Disruptive Innovation Doesn’t Always Hurt Market Leaders | Hacker News Reader

Disruptive Innovation Doesn’t Always Hurt Market Leaders

knowledge.wharton.upenn.edu

19 pointsdalek2point39 comments

The overloading of the word 'disruption' irks me terribly. It seems like everybody wants to be 'disruptive', when all they really mean is 'successful'.

Anyway, Christensen defines 'disruptive innovation' fairly rigorously, and it doesn't seem like their interpretation fits with his. Half the point of disruptive innovations is that, retrospectively, they were ignored and allowed to exist by incumbents for whatever reason, eventually toppling them. If they've been acquired then they're not disruptive anymore, are they?

Would Oculus Rift have been a disruptive innovation if it was left to grow? Would it have upended value networks? Maybe. Is it a disruptive innovation now that Facebook has acquired it? Well not according to Christensen's criteria for 'disruption'. The product could be called a radical innovation, but it's not disruptive.

Uber is one of the few startups that I would call legitimately disruptive, because it uses technology to take customers from the legally regulated taxi industry. Airbnb and Aereo are also what I would consider disruptive. Tesla Motors perhaps.

I think that whether local governments have passed or tried to pass legislation banning a given startup is a good litmus test for how "disruptive" a startup really is. If your startup doesn't have any serious legal challenges thrown in its path, it's probably not very disruptive. The first thing incumbent corporations will do when faced with a legitimate threat is use their political influence to try to make the threatening business model illegal.

In the same spirit , Christensen talks about incumbents improving their performance more than customers care about. It doesn't seem to describe the voice recognition industry ,at all. I'm not sure even today's voice recognition systems can be considered "good enough".

I think startups are turning out to be more like outsourced, free-market R&D for the bigcorps. They can sit back, wait and see what potentially disruptive startups are gaining traction in their own market, and then just acqui-hire them. Disruption isn't a problem when you have the cash to simply buy the disruptors.

This is true for the internet companies. For Apple, the innovation is organic (much to the chagrin of VCs [0][1]). Google and Facebook are constantly baited into buying startups because their business fundamentally has a shallower moat than Apple's. There's no fear factor that VCs can prey on with Apple - there's not many hardware startups being funded that can ever hope to threaten Apple. When they do make an acquisition they'll almost certainly never overpay.

[0]https://twitter.com/pmarca/status/464741929356230657

[1]https://twitter.com/cdixon/status/427602474086584320

Beats? Might work out for them, but is it as likely to be a good deal as YouTube or Danger was for Google?

Danger? Do you mean: http://en.wikipedia.org/wiki/Danger_(company)

Because that's an odd example of a 'good deal'... acquired by Microsoft for $500m, eventually released Kin. Spent over $1B on Kin, and was a huge failure for MS.

I think he meant Android, done by the same founder as Danger, but bought by Google for $50M in 2005. Android's now potentially a $multi-billion business.

Only Google makes pennies from Android. Samsung makes the $multi-billion.

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