How to Identify Your Enemies before they Destroy You

Also from the November 2002 issue of the Harvard Business Review, a discussion of the process of disruptive innovation (The Innovator’s Dilemma by Clayton Christensen). The authors identify 6 stages in the process of disruptive innovations and common factors that make the stage more or less likely to succeed.

  1. Foothold Market Entry (optional): Can the insurgent gain a foothold (usually in the market below the main one)?
  2. Main Market Entry: Does the insurgent face high barriers to entering the main market?
  3. Customer attraction: How much value can the insurgent offer relative to the incumbent?
  4. Customer switching: How easily can customers switch from the incumbent to the insurgent?
  5. Incumbent retaliation: Does the incumbent have high barriers to retaliationg against the insurgent?
  6. Incumbent displacement: Does the innovation displace (as opposed to augment) incumbent products and revenues?

Entrepreneurs have been proclaiming their latest idea a disruptive innovation ever since Christensen’s book. It’s good to have a framework to measure their claims against.