This disruption thing is harder than it looks
In a recent Wall Street Journal article, writer Kimberly Chou reviewed the fates of several contenders to be disruptive technologies in the industries in which they were introduced. 
. Among these are the flip videorecorder, the "peek" phone and various forms of internet enabled devices. What they have in common is that they are all trying to carve out a niche in markets that were established at much higher price points. As the article makes clear, it's not as easy as it looks. To be truly disruptive, along the lines of Clayton Christensen's definition of the term, a device would have to introduce a new dimension of competition, or offer a radically different price, making usage affordable for previous non-users or otherwise appealing to customers who weren't attracted before. Unfortunately, the Peek phone is finding that established rivals may be dropping prices so quickly that its would-be niche of customers willing to trade off more advanced functionality for a cheaper price 
may be a lot smaller than it initially thought. All of which goes to illustrate one of the principles of disruption -- the offer has to be dramatically, not just incrementally, different along several important dimensions to disrupt an industry. Just price, or simplified features, isn't going to do it.
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- Posted: Saturday, July 18, 2009
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Rita,
In addition to the things you mentioned, you also have to be fast. One of the most potentially disruptive technologies I remember was the Iridium global satellite phone network. It was begun at a time when cell phone coverage was hardly broader than the county, roaming was clunky and superexpensive and there were huge swaths of the world that had no cellphone coverage at all. Iridium seemed like a smashing idea.
But in the 10 years it took to build it out, cellphone networks proliferated, became seamlessly interconnected, and the world converged on one main cellphone standard. Iridium’s market was limited to jungles, the poles and the deep sea.
Another nondisruptive disruption.
regards, John
Oh, John you are SO right. I actually use the Iridium case in class as a poster child innovation that got so many things wrong, you end up looking at it and saying “what were they thinking????”
Big downside, limited upside, huge fixed cost investments, failure to change the approach as the markets changed and leaders personally associated with a ‘damn the torpedos’ approach. It all adds up to big danger signs.
So when do you want me to bring up the TARP?
