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

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 http://en.wikipedia.org/wiki/Disruptive_innovation