This has good advice based on clear case studies.

Most interesting highlights:
1. Big companies ignore smaller segments to their detriment; the company that focuses on a niche market and does really well with them will then expand outward to the more generic market and kill the competition. Big companies want to move on markets that already exist but you can’t know anything about a market that doesn’t exist yet.
2. Disruptive markets are the ones where first mover’s advantage matters the most
3. There is no market data, there is no hard numbers, there's none of that when you're dealing with a new emerging market
4. Discovery-based planning: this is when you assume the market forecasts are wrong, not right
5. As the products in a new market evolve, the customers’ main desires that drive their purchasing decisions go from functionality to reliability to convenience to price. Once you’re competing based on price you are making low margins and can only win through economies of scale and things like that.
6. Almost all large companies are terrible places to do discovery of new projects; it will always be an uphill battle of people asking why that project needs to exist at all because it’s such a small portion of the pie, it doesn’t match with a large company’s growth needs.
7. Normally the only times a large company fosters a new innovative product successfully is when the CEO himself (or someone nearly as important) makes it their personal vision and mission to make it happen at all costs, and even then it’s just a one time deal. Like Steve Jobs pushing Apple to make the iPhone even though it cannabalized iPod.
8. Johnson and Johnson is an interesting case study, the exception to the rule. It manages 160 completely autonomous companies

There’s good stuff in here. But some of the advice is old news, the case studies are ancient history, and it’s also written clearly for a target audience of middle managers at big stuffy corporations that don’t understand how innovation works in the least. You know, the kind of companies that are dinosaurs; huge but ultimately irrelevant because they probably won’t be around twenty years from now. Finally, the tone was too corporate to be engaging.

I’m still begrudgingly glad I read this and at least it had the blessed strength of not being as overly long as most nonfiction is.

Good book dating back from the 90s. The author's theory should be known by anyone in a position to make strategic decisions. To be honest I was skeptical at first about his ideas, but they quickly became obvious as more and more cases were presented.

Taking away one star for being superfluous -- half of the book comprises the same few takeaways that are repeated over and over again in the introduction, conclusion, and in between each case study.

Taking away one more star for choosing a misleading title -- a better title would be 'The Corporation's Dilemma'. The book is targeted to successful executives as opposed to ambitious innovators and the author never gives credit to innovators that don't match his narrow definition of 'disruptive', (not even in 2015). Many companies today disrupt through quality execution and/or network effects: Uber, Facebook, Apple, Tesla.

Still I feel that for its intended target (corporate executives) this book is a must read.

One of those books that re-reading would give you a deeper insight over time. Will re-read again in 2022. A great book for all technology investor / operators, for both hardware and software - the mental model described here, I believe, is timeless and will prove to be useful for many years to come.

Again - must read.

breadth ~5/5
depth ~5/5
applicability ~5/5

This book is written for managers about managing business. I'm neither a manager nor a business owner. Still, loved it!

Somewhere in the middle I got suspicious about the quality of the book. How many times will 3.5 inch/5 inch/8 inch hard drives be mentioned!?

But just as I was getting frustrated the author pulled me back in. He proposes that there's natural forces within companies and that it would be prudent to use them - not fight them.

The book ends on a high note: he shows us how he'd use the principles and theories he developed to create a disruptive business with electric cars (this was written long before Tesla was around!). It was like he could see the future. I've seen fragments of ideas from Taleb's Antifragile, The Lean Startup, and 0 to 1, which are all books I love. This book is older, though, and seems like a foundational piece for the others.

So I leave this book behind with a feeling I understand the world a little better. 5 stars!

The ideas are astounding - a must read, however, the book is quite dense. There is a ton of research behind everything, but the presentation can be a bit redundant/overwhelming.

Definitely worth the read - but don't be afraid to skim sections once you've gotten the point.

หนังสือคลาสสิคที่ต้องอ่าน กับคำถามแทงใจว่าทำไมบริษัทยักษ์ใหญ่ถึงล้มเพราะ Disruptive Technology

ถึงหนังสือเล่มนี้จะอายุเกิน 10 ปี แต่พอมาดูบริบทในปัจจุบัน บริษัทยักษ์ก็ยังดูจะติดกับสับสนระหว่าง Sustained Technology กับ Disruptive Technology แถมยังเดินหน้ารอวันที่จะถูก Disrupt แบบไม่รู้ร้อนรู้หนาว

แนะนำมากๆ ครับ

Well-run companies fail in the face of disruptive technologies because their management policies disincentivize investment in unknown markets. This leaves them vulnerable to attacks from these unknown markets. Thus, to survive and grow, established companies must know when not to use traditionally approved practices.

Clayton M. Christensen writes clearly and analytically, with lot's of examples and research, pleasure to read. Thoughts so logical you wonder how the managers/CXO's he talks about didn't figure this out by themselves already yesterday. A thought provoking read no doubt, even for those not in executive positions.

It's not a 100%, but gets some future predictions right - fun to discover them 18 years later. And it's also interesting to use the frameworks described to think about new technologies that constantly keep surfacing on this Information Age we live in.

"It is unclear how long the marketers at Microsoft, Intel, and Seagate can succeed in creating demand for whatever functionality their technologists can supply. Microsoft's Excel spreadsheet software, for example, required 1.2 MB of disk storage capacity in its version 1.2, released in 1987. Its version 5.0, released in 1995, required 32 MB of disk storage capacity. Some industry observers believe that if a team of developerswere to watch typical users, they would find that functionality has substantially overshot mainstream market demands. If true, this could create an opportunity for a disruptive technology - applets picked off the internet and used in simple internet appliances rather than in full-function computers, for example - to invade this market from below."

So essentially Christensen predicted Google Docs, Zoho Docs and similar products in the year 1997. Or if we stretch a bit, cloud services not present on our own devices, but on far away server rooms.

Tenth chapter of this book is basically the manual for approaching electric vechicles as a disruptive technology - a manual for Elon Musk to build Tesla. :)

Although the conclusion the author arrives is not Tesla Model S (a premium product), but rather a cheap and low range Mitsubishi iMiev or Nissan Leaf. Well, that's why you don't predict, but explore and try.

"To measure market needs, I would watch carefully what customers do, not simply listen to what they say. Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group. Thus, observations indicate that auto users today require a minimum cruising range (that is, the distance that can be driven without refueling) of about 125 to 150 miles; most electric vehicles only offer a minimum cruising range of 50 to 80 miles. Similarly, drivers seem to require cars that accelerate from 0 to 60 miles per hour in less than 10 seconds (necessary primarily to merge safely into highspeed traffic from freeway entrance ramps); most electric vehicles take nearly 20 seconds to get there.
And, finally, buyers in the mainstream market demand a wide array of options, but it would be impossible for electric vehicle manufacturers to offer a similar variety within the small initial unit volumes that will characterize that business. According to almost any definition of functionality used for the vertical axis of our proposed chart, the electric vehicle will be deficient compared to a gasolinepowered car.
This information is not sufficient to characterize electric vehicles as disruptive, however. They will only be disruptive if we find that they are also on a trajectory of improvement that might someday make them competitive in parts of the mainstream market.
The trajectories of performance improvement demanded in the market—whether measured in terms of required acceleration, cruising range, or top cruising speed—are relatively flat. This is because traffic laws impose a limit on the usefulness of ever-more-powerful cars, and demographic, economic, and geographic considerations limit the increase in commuting miles for the average driver to less than 1 percent per year.
At the same time, the performance of electric vehicles is improving at a faster rate—between 2 and 4 percent per year—suggesting that sustaining technological advances might indeed carry electric vehicles from their position today, where they cannot compete in mainstream markets, to a position in the future where they might."

... "If present rates of improvement continue, however, we would expect the cruising range of electric cars, for example, to intersect with the average range demanded in the mainstream market by 2015, and electric vechicle acceleration to intersect with mainstream demands by 2020."

To which one living in 2015 can chuckle - Tesla Model S came out in 2012 and it definitely beats any average acceleration and range demands. Actually any electric vehicle in production accelerates like a mad horse.

And a last piece for my memo: the parameters by which customers compare the products on the market (from left to right) FUNCTIONALITY - RELIABILITY - CONVENIENCE - PRICE.
In a young market, functionality is almost the same for all products, then they will start looking at reliability to differentiate the product. If that becomes the same, they will look at convenience. And if the products have become all three, the last thing basically will be a price war.

This books starts off slow in the first section giving context on the disk drive industry that serves as the source of examples.

Once you get into the second chapter it is pure gold. Each chapter explains a phenomena that I observed differentiates sustaining from disrupting companies and explains it. I’ll be keeping this one in my library for a long time!

Great book. Well researched but reads like a long journal article. It requires a lot of mental fortitude, but I also feel that for those who already understand most concepts - should be a good reference book or refresher for certain aspects of the theory on disruptive technology.

Excellent example of how to communicate learnings from scientific research to a wide audience. Recommend to anyone engaged with or interested in business. Discusses why the very same characteristics that lead to success lead to failure, and how to address those issues. Uses concrete examples that are discussed in depth.

As someone who has read a fair amount about creativity and innovation, there is a lot about this particular book that I find deeply interesting and thought-provoking.  There is something lost and something gained by focusing aspects of creativity on technology, although someone who was an art historian or a music historian would recognize that changing trends are at least broadly similar in that great artists, just like great firms, can be left behind by changes in the markets.  Anyway, this particular book takes a very detailed look at several lines of business, some of which I have studied in my own academic career (like the disk drive market) and then examines that what made companies successful in their lines of business also made it very hard for them to pivot successfully when their business was threatened by new developments and technologies and approaches.  The insights this book discusses are backed up by a very detailed look at market sizes and market share of existing or new lines of business and there are definitely some ways that the author explains how it is that large established firms can manage to successfully engage in innovation efforts without jeopardizing existing business approaches that are well worth considering.

In a bit more than 200 pages, the author discusses the dilemma of innovation in several different lines of business that show similar patterns that the author uses to draw general insights that can be applied to present and future situations.  The first part of the book examines why great companies can fail (I), discussing some insights from the hard disk drive industry (1), examining value networks and the impetus to innovate (2), discussing the mechanical excavator industry (3), and looking at the inability of companies to reverse upmarket retreats (4).  After that the author discusses how companies seek to manage disruptive technological change (II) in spinning off new organizations or divisions (5), matching the size of the organization to the size of the market (6), discovering new and emerging markets (7), appraising an organization's abilities and weaknesses (8), looking at the product life-cycle and how it relates to market demand and performance (9), a case study in managing disruptive technological change (10), and a summary of the dilemmas of innovation, followed by a group study guide.  The insights provided show plenty of failures but at least a few models for success when it comes to harnessing innovation successfully.

There are at least a few insights that a reader can grasp easily from this book.  For one, companies tend to tailor their approach to the sort of market they are already in, and it can be very hard for them to deal with uncertain situations as well as the low profit margins that exist in new and emerging markets.  Even when a company recognizes a technological change and develops a new product or service to meet it, existing customer relationships and company culture makes it very hard for companies to change and shift their approach without threatening their own existence.  But getting passed by when it comes to technological change means that one becomes limited to small niche markets while one's large profits move to new markets with new companies that are dominant and have established relationships with new customers.  The best solutions the author discusses are to have different divisions competing with each other to see which technologies will prevail in an uncertain market or for companies to establish spinoffs that are able to capture new and emerging markets in collaboration with an existing company, doing plenty of investigation of what works and saving enough resources to be able to build the solutions that are found to be successful.  And one must remember that in a world of constant change that no success or excellence is permanent.