Disruptive Innovation

Clayton Christensen's The Innovator's Dilemma (1997) introduced one of the most influential modern business ideas - - disruptive innovation - - and proved that high academic theory need not be a disadvantage in a book aimed at the general reader.  Mr. Christensen showed that great companies can fail despite doing everything right: even as they listen to their customers and invest heavily in their most productive technologies, their markets can be destroyed by radical new technologies.

Consider the following examples - -

• Texts versus Mail - - Cellphone text messages sent up 1,200,243% since 2000.  During the same period, USPS mail volume down 19%.  The USPS says it will be insolvent by the end of 2011 without a bailout.
• Netflix verus Blockbuster - - Netflix sales up 43,101% from 1999.  Blockbuster sales down 29% over the same period.  Blockbuster hit 4,000 stores in two decades - - filed for bankruptcy, September 2010.
• Amazon versus Borders - - Amazon sales up 808% form 1999.  Border sales down 44%.  Filed for bankruptcy, February 2011.  Amazon almost single-handedly bankrupted the No. 2 bookseller in a decade.
• iTunes versus CDs - - Songs sold on iTunes up 1,189,900% from 2003.  Songs sold on CDs down 60%.  Tower Records went bust in 2004 and Musicland folded in 2006.

Bytes beats bricks - - digital companies are so big (when your competitor names their company "Amazon" - - the light bulb really needs to go off) and growing so fast, that they're obliterating old businesses and old business model.

Watch what building you are standing in front of - - the key part of "disruptive innovation" is disruptive.