Today’s Innovators dilemma

Clayton Christensen introduced the famous ‘Innovators Dilemma’, in 1997, describing When New Technologies Cause Great Firms to Fail. According to him these disruptive innovations create a new market through the introduction of a new kind of product or service, one that’s actually worse, initially, as judged by the performance metrics that mainstream customer’s value. Therefore the market leaders are not reacting as they consider the new technology inferior. The moment of market absorption of a new product is determined by the moment the (technical) performance of new product meets the minimum required market performance. Often at that moment it is too late for the market leaders to react and they fail. The main source of disruption is technology and disruptive innovation is a synonym of disruptive technology.

However the world is changing rapidly. Products and service based on new technology are immediately better even if judged by the performance metrics that mainstream customer’s value. An example is navigation on smartphones: it was a better, cheaper and more stable solution at once relative to systems from TomTom, Garmin and Magellan. The company value of these companies almost dropped instantly. The disruptiveness was not in the technology but it was the application allowing the customers to use their smartphone differently. There are many others e.g. WhatsApp wiped out text messaging in what Schumpeter in 1950 already called ‘creative destruction’.  The new Innovators Dilemma is about new business model that require different behavior. The moment of market absorption of a new product is no longer determined by technical performance but by the moment the customer adapts to the new behavior.

Today’s Innovators Dilemma is about: 
Building new business through changing the behavior of customers

See also my presentation at the Corporate Startup Summit, Cologne Germany August 26 2013 on

Slideshare .