Success, then disruption, then failure

Clay Christensen

You can be too good at something, too successful, so that somebody else, an upstart, undercuts and topples you, turning your success into failure. That’s because of a fundamental asymmetry between your view of the world and your upstart’s. And it makes you vulnerable.

It should be immediately obvious how this notion relates to Kipling’s idea that triumph and disaster can be impostors, which is also the idea that my forthcoming book is based on.

But the idea comes not from the worlds of philosophy or psychology, but from the world of business, which I usually consider unbearably boring and banal. (If it surprises you that a correspondent for The Economist, who has written a lot about business, would say such a thing, well, there it is. I said it.)

That said, we have already discovered that conductors can teach us about leadership and that Rembrandt can teach us about good writing. So why shouldn’t a Harvard Business School professor have something to teach us about life?

The professor is Clay Christensen, and IMHO he is the only business writer who has ever written a book that is not painfully obvious and banal but simple and profound. He doesn’t quite make it into my pantheon of great thinkers, but almost.


The term he coined in his most important book, The Innovator’s Dilemma, is disruptive innovation. He explains it in this video.

What Christensen observed in one industry after another is, first, an incumbent. That is the most successful company in the industry, the leader. This company improves, year after year, by adding features to its products and listening to its best customers and meeting their demands. At some point, however, this company’s products get so good that they are more than good enough for most people, and too complex or expensive for the least demanding consumers, or people who don’t even use the product at all yet.

Eventually, Christensen observed, a disruptor comes along. This is a scrappy new company, not worth the attention of the incumbent. It makes products that are clearly “inferior” to the incumbent’s products. They are more basic, simpler, cheaper.

For precisely those reasons, the disruptor will have different customers than the incumbent. The demanding customers stay with the incumbent, whereas people who never used the product at all, or who used it very little, will try out the disruptor’s products.

The incumbent will thus not only shrug at the disruptor but enjoy his presence. That is because the incumbent can now shed the low-value customers and serve only the most demanding customers, charging them more and making more profits. Things seem to be going better than ever.

The disruptor is also enjoying himself. He is not, at first, competing with the incumbent at all, but aiming at people the incumbent never served. He sees the world in a different way. A small new market, with tiny revenues, looks fantastic to the disruptor, whereas it would make the incumbent yawn. This is the asymmetry in worldview.

But something else is going on, unnoticed: All the while, the disruptor, too, is making improvements. And at some point the products of the disrupter become good enough for everybody. This is when the impostor drops his guise.

The high-end customers suddenly start wondering why they have been paying for all those strange features they never use anyway. They defect. The incumbent is toppled and falls. The disruptor takes its place. It becomes a new incumbent, until it, too, is disrupted.

An example

Christensen gives great examples from business history in his book, but let’s take one that, in a different context, The Hannibal Blog mentioned just the other day: cloud computing.

  • Incumbents: Microsoft (Windows + Word, Excel, Powerpoint); Apple (fancy, snazzy laptops and such)
  • Disruptor: Google and many smaller companies (WordPress included) that provide free or cheap services over the internet.

For years, Microsoft “improved” Word (to take just that example) by adding features, then made us pay more moolah to install a new version. Microsoft was listening to its most demanding customers–the ones who, say, pretended to need a multi-color, rotating, animated table in their letterhead.

The rest of us hated Word because we just wanted a clean white page that does not disappear every time a laptop breaks. Most of the rest of us (the young and indigent, the poor in Latin America, Asia and Africa) could not afford Word at all, and so we did not use it.

Along comes Cloud Computing. You can now type, save and share simple text documents on the internet, free. This has advantages: several of you, in different places, can work on the same document at the same time. You can access the document from any phone or computer. If your computer breaks, you no longer care.

It also has “disadvantages”: You cannot get that multi-color, rotating, animated table in your letterhead. (More seriously, I could not write my book on Google Docs because it does not support endnotes yet.)

But who cares? Almost nobody, it turns out. So, right now, the poor, the savvy, the un-demanding are the ones using Google Docs most. The suits are still using Word.

Wait a few more years (months?). Then Word as we know it will disappear.

Enough business, back to life!

That is the most I have ever talked about business in my private life, and I feel so yucky that I might have to take a shower. But I was just setting up a different point: Why should Christensen’s insight not apply to … art, science, sports, love and life?

As I write this, I am coming up with examples from all these spheres of life. In due course I will accost you with them. But in the mean time, please feel free to suggest your own in the comments.

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