From: S. Mike Dierken (mike@knownow.com)
Date: Mon Sep 11 2000 - 10:16:34 PDT
> The problem in all the examples I mentioned wasn't necessarily poor
technical
> trade-offs, it was more a general problem of "the innovator's dilemma."
The
> market only absorbs innovation incrementally. It's never a good business
> idea to push the envelope too far ahead of the mainstream; building a web
> browser, e-mail client, and protocol stuff for PDAs in 1994, for example:
> bad idea. ;-)
>
> jb
>
I just started reading the book 'Innovators Dilemma' - a really good book
that every techno type should read. It outlines a powerful model to how
technology markets work, and it might even be correct.
From what I've read, the innovators dilemma doesn't talk about a market only
absorbing innovation incrementally.
It talks about innovation within a market outpacing the actual need of that
market - and leaving the market vulnerable to low-budget solutions that
improve over time to the point that they compete at the bottom of the market
& eat away at the existing suppliers. The low-budget solutions pioneer new
markets and as their technology improves it then can apply to older
markets - but the entrant company is used to operating at a lower profit
margin and can out-compete existing companies.
Part of this says that if an innovation gives more of what an existing
customer wants then it is 'sustaining technology'. Existing companies will
either invent these things or adopt them immediately.
An innovation that is better in some technical aspects, but worse in the
aspects that current customers measure is a 'disruptive technology'. You
have to find new customers. Existing companies have a hard time investing in
technology that is clearly worse than current technology. For example, a
3.5" HardDrive had less room, was slower and cost more than an 5 1/4" HD.
Why would a manufacturer spend millions developing that piece of crap? The
workstations needed MORE space, FASTER access times. But, a new market for
desktop PCs needed physically smaller drives regardless of storage or access
times. Of course a few years later, they could store much more and were able
to compete at the low-end of the workstation market. If you had a better 5
1/4" drive, you would still suck because you can't enter the new desktop
market and you've got tons of competitors in the 5 1/4" drive market.
MikeD
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