Book notes about innovator's Dilemma

This book is a classic of innovation. Although it is not thick and has little content, it provides a new perspective.

This book highlights the difference between Sustaining Technology and disruptive technology.

Let's talk about continuity and destructive technologies.

Continuity technology: the common feature of continuity technology is that it improves the performance of mature products based on the performance of mainstream consumers in major markets.
Destructive technology: destructive technology has brought completely different value propositions to the market. In general, destructive technology products have lower performance than mature products in mainstream markets, but they have other features that edge consumers value. Destructive technology-based products are generally cheaper, simpler in performance, smaller in size, and more convenient for consumers.

The most classic example in the book is the disk:

Taking the development of the disk drive industry as an example, we found that 11-inch, 8-inch, 5.4-inch, 3-inch, 2.5-inch, and 1.8-inch disk drive enterprises have been leading each other for a while, you are the overlord of a disk of this size, but he becomes the Overlord when the next size is developed, and then the next size is changed to another one. Why does this happen?

For example, Enterprise A is the leader in the production of 11-inch large computer disk drives. At the beginning of its 8-inch technology, enterprise A has always been a technology leader and has the ability to develop and manufacture 8-inch drives, however, it does find that the increase in 8-inch storage space is simply less than 11-inch, while its large computer Customers focus on the storage performance. If Enterprise A insists on promoting an 8-inch disk, the customer will switch to other manufacturers that can improve the performance of the 11-inch disk. No way, the customer will make enterprise a still invest resources to the 11-inch disk. Enterprise B is a new manufacturer that produces 8-inch disks. It cannot win large computer customers from Enterprise.

Therefore, it had to focus on looking for customers who are more focused on dimensional performance, just as the micro-computer came out, customers are more focused on small-size products, so B is a popular enterprise, enterprise A wants to enter the 8-inch market again, and finds that enterprise A is no longer able to catch up with Enterprise B in terms of brand and technology. As a result, Enterprise A has declined. The technology continues to develop, and there is another 5.4-inch disk, but the microcomputer customer thinks that the 8-inch disk is small enough and there is no need to pursue a smaller disk, so Enterprise B has listened to its customers. However, when the desktop computer came out, the Desktop client chose to first enter the 5.4-inch C Enterprise. Like Enterprise A, Enterprise B fell. Then the laptop came out and chose to produce a 2.5-inch d Enterprise. Then the 1.8-inch E Enterprise was born, but their customers were not using the computer at all, instead, the 1.8-inch disk is applied to the data storage of the monitoring camera.

This example of a failed innovation along the optimal path is not a case, and decades of situations are constantly happening in engineering machinery, motorcycles, computers, retail commerce, and other fields. The masses generally think that the decline of the market leader, for example, S Company in the previous case, is defeated by small companies that are brave in innovation because of the prevalence of bureaucracy and management processes. On the contrary, the actual situation is exactly the opposite. these large companies are too well-managed, and the cost-to-benefit ratio calculations for various innovative solutions are too precise, so they will fail in the competition for the next generation of innovative products. This sounds like a paradox. Why is smart decision making counterproductive? Let's take a look at the interpretation of innovator's dilemma.
1. New technologies are often developed successfully in large companies, or large companies are capable of developing new technologies.
The two major companies will try to sell new technologies to their current heavyweight customers, but they will not succeed. At the same time, the major companies are worried that once the new technologies are not accepted in the production market, the investment will be wasted, at the same time, the new product market is small, and the growth pressure of large external companies forces large companies to abandon a niche market with unknown prospects ..
Based on the requirements of existing major customers, the three major companies continue to make resources more advanced, faster, and stronger to meet the existing high profit rate and competitive situation.
4. Small companies that focus on new technologies are seeking for survival and opening up new markets and new customers.
5. New technologies gradually mature and cost-effective compared with the previous generation of technologies, leading to the loss of customers from large companies.
The six major companies are scrambling to come up with new technologies that have been in the dust for a long time, develop new technologies temporarily, or acquire companies with new technologies. However, it is too late that small companies have become large companies and set up defense thresholds, as a result, the original large companies collapsed or left the second line.

So how should we deal with this dilemma? For those large enterprises that are already excellent, it is not well known to coordinate the development of breakthrough technical design products in the future. The best way is to set up another small company to use breakthrough technical innovation for production and operation. Of course, this does not work in all scenarios.

The theory of this book is very practical, especially in the computer/Internet field. IBM was very popular in the past. Later I had Apple and Microsoft, and later I had Yahoo and Google, facebook has been launched in recent years. In the same way, Facebook will be overturned sooner or later.

In short, the innovator's dilemma provides us with a different perspective of discovering and thinking about problems. It is worth reading.

 

 

By yutao