary - depending on your perspective; though I'd say the android is disruptive to the GPS market http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology
- dasil003 15y ago
  Why does something have to be cheaper to be disruptive? What if it's the same cost but better? Were automobiles cheaper than horses and buggies?
  - IsaacL 15y ago
    Sorry for the late reply. Clayton Christensen, the person who invented the term, cited the automobile as an example of an innovation that was radical but not disruptive. The textbook disruptive innovation is the PC, since in terms of value for money it was much worse than the mainframes it replaced, but opened up computing to new markets. Christensen's basic thesis is that disruption is primarily a marketing phenomenon, not a technical one. If an innovation is clearly better to what came before, the incumbent companies will start to use it since it's what their customers demand. However, if an innovation is worse-but-cheaper, the existing companies won't be interested, but new startups will spring up to sell the disruptive innovation to previously unserved markets. Over time the new technology gets better, replaces the old technology, and the incumbent firms that didn't switch get disrupted. tl;dr: everyone thinks they know what "disruptive innovation" means but they don't. Read this: http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology or C. Christensen's book.
    - thinkdisruptive 15y ago
      @IssaacL. You are right that most people don't know what a disruptive innovation is. That derives from too many believing that it means "innovation" of any kind, or "better" than anything else in the market because they equate the endgame (the disruptor usually ends up with dominant market share and the best product, but only after many product cycles) with what creates disruption, and they aren't the same thing. However, your brief definition skims over way too much of the theory. Disruptions don't always have to be cheaper or "worse" in the qualitative way that is generally understood. To disrupt, an innovation simply needs to be substantially better on a dimension that the new market cares about, while being referentially worse (compared with incumbents) on a dimension that the existing market and incumbent producers care about strongly (and therefore aren't incented to compete against the disruptor until it's too late). This is a completely consistent with Christensen, and also with market reality. However, Christensen was wrong about the car because he didn't follow his own logic. Do you see buggy and horse whip manufacturers anymore? Do you see people raising horses for transportation? How about trains as the primary (dominant) form of mechanical overland transport of goods and people? Cars were initially "worse" in that they spewed lots of dirty soot into the air, required fueling stations that didn't exist, could only drive on paved roads (which also didn't exist), and broke down constantly (which meant everyone that drove one had to be a mechanic). But, motorized vehicles were also superior in that they could go faster for very long periods of time without needing rest, they were cheaper per mile to operate than a team of horses, and they were fun to drive, offering a sense of freedom. Cars disrupted lots of things -- you just have to identify the right market and the cause of its disruption. The fact that the very first cars were really more hobbyist or wealthy-man's toys is irrelevant -- so were PCs until they became economical and found their niche through VisiCalc spreadsheets. The fact that Christensen wrote the seminal books and made the observations from which the theories were derived doesn't mean either that he is always right, nor that he always applies the theories correctly to predict disruption. He famously declared both the iPod and the iPhone to be not disruptive at their introduction, yet they are archetypal examples of disruption. In 1949, Thomas Watson Sr, IBM's then president famously declared that he couldn't envision a need for more than 12 computers to satisfy the needs of the entire world. Sometimes we're too close to things to see the forest for the trees. Also, the Wikipedia article has been overwrought by many techies who think it's about technology, and as such isn't an entirely accurate or good summary of disruptive innovation. In that respect, you are correct -- technology is neither necessary nor sufficient for disruption to occur, but correct market segmentation and positioning strategy, having the minimum viable feature set to satisfy an unmet or underserved need, targeting a market slice that is willing to pay to have its problem solved at a price that you can afford to make it are all critical properties of disruptive innovations, and they are entirely about marketing and business model, not about technology. Still, we all know that the majority of disruptions are enabled by new technology because it can create opportunities to solve unmet needs at a price point acceptable to an unserved market. I don't know if that better answers the original question, but it is sometimes, although not frequently the case that disruptive innovations are more expensive than what they replace. The iPhone is a great example of this, as is the original IBM PC which was far more expensive than the PCs that came out of the late 70s, but had the big advantage of IBM's imprimatur endorsing it plus an open architecture, which attracted apps and an ecosystem of vendors springing up to support it. There is an ebook discussing the widespread misunderstanding of disruptive innovation and why it matters available at http://tiny.cc/disruptve_confusion_ebook http://tiny.cc/disruptve_confusion_ebook
thinkdisruptive 15y ago
Yes, this is absolutely an example of the disruptor being disrupted. RIM has killed themselves by trying to out-increment features on a handheld email machine all the while ignoring, or failing to perceive as relevant how both iPhone and Android were irreversibly changing the basis of competition. RIM's only survival strategy is to stop playing catchup with me-too products that the market has already passed, and to offer something different leveraging their proprietary platform if possible, but satisfying and targeting a completely different market need, such as doing mobile social more elegantly or something like that. I'm in process of writing a detailed analysis of RIM's missteps that have enabled disruption, and why their current strategy is pointing them to oblivion. This article is killer for RIM -- only 26% of Blackberry owners plan to get another! http://tiny.cc/iphone5_kills_the_pack http://tiny.cc/iphone5_kills_the_pack

by phuff 15y ago

cpeterso 15y ago

I think RIM and Nokia both had "Cash Cow Disease". The Blackberry and Symbian had been successes for so long that short-term profits/losses and internal politics prevent the companies from investing in new (and seemingly "inferior") technologies that would cannabilize their own successful products. For example, Nokia had touchscreen phones that didn't sell well, so they thought the touchscreen iPhone was a "toy".

mbesto 15y ago
RIM in particular continues to have strong financial numbers. But the outlook is bad as the trends are showing decline rather than growth. The innovator's dilemma really takes a toll on company's who main source of revenue is being disrupted and at the same time have to report to shareholders.

IsaacL 15y ago

The term is 'disruptive innovation'. It's an often misunderstood concept - the key point is that not all innovation is disruptive. The defining feature of disruptive innovations is that they are initially worse than the technology they displace, but as they are significantly cheaper they allow the tech to reach new markets. Since the iPhone was a high-end product, it can't be called disruptive.

MikeCapone 15y ago
"Since the iPhone was a high-end product, it can't be called disruptive." Do you have a suggestion of what it should be called, then? Sounds disruptive to me.
- dantheman 15y ago
  revolutionary or evolutionary - depending on your perspective; though I'd say the android is disruptive to the GPS market http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology
dasil003 15y ago
Why does something have to be cheaper to be disruptive? What if it's the same cost but better? Were automobiles cheaper than horses and buggies?
- IsaacL 15y ago
  Sorry for the late reply. Clayton Christensen, the person who invented the term, cited the automobile as an example of an innovation that was radical but not disruptive. The textbook disruptive innovation is the PC, since in terms of value for money it was much worse than the mainframes it replaced, but opened up computing to new markets. Christensen's basic thesis is that disruption is primarily a marketing phenomenon, not a technical one. If an innovation is clearly better to what came before, the incumbent companies will start to use it since it's what their customers demand. However, if an innovation is worse-but-cheaper, the existing companies won't be interested, but new startups will spring up to sell the disruptive innovation to previously unserved markets. Over time the new technology gets better, replaces the old technology, and the incumbent firms that didn't switch get disrupted. tl;dr: everyone thinks they know what "disruptive innovation" means but they don't. Read this: http://en.wikipedia.org/wiki/Disruptive_technology http://en.wikipedia.org/wiki/Disruptive_technology or C. Christensen's book.
  - thinkdisruptive 15y ago
    @IssaacL. You are right that most people don't know what a disruptive innovation is. That derives from too many believing that it means "innovation" of any kind, or "better" than anything else in the market because they equate the endgame (the disruptor usually ends up with dominant market share and the best product, but only after many product cycles) with what creates disruption, and they aren't the same thing. However, your brief definition skims over way too much of the theory. Disruptions don't always have to be cheaper or "worse" in the qualitative way that is generally understood. To disrupt, an innovation simply needs to be substantially better on a dimension that the new market cares about, while being referentially worse (compared with incumbents) on a dimension that the existing market and incumbent producers care about strongly (and therefore aren't incented to compete against the disruptor until it's too late). This is a completely consistent with Christensen, and also with market reality. However, Christensen was wrong about the car because he didn't follow his own logic. Do you see buggy and horse whip manufacturers anymore? Do you see people raising horses for transportation? How about trains as the primary (dominant) form of mechanical overland transport of goods and people? Cars were initially "worse" in that they spewed lots of dirty soot into the air, required fueling stations that didn't exist, could only drive on paved roads (which also didn't exist), and broke down constantly (which meant everyone that drove one had to be a mechanic). But, motorized vehicles were also superior in that they could go faster for very long periods of time without needing rest, they were cheaper per mile to operate than a team of horses, and they were fun to drive, offering a sense of freedom. Cars disrupted lots of things -- you just have to identify the right market and the cause of its disruption. The fact that the very first cars were really more hobbyist or wealthy-man's toys is irrelevant -- so were PCs until they became economical and found their niche through VisiCalc spreadsheets. The fact that Christensen wrote the seminal books and made the observations from which the theories were derived doesn't mean either that he is always right, nor that he always applies the theories correctly to predict disruption. He famously declared both the iPod and the iPhone to be not disruptive at their introduction, yet they are archetypal examples of disruption. In 1949, Thomas Watson Sr, IBM's then president famously declared that he couldn't envision a need for more than 12 computers to satisfy the needs of the entire world. Sometimes we're too close to things to see the forest for the trees. Also, the Wikipedia article has been overwrought by many techies who think it's about technology, and as such isn't an entirely accurate or good summary of disruptive innovation. In that respect, you are correct -- technology is neither necessary nor sufficient for disruption to occur, but correct market segmentation and positioning strategy, having the minimum viable feature set to satisfy an unmet or underserved need, targeting a market slice that is willing to pay to have its problem solved at a price that you can afford to make it are all critical properties of disruptive innovations, and they are entirely about marketing and business model, not about technology. Still, we all know that the majority of disruptions are enabled by new technology because it can create opportunities to solve unmet needs at a price point acceptable to an unserved market. I don't know if that better answers the original question, but it is sometimes, although not frequently the case that disruptive innovations are more expensive than what they replace. The iPhone is a great example of this, as is the original IBM PC which was far more expensive than the PCs that came out of the late 70s, but had the big advantage of IBM's imprimatur endorsing it plus an open architecture, which attracted apps and an ecosystem of vendors springing up to support it. There is an ebook discussing the widespread misunderstanding of disruptive innovation and why it matters available at http://tiny.cc/disruptve_confusion_ebook http://tiny.cc/disruptve_confusion_ebook

thinkdisruptive 15y ago

Yes, this is absolutely an example of the disruptor being disrupted. RIM has killed themselves by trying to out-increment features on a handheld email machine all the while ignoring, or failing to perceive as relevant how both iPhone and Android were irreversibly changing the basis of competition. RIM's only survival strategy is to stop playing catchup with me-too products that the market has already passed, and to offer something different leveraging their proprietary platform if possible, but satisfying and targeting a completely different market need, such as doing mobile social more elegantly or something like that. I'm in process of writing a detailed analysis of RIM's missteps that have enabled disruption, and why their current strategy is pointing them to oblivion. This article is killer for RIM -- only 26% of Blackberry owners plan to get another! http://tiny.cc/iphone5_kills_the_pack http://tiny.cc/iphone5_kills_the_pack