Sunday Links

A few thoughts and associated links on the Great Disruption Debate of 2014, triggered by Jill Lepore’s scathing indictment of the theory of disruptive innovation in this week’s New Yorker:

  • The theory of “Disruptive Innovation” is a very narrow one, and pretty easy to understand: upstart companies produce cheaper, less-“featured” products that reach customers who otherwise could not afford the more expensive product or don’t need all of the features. Over time, the upstarts produce slightly better, slightly more expensive products, which eventually begin to compete with the incumbents’ products, and often overtake them – eventually. Hewing closely to this definition, AirBnB is a disruptive innovation (using technology to offer a theoretically cheaper, inferior product to a hotel room), but Uber is not (Uber is a better, more expensive offering to traditional taxis – though you could argue that Uber is actually disrupting the personal car)
  • Most individuals and companies opining about the need to “disrupt” this or that aren’t referring to the theory; the term has been watered down and broadened to include basically any type of innovation. The article both outlines this trend and exemplifies it; Lepore, for example, counts the financial innovations that helped stoke the financial crisis in 2008 (e.g., collateralized debt obligations, mortgage-backed securities) as “disruptive innovations,” but it seems fairer to count them only as “innovations.” Not all innovations are disruptive innovations, and not all “disruption” is disruptive innovation (Uber is certainly disruptive in the colloquial sense of the word)
  • Apropos of the point above: Taco Bell doesn’t really need a “resident disruptor” because it already churns out the cheapest, shittiest tacos available. In Christensen’s parlance, the Doritos Locos taco is a sustaining innovation (Taco Bell is making what is theoretically a “better” taco), not a disruptive one
  • The article misses the point when it comes to “disrupting” people-centric industries like education, health care, and journalism, arguing that these are not disrupt-able because they have non-financial “obligations” and are, therefore, not “industries.” This is simply uninformed. For example, Massively Open Online Courses, or MOOCs, are routinely derided for being a poor alternative to on-campus learning – and that’s the point. MOOCs are, so far, a cheaper, inferior substitute for on-campus learning – but they meet the needs of some people. Over time, they’ll get better and more expensive, and more people will use them. They are, definitionally, a disruptive innovation
  • Lepore weakens her argument by including a strange you-damn-kids-get-off-my-lawn paragraph about kids and their scooters and their jeans and their coffee machines – preferring, presumably, the cold professionalism of a sclerotic newsroom to a more comfortable working environment
  • Regardless of the virtues or vices of Lepore’s article, this interview with Clayton Christensen (author of The Innovator’s Dilemma and the man who has done the most for – and gained the most from – the theory) is really, really strange. Christensen, a professor at Harvard, is generally regarded as a pretty nice guy, but the interview is rambling, angry, and sees Christensen use the third person instead of the first
  • It was simply irresponsible journalism for Lepore to not interview Christensen for the article, as Christensen claims
  • Will Oremus wrote a very entertaining mini-rebuttal to Lepore’s article: “Lepore’s main point is that disruptive innovation isn’t all it’s cracked up to be. At least, that seemed to be her point up until the point where she started talking about journalism”

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