The Silicon Valley Business Journal via Upstart:
Harvard business professor Clayton Christensen literally wrote the book on technology disruption, and he thinks Apple, Tesla Motors, venture capitalists and most of the nation’s colleges and universities should be afraid.
The author of The Innovator’s Dilemma said Wednesday that all of them could be killed by less advanced competitors in the same way that many once dominant technology companies have been in the past.
Christensen shared his theories about how innovative giants are felled and replaced by relatively less sophisticated rivals, speaking to an attentive crowd of young entrepreneurs and funders at the Startup Grind conference in Mountain View, California, on Wednesday.
Basically, his theory of disruption centers around how dominant industry leaders will react to a newcomer: “It allows you to predict whether you will kill the incumbents or whether the incumbents will kill you.”
If a newcomer thinks it can win by competing at the high end, “the incumbents will always kill you.”
If they come in at the bottom of the market and offer something that at first is not as good, the legacy companies won’t feel threatened until too late, after the newcomers have gained a foothold in the market.
He offered as an example the introduction of cheap transistor radios. High fidelity, vacuum-tube powered incumbents felt no threat from the poor quality audio the transistors produced and missed the technological shift that eventually killed many of them.Previously:
Here is what Christensen said threatens Apple, Tesla, VCs and academia.
Apple too good for its own good?
Apple could be on path for a classic disruption in Christensen’s view. Successful innovative products like the iPhone are usually based on proprietary technology because that is how the dominant business carves out, protects and builds its top market position.
But at some point as they get better and better, they start to exceed what people actually need or are willing to pay extra for.
“When that happens the people who have the proprietary architecture are pushed to the ceiling and the volume goes to the open players. So in smartphones the Android operating system has consummate modularity that now allows hundreds of people in Vietnam and China to assemble these things.
“Just like I pray for Harvard Business School, I pray for Apple.
“They always have won with their proprietary architecture and because of their advantage. If you ask them what is the core of the company, they will say it is design and the interaction with the customer. Manufacturing really is not our core competence.
“So you just give that to the Chinese. But then what happens to them? As the dominant architecture becomes open and modular, the value of their proprietary design becomes commoditized itself. It may not be as good, but almost good enough is often good enough.”...MORE
Dec. 18, 2011
Harvard's Clayton Christensen: The World's Most Influential Business Thinker (and what he's investing in)
