Creative Destruction & The S-Curve
Schumpeter defined creative destruction as new combinations that build new industries by demolishing old ones. The entrepreneur is its agent; the manager's harness.
A taxonomy of innovation:
- Product vs process: a new thing to sell versus a new way to make it.
- Incremental vs radical: refining the engine versus replacing it with a motor.
Technology S-curves map a technique's life: slow early progress, explosive middle, maturity's plateau. The strategic moment is the crossover: the new curve passes the old plateau, and decades of advantage change sides. Sailing ships and film photography were improved brilliantly right up to irrelevance.
Disruptive Innovation & Lean Craft
Sustaining innovations improve what existing customers value (incumbents win). Disruptive innovations start worse on mainstream metrics but cheaper, take root in niches, and swallow the mainstream.
| Sustaining | Disruptive | |
|---|---|---|
| Starts | Better | Worse on mainstream |
| Beachhead | Existing market | Ignored niche |
| Won by | Incumbents | Entrants |
Entrepreneurship is opportunity pursuit beyond controlled resources. The lean startup cycle builds a minimal version, measures, learns, and pivots.
Corporate entrepreneurship uses ambidextrous structures to separate exploring units from the exploiting core. Common pitfall: Disruption looks laughable at first, which is why incumbents walk into the blade.