The Innovator’s Dilemma

3 minute read

Intro

As always, I don’t agree with or use everything I read, but I will still try and summarize it here. If you are new here, read why I put my semi-personal book notes online.

I read this book about 10 years too late. My summary will be extremely brief and only for the points that I think have withstood the test of time. When I put this book on my to-read list, I didn’t realize it had been made in 2003. This would have been an amazing book to have read in 2003, but that’s hindsight for us.

Summary

When given the choice between improving existing products or creating new markets, those companies that do the latter will succeed. Sound familiar?! Yes, it’s the beginning part of Zero to One where he talks about going from 1-N vs 0-1. Simply uncanny… Clayton calls it sustaining technologies and disruptive technologies, respectively. Yes, as in the popular tech phrase of “disrupt XYZ”.

Disruptive technologies typically are first commercialized in emerging or insignificant markets. This gives them space to begin growing while being off of everyone’s radars. It’s not just small companies that do this, big companies can do this with a novel product line.

Innovators Dilemma

The main point of the author lies in how to listen to customers when you know customers can’t think outside the box. This dilemma has become a very standard part of product development. A popular framework I like to use to solve this is called the JTBD. This allows a product to be created separately from the context of what the customers know can exist in the world today by only focusing on the workflow and not the solution. In the product space, I believe this why relatively general exploratory questions are asked by designers instead of presuming a problem and solution.

The author talks about how in both situations where a company listened to its customer and then aggressively fulfilled the customer’s future needs, the company failed. So how do you get past this? I think having a great proven team in the space who knows the type of questions to ask and where to investigate can solve a lot of these problems. De-risking and doing a lot of testing as mentioned in Lean UX is a good way to understand which innovation is worth aggressively investing in. That is the insight the author didn’t have when this book was initially written that has become at least slightly more available now.

Principles of Disruption

Disruption almost exclusively affects large companies by quickly rendering products and services obsolete.

Large companies are slow to react since their procedures have been cultivated to allow maximum stability to shareholders and predictability in profit streams.

Markets that don’t exist are difficult for most to analyze.

The capabilities of an org also define its disabilities by definition.

The technology supply is not the same as market demand.

I do think now, especially with instruments like acquisition, big companies do have more insulation against being blindsided as the author mentions. Big companies now also have their innovation groups internally that act as an internal startup to innovate in the small markets outside of the typical responsibilities of the larger portions of the company.

Expect Failures

When a company (startup or established) explore a new market, failures are expected. This is because the outcomes are unknowable until they are explored. This is ok and should be celebrated as a step in finding that disruptive technology for an emerging market.

The normal processes that are used to build in an established company will not work when exploring an emerging market. Creating a team and process different from the norm will be valuable here.

Innovator Insights

Market progress is not the same as technological progress. Both need to be considered including the dynamic between them. Disruptive technology is as much a marketing problem as a technical one.

Innovation requires a type of resource allocation that is difficult for established companies to do correctly.

Disruptive markets require failure, de-risking, and iterative learning. Failure is a part of the process and the goal should be, as some SV engineering teams say to, “Fail Fast”.

Outro

This book is geared to bigger companies. It goes into depth at how big companies are consistently blindsided and for what reasons. The flip side of that is it gives insight to small startups on where the Achilles heel of a big company might be.

Avishaan’s Goodreads

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The Hidden Brain: How Our Unconscious Minds Elect Presidents, Control Markets, Wage Wars, and Save Our Lives
Hello Startup. A Programmer's Guide to Building Products, Technologies, and Teams
How to Win Friends and Influence People
Drive: The Surprising Truth About What Motivates Us
The Systems Mindset: Managing the Machinery of Your Life
Smarter Faster Better: The Secrets of Being Productive in Life and Business
The Five Dysfunctions of a Team: A Leadership Fable
The Pragmatic Programmer: From Journeyman to Master


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