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Book Report - The Innovator's Dilemma

This is a truly amazing business book - one that opened my eyes with each page I read. The author uses real life industries, companies and people as case studies and examples to prove his points, which are clearly articulated and communicated throughout the book.

The basic premise of the Innovator's Dilemma is that established companies are always at risk of disruptive technologies precisely because they are well run, market leading and customer focused. They have no tools to cope with disruptive technologies and with small companies entering their market "from below."

Working harder, better and making dumb mistakes is not the answer to the innovator's dilemma. In the straightforward search for profits and growth, very capable executives in very successful companies, using the best techniques have led their firms towards failure.


  1. The pace of progress that markets demand or can absorb may be different from the progress of technology. Products that do not appear to be useful to customers today may be exactly what they need tomorrow. It can hurt to listen to your customers!
  2. Manaing innovation mirrors the resource allocation process: innovations given low priority in resources and funding will fail. Spin off innovations.
  3. Match the market to the technology; rather, don't force fit disruptive technology into mainstream markets, here they are almost sure to fail.
  4. Most organizations capabilities are very specialized and context-specific than managers like to believe - this comes from companies organizing correctly around value networks that make them successful.
  5. The information required to make large and decisive investments in the face of disruptive technology does not exist. There is huge risk of failure and companies must be able to create and combat disruptive technologies quickly, cheaply and flexibly. Failure and learning are intrinsic to the search for disruptive technologies.
  6. It is not wise to always be a leader or always a follower. Companies must adjust their approach depending on if they are pusuing a sustaining or disruptive technology.
  7. Lastly, there are powerful barriers to entry and mobility that differ significantly from the types defined and historically focused on by economists - small companies can build barriers quickly by focusing simply on things that established firms won't (because they don't make any sense!)

How to spot disruptive technology - use the litmus test:

  • The technology is simple
  • It starts at a very low price
  • Minimizes infrastructural and regulatory barriers
  • Follows a path of least resistance