Clayton Christensen

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pages: 293 words: 78,439

Dual Transformation: How to Reposition Today's Business While Creating the Future by Scott D. Anthony, Mark W. Johnson

activist fund / activist shareholder / activist investor, additive manufacturing, Affordable Care Act / Obamacare, Airbnb, Amazon Web Services, autonomous vehicles, barriers to entry, Ben Horowitz, blockchain, business process, business process outsourcing, call centre, Clayton Christensen, cloud computing, commoditize, corporate governance, creative destruction, crowdsourcing, death of newspapers, disintermediation, disruptive innovation, distributed ledger, diversified portfolio, Internet of things, invention of hypertext, inventory management, Jeff Bezos, job automation, job satisfaction, Joseph Schumpeter, Kickstarter, late fees, Lean Startup, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Minecraft, obamacare, Parag Khanna, Paul Graham, peer-to-peer lending, pez dispenser, recommendation engine, self-driving car, shareholder value, side project, Silicon Valley, Skype, software as a service, software is eating the world, Steve Jobs, the market place, the scientific method, Thomas Kuhn: the structure of scientific revolutions, transfer pricing, uber lyft, Watson beat the top human players on Jeopardy!, Y Combinator, Zipcar

Chapter 3 describes how succeeding with transformation B requires three actions: identifying a historically constrained market that disruptive forces will open, iteratively developing a business model to win in that market, and acquiring or hiring complementary capabilities to compete successfully against new and emerging competitors. Xerox: The Capabilities Link Now for the C part of the equation, the capabilities link. In 1997, Innosight cofounder and Harvard Business School professor Clayton Christensen released The Innovator’s Dilemma, describing how well-run incumbents fail in the face of disruptive change. The capabilities link flips the dilemma. It allows a company to strike a balance wherein it leverages just enough capabilities to gain an advantage versus other competitors, but not so many capabilities that by definition its ability to do something new is constrained. Xerox did not perform unrelated diversification.

Driving Transformation A: Four Lessons The essence of transformation A is changing the how—finding more effective and efficient ways to address customer needs to maximize the resilience and relevance of your historical core business. At first blush, this kind of change sounds straightforward enough. After all, you don’t have to discover or demonstrate that you’re targeting a real market need. However, companies often find it painfully difficult to change how they operate. Clayton Christensen’s famous book The Innovator’s Dilemma contains numerous case examples of market leaders in industries, ranging from steel to accounting software, that struggled to respond when an entrant emerged with a disruptive way to solve an existing problem. As coauthor Mark Johnson details in his 2010 book Seizing the White Space, the core problem is that over time companies develop rules, norms, and metrics designed to perpetuate how they create, capture, and deliver value.

Although customers often struggle to describe what they want, they often are eloquent in explaining what they’re trying to accomplish, the reasons they pick one solution over another, their frustrations with existing solutions, and so on. More specifically, you need to do one of two things. Either conduct detailed research (if you do, we highly recommend reading Competing Against Luck, a 2016 book by Clayton Christensen, our colleague David Duncan, Taddy Hall, and Karen Dillon) or rely on the accumulated experience of your team to provide detailed answers to these five questions. Why have people historically bought from us? What do we provide that they really care about? What is the disruptive shift in our market? What used to matter to them but doesn’t really anymore? What do they wish we could do that we don’t?


pages: 207 words: 57,959

Little Bets: How Breakthrough Ideas Emerge From Small Discoveries by Peter Sims

Amazon Web Services, Black Swan, Clayton Christensen, complexity theory, David Heinemeier Hansson, deliberate practice, discovery of penicillin, endowment effect, fear of failure, Frank Gehry, Guggenheim Bilbao, Jeff Bezos, knowledge economy, lateral thinking, Lean Startup, longitudinal study, loss aversion, meta analysis, meta-analysis, PageRank, Richard Florida, Richard Thaler, Ruby on Rails, Silicon Valley, statistical model, Steve Ballmer, Steve Jobs, Steve Wozniak, theory of mind, Toyota Production System, urban planning, Wall-E

HP sixty year compounded annual growth rate reference from Barnholt discussion as well as from “Garage Gives Birth to Measurement Giant” by John Minck and Barry Manz, Microwaves & RF, August 2001. Faced with the need for large chunks of revenue growth, big bets are a mistake that corporate managers repeatedly make, consistent with the empirical findings in The Innovator’s Dilemma by Clayton Christensen, Collins Business (2003), and The Innovator’s Solution by Clayton Christensen and Michael Raynor, Harvard Business, 2003. Jim Collins presents similar insights in How the Mighty Fall, self-published (2009). “Achieving failures” reference taken from interview with Eric Ries. West Point education programs and evolution in military thinking and training: Interviews with Colonel Casey Haskins, Major Donald Vandergriff, and Brigadier General H.R.

As Gregersen wrapped up their findings: “You might summarize all of the skills we’ve noted in one word: ‘inquisitiveness.’” Dyer and Gregersen found that, like Yunus the anthropologist, exemplar innovators closely observed details, particularly about other people’s behaviors. “In observing others, they act like anthropologists and social scientists,” Dyer and Gregersen wrote in their Harvard Business Review study summary (coauthored with Harvard Business School Professor Clayton Christensen). The authors frequently cite Steve Jobs, who is well known around Silicon Valley for constantly studying the world for ideas. Leander Kahney, author of Inside Steve’s Brain, captures Jobs’ insatiable curiosity well. Jobs noticed the first graphical interface on a visit to Xerox’s PARC research center in 1979, which would later inform the Macintosh’s interface. Apple’s former CEO, John Scully, recalled Jobs returning from a trip to Sony in Japan with one of the first Walkmans: “Steve was fascinated by it, so the first thing he did was take it apart and look at every single part.

That book presents compelling research for why growth pressures cause executives to make big bets, and why they’re often a mistake. Collins, Jim. How the Mighty Fall. Jim Collins, 2009. In this book, Collins examines patterns companies tend to follow from success to decline and supports that general arc with rich case studies. The patterns Collins highlights closely resemble the patterns from psychology literature, as well as Clayton Christensen’s research in The Innovator’s Solution. Collins’s stages of organizational decline and case studies, such as the risk of big bets, are very insightful. Collins, Jim and Jerry Porras. Built to Last. New York: HarperCollins, 1997. Jim Collins, who would later write Good to Great, was a professor at Stanford Business School with Professor Jerry Porras when they wrote this book. It is one of my favorite business books, presenting not necessarily new ideas, but keen insights on the types of corporate culture that last over the long term.


pages: 374 words: 89,725

A More Beautiful Question: The Power of Inquiry to Spark Breakthrough Ideas by Warren Berger

Airbnb, carbon footprint, Clayton Christensen, clean water, disruptive innovation, fear of failure, Google X / Alphabet X, Isaac Newton, Jeff Bezos, jimmy wales, Joi Ito, Kickstarter, late fees, Lean Startup, Mark Zuckerberg, minimum viable product, new economy, Paul Graham, Peter Thiel, Ray Kurzweil, self-driving car, sharing economy, side project, Silicon Valley, Silicon Valley startup, Stanford marshmallow experiment, Stephen Hawking, Steve Jobs, Steven Levy, Thomas L Friedman, Toyota Production System, Watson beat the top human players on Jeopardy!, Y Combinator, Zipcar

If the question muscle has atrophied by junior high, imagine its condition by the time a student goes to college. Indeed, Rothstein’s downward-sloping question-asking chart continues to plummet right through the college years. University professors I interviewed confirmed a dearth of student questions, even among bright Ivy Leaguers. “For twenty years I’ve been teaching at the Harvard Business School,” professor Clayton Christensen told me. “And I love this place, but the intuition to ask questions, the curiosity, is much less than twenty years ago.” As to the cause: “If all you do as you’re growing up is watch stuff on a screen—or go to school, where they give you the answers—then you don’t develop the instinct for asking questions,” Christensen said. “They don’t know how to ask because it’s never been asked of them.”

40 In studying “master questioners,” Hal Gregersen inquired about their childhoods and found that most had “at least one adult in their lives who encouraged them to ask provocative questions.” The Nobel laureate scientist Isidor Isaac Rabi was one such child; when he came home from school, “while other mothers asked their kids ‘Did you learn anything today?’ [my mother ] would say, ‘Izzy, did you ask a good question today?’” Clayton Christensen thinks parents can help their kids be more inquisitive by posing what if questions “that invite children to think deeply about the world around them.” But Christensen thinks it’s also important to encourage kids to solve problems in a hands-on way, via challenging household tasks and chores. That worked for IDEO cofounder David Kelley. His career as a problem-solving designer was forged in a childhood home where “if the washing machine broke, you went and tried to make a new part to fix it.”

(And by the way—what business are we really in?) What if our company didn’t exist? What if we could become a cause and not just a company? How can we make a better experiment? If we brainstorm in questions, will lightning strike? Will anyone follow a leader who embraces uncertainty? Should mission statements be mission questions? How might we create a culture of inquiry? Why do smart businesspeople screw up? Clayton Christensen is today considered one of the foremost experts on business innovation. A veteran professor at the Harvard Business School, Christensen introduced the term disruptive innovation1 into the business lexicon two decades ago, and it has become both a cliché and a driving force in business ever since. His ideas have been embraced by the likes of Intel leader Andy Grove and Apple cofounder Steve Jobs.


pages: 742 words: 137,937

The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard Susskind, Daniel Susskind

23andMe, 3D printing, additive manufacturing, AI winter, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, Atul Gawande, Automated Insights, autonomous vehicles, Big bang: deregulation of the City of London, big data - Walmart - Pop Tarts, Bill Joy: nanobots, business process, business process outsourcing, Cass Sunstein, Checklist Manifesto, Clapham omnibus, Clayton Christensen, clean water, cloud computing, commoditize, computer age, Computer Numeric Control, computer vision, conceptual framework, corporate governance, creative destruction, crowdsourcing, Daniel Kahneman / Amos Tversky, death of newspapers, disintermediation, Douglas Hofstadter, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, full employment, future of work, Google Glasses, Google X / Alphabet X, Hacker Ethic, industrial robot, informal economy, information retrieval, interchangeable parts, Internet of things, Isaac Newton, James Hargreaves, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, knowledge economy, lifelogging, lump of labour, Marshall McLuhan, Metcalfe’s law, Narrative Science, natural language processing, Network effects, optical character recognition, Paul Samuelson, personalized medicine, pre–internet, Ray Kurzweil, Richard Feynman, Second Machine Age, self-driving car, semantic web, Shoshana Zuboff, Skype, social web, speech recognition, spinning jenny, strong AI, supply-chain management, telepresence, The Future of Employment, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, transaction costs, Turing test, Watson beat the top human players on Jeopardy!, WikiLeaks, young professional

Zola et al. (2000). 3 W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy (2005). 4 Clayton Christensen, The Innovator’s Dilemma (1997). 5 Paul Geroski and Constantinos Markides, Fast Second (2005). 6 Philip Augar, The Death of Gentlemanly Capitalism: The Rise and Fall of London’s Investment Banks (2008). 7 Richard Susskind, Tomorrow’s Lawyers (2013), 19–22. 8 This is an updated version of the distinction between ‘automation’ and ‘innovation’ in Richard Susskind, The Future of Law (1996), 49–50. 9 Richard Susskind, Tomorrow’s Lawyers, The End of Lawyers? (2010), and The Future of Law. 10 See Clayton Christensen, The Innovator’s Dilemma (1997), and Jill Lepore, ‘The Disruption Machine’, New Yorker, 23 June 2014. 11 See e.g. Clayton Christensen and Henry Eyring, The Innovative University (2011). 12 Joseph Schumpeter describes the process of ‘creative destruction’ in Capitalism, Socialism and Democracy (1994), foreshadowing this contemporary literature.

McKenna, The World’s Newest Profession: Management Consulting in the Twentieth Century (2010). 226 Sophie Christie, ‘Tesco Clubcard vs Nectar: Best loyalty schemes’, Telegraph, 30 Aug. 2013 <http://www.telegraph.co.uk> (accessed 8 March 2015). 227 Walter Kiechel, The Lords of Strategy: The Secret Intellectual History of the New Corporate World (2010), 65. 228 See ‘Q1 2014 Revenue up 2.3 percent Crossed the 50,000 Employee Threshold in India’, CapGemini Newsroom, 29 April 2014 <http://www.capgemini.com/investor/press/q1-2014-revenue-up-23-crossed-the-50000-employee-threshold-in-india> (accessed 8 March 2015); Mini Joseph Tejaswi, ‘Accenture to hire aggressively in India’, Times of India, 18 July 2012 <www.timesofindia.indiatimes.com> (accessed 8 March 2015). 229 Clayton Christensen, Dina Wang, and Derek van Bever, ‘Consulting on the Cusp of Disruption’, Harvard Business Review, Oct. 2013 <https://hbr.org> (accessed 8 March 2015). 230 <http://www.deloittemanagedanalytics.com> (accessed 8 March 2015). 231 Clayton Christensen, Dina Wang, and Derek van Bever, ‘Consulting on the Cusp of Disruption’, Harvard Business Review, Oct. 2013 <https://hbr.org> (accessed 8 March 2015). 232 <http://www.behaviouralinsights.co.uk>. 233 Hal R. Varian, ‘Computer Mediated Transactions’, American Economic Review, 100: 2 (2010), 1–10. 234 <http://glg.it>, <http://www.guidepointglobal.com> (accessed 8 March 2015). 235 <http://www.edenmccallum.com>, <http://www.businesstalentgroup.com>, <http://www.castprofessionals.com> (accessed 8 March 2015). 236 <http://www.10eqs.com> (accessed 8 March 2015). 237 <http://www.expert360.com>, <http://www.skillbridge.co>, <http://vumero.com> (accessed 8 March 2015). 238 <http://www.executiveboard.com> (accessed 8 March 2015). 239 ‘Become an Analyst’, Wikistrat <http://www.wikistrat.com/become-an-analyst/> (accessed 8 March 2015). 240 <http://www.kaggle.com> (accessed 8 March 2015). 241 Derrick Harris, ‘Has Ayasdi turned machine learning into a magic bullet?’

In 2014 Associated Press started to use algorithms developed by Automated Insights to computerize the production of several hundred formerly handcrafted earnings reports, producing fifteen times as many as before.218 Forbes now provides similarly for earnings reports and sport, using algorithms developed by Narrative Science.219 The Los Angeles Times uses an algorithm called ‘Quakebot’ (which is currently followed by 95,600 people on Twitter) to monitor the US Geological Survey for earthquake alerts, and automatically to compose articles if an event takes place.220 Users can struggle to tell the difference.221 2.6. Management consulting In 2013 Clayton Christensen claimed, in a Harvard Business Review article, ‘Consulting on the Cusp of Disruption’, that change was ‘inevitable’ in consulting, and that those who had traditionally helped others in management difficulties were themselves ‘being upended’.222 Duff McDonald concluded his book The Firm with the observation that consulting was more ‘hotly contested than it has ever been’.223 Lucy Kellaway suggested in the Financial Times that, ‘fifty years hence, McKinsey won’t exist’.224 Christopher McKenna called the industry ‘the world’s newest profession’, whose status as a profession is ambiguous, and whose future remains uncertain.225 As Christensen notes, the consulting business model has changed little in the past 100 years.


pages: 292 words: 85,151

Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, and Cheaper Than Yours (And What to Do About It) by Salim Ismail, Yuri van Geest

23andMe, 3D printing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Baxter: Rethink Robotics, Ben Horowitz, bioinformatics, bitcoin, Black Swan, blockchain, Burning Man, business intelligence, business process, call centre, chief data officer, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, cognitive bias, collaborative consumption, collaborative economy, commoditize, corporate social responsibility, cross-subsidies, crowdsourcing, cryptocurrency, dark matter, Dean Kamen, dematerialisation, discounted cash flows, disruptive innovation, distributed ledger, Edward Snowden, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, game design, Google Glasses, Google Hangouts, Google X / Alphabet X, gravity well, hiring and firing, Hyperloop, industrial robot, Innovator's Dilemma, intangible asset, Internet of things, Iridium satellite, Isaac Newton, Jeff Bezos, Joi Ito, Kevin Kelly, Kickstarter, knowledge worker, Kodak vs Instagram, Law of Accelerating Returns, Lean Startup, life extension, lifelogging, loose coupling, loss aversion, low earth orbit, Lyft, Marc Andreessen, Mark Zuckerberg, market design, means of production, minimum viable product, natural language processing, Netflix Prize, NetJets, Network effects, new economy, Oculus Rift, offshore financial centre, PageRank, pattern recognition, Paul Graham, paypal mafia, peer-to-peer, peer-to-peer model, Peter H. Diamandis: Planetary Resources, Peter Thiel, prediction markets, profit motive, publish or perish, Ray Kurzweil, recommendation engine, RFID, ride hailing / ride sharing, risk tolerance, Ronald Coase, Second Machine Age, self-driving car, sharing economy, Silicon Valley, skunkworks, Skype, smart contracts, Snapchat, social software, software is eating the world, speech recognition, stealth mode startup, Stephen Hawking, Steve Jobs, subscription business, supply-chain management, TaskRabbit, telepresence, telepresence robot, Tony Hsieh, transaction costs, Travis Kalanick, Tyler Cowen: Great Stagnation, uber lyft, urban planning, WikiLeaks, winner-take-all economy, X Prize, Y Combinator, zero-sum game

We first identified the ExO paradigm as a weak signal in 2009, and noticed over a two-year period that several new organizations were following a specific model. In 2011, futurist Paul Saffo suggested to Salim that he write this book, and we have been seriously researching the ExO model for the last three years. To do so, we: Reviewed sixty classic innovation management books by such authors as John Hagel, Clayton Christensen, Eric Ries, Gary Hamel, Jim Collins, W. Chan Kim, Reid Hoffman and Michael Cusumano. Interviewed C-Level executives from several dozen Fortune 200 companies with our survey and frameworks. Interviewed or researched ninety top entrepreneurs and visionaries including Marc Andreessen, Steve Forbes, Chris Anderson, Michael Milken, Paul Saffo, Philip Rosedale, Arianna Huffington, Tim O’Reilly and Steve Jurvetson.

They haven’t the tools, the attitude or the perspective to do so. What they will do, and what they are built to do, is to keep getting bigger in order to take advantage of economies of scale. Scale—but linear scale—is the raison d’être of the linear organization. John Seely Brown calls this “scalable efficiency” and maintains that it is the paradigm that drives most corporate strategy and corporate architectures. Clayton Christensen immortalized this type of thinking in his business classic, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fall. Most large organizations use what is called a matrix structure. Product management, marketing and sales are often aligned vertically, and support functions such as legal, HR, finance and IT are usually horizontal. So the person handling legal for a product has two reporting lines, one to the head of product, who has revenue accountability, and the other to the head of legal, whose job it is to ensure consistency across numerous products.

Thus, the newspapers that have survived have largely shifted their revenue efforts to their web pages; the albums and CDs of the music industry have atomized to the selectable singles world of MP3 files; and many of today’s bestsellers enjoy most of their profits from e-book sales. Note that today there is a whole category of the media industry—named for the underlying physical media it’s been trying to sell—which is actually made up of information businesses that have now been digitized. We believe the television industry will be the next to fall to the information ax. 3. Disruption is the New Norm In his influential bestseller The Innovator’s Dilemma, Clayton Christensen points out that disruptive innovation rarely comes from the status quo. That is, established industry players are rarely structured or prepared to counter disruption when eventually it appears. The newspaper industry is a perfect example: it sat by for a decade as Craigslist systematically disrupted the classified advertising model. Today, the outsider has all the advantages. With no legacy systems to worry about, as well as the ability to enjoy low overhead and take advantage of the democratization of information and—more important—technology, the newcomer can move quickly and with a minimum of expense.


pages: 827 words: 239,762

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite by Duff McDonald

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Albert Einstein, barriers to entry, Bayesian statistics, Bernie Madoff, Bob Noyce, Bonfire of the Vanities, business cycle, business process, butterfly effect, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, corporate raider, corporate social responsibility, creative destruction, deskilling, discounted cash flows, disintermediation, disruptive innovation, Donald Trump, family office, financial innovation, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global pandemic, Gordon Gekko, hiring and firing, income inequality, invisible hand, Jeff Bezos, job-hopping, John von Neumann, Joseph Schumpeter, Kenneth Arrow, Kickstarter, London Whale, Long Term Capital Management, market fundamentalism, Menlo Park, new economy, obamacare, oil shock, pattern recognition, performance metric, Peter Thiel, plutocrats, Plutocrats, profit maximization, profit motive, pushing on a string, Ralph Nader, Ralph Waldo Emerson, RAND corporation, random walk, rent-seeking, Ronald Coase, Ronald Reagan, Sam Altman, Sand Hill Road, Saturday Night Live, shareholder value, Silicon Valley, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, survivorship bias, The Nature of the Firm, the scientific method, Thorstein Veblen, union organizing, urban renewal, Vilfredo Pareto, War on Poverty, William Shockley: the traitorous eight, women in the workforce, Y Combinator

As Jerry Useem suggested in a New York Times article, “Business School, Disrupted,” that question resulted in HBS facing what was, in effect, a choice between the ideas of its two most prominent faculty members—Michael Porter and Clayton Christensen. While a number of its closest competitors, including Wharton and Stanford, had begun offering free so-called massive open online courses, or MOOCs, with the goal of reaching as many people as possible, there were questions about whether doing so posed risks to brands that had taken decades to develop. And so, the choice: Were HBS to hew to the ideas of Michael Porter, the mandates of distinctive positioning that underlie much of his work would argue not just for a fee, but a substantial one. On the other hand, were it to hew to the ideas of Clayton Christensen, the mandates of disruption that underlie much of his work would argue for making it cheap and for responding quickly.

They’re conservative by nature, Company Men at heart, and that constrains their ability to truly lead in times of change. “Certain things about modern corporate society are unseemly and suboptimal,” says Gerald, “but HBS could play a role in determining the remedy. We need them to, as the only ones who can really untangle these knots are the ones in power.” He then proposes another way to look at it: “HBS professor Clayton Christensen talks about resources, priorities, and processes. The resources are there. But what about the processes people go through from day one at HBS until they graduate? How are they designed? Intention can have huge effects. As for priorities, we need only look at the people they celebrate and recognize. So what are HBS’s priorities?” As the nation’s most prominent—and largest—business school for the last century, HBS has shaped—and continues to shape—the direction not just of its graduates’ lives, but also those of the organizations they work for and the economy itself.

She certainly had a resume for the gig. A Harvard MBA (’88) and Baker Scholar, Wetlaufer had worked as a reporter at the Miami Herald and the Associated Press, as well as a consultant at Bain & Company. It seemed, for a time, as if they’d finally landed on a keeper. The magazine increased its frequency to ten times a year, cast a wider net for stories, and made some great hires. One notable piece: In 2000, Clayton Christensen and Michael Overdorf’s article, “Meeting the Challenge of Disruptive Change,” thrust Christensen’s theory of disruption into the national conversation. But Wetlaufer’s personal life was unraveling. Married with four children when she joined HBR in 1996, she and her husband divorced in June 2000. After that, it seems, she got lost in the same kind of ethical fog that descends on people involved with HBS all too often.


pages: 460 words: 131,579

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse by Adrian Wooldridge

affirmative action, barriers to entry, Black Swan, blood diamonds, borderless world, business climate, business cycle, business intelligence, business process, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collaborative consumption, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate social responsibility, creative destruction, credit crunch, crowdsourcing, David Brooks, David Ricardo: comparative advantage, disintermediation, disruptive innovation, don't be evil, Donald Trump, Edward Glaeser, Exxon Valdez, financial deregulation, Frederick Winslow Taylor, future of work, George Gilder, global supply chain, industrial cluster, intangible asset, job satisfaction, job-hopping, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kickstarter, knowledge economy, knowledge worker, lake wobegon effect, Long Term Capital Management, low skilled workers, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Naomi Klein, Netflix Prize, Network effects, new economy, Nick Leeson, Norman Macrae, patent troll, Ponzi scheme, popular capitalism, post-industrial society, profit motive, purchasing power parity, Ralph Nader, recommendation engine, Richard Florida, Richard Thaler, risk tolerance, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steven Levy, supply-chain management, technoutopianism, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Hsieh, too big to fail, wealth creators, women in the workforce, young professional, Zipcar

A generation of student radicals wore Che Guevara T-shirts and chanted “Ho, Ho, Ho Chi Minh” at any passing university dean. These days the third world is known as the emerging markets, the Che Guevara T-shirts are made in China, and the wretched of the earth are enjoying growth rates that are the envy of the former colonial powers. Moreover, these emerging markets are likely to shake things up not only in their own backyards but in rich countries, too. Clayton Christensen has coined the term “disruptive innovation” for new products that slash prices and new processes that radically change the way they are made and delivered. Today, many of the most disruptive innovations hail from emerging markets. They will make a bigger difference to life in the West than lean production, the previous great disruptive management innovation from the East. There are four reasons why things will move faster and further this time.

(McKinsey estimates that the achievement gap in education between low-performing states and the rest costs the country up to $700 billion a year, or 5 percent of GDP.5) Why do some nurses spend only 40 percent of their time with patients? People who are armed with these facts will put constant pressure on public services to explain and improve. The second idea goes under the very ungentlemanly name of disruptive innovation. Clayton Christensen made his reputation looking at the way disruptive innovators have reconfigured markets and boosted productivity in the private sector. More recently, he has devoted a lot of his energy to the public sector, most provocatively to education. In Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns, he argues that the education system was designed for a world where most students go on to do repetitive jobs and where teachers were confronted by large classes and confined by the technology of “chalk and talk.”6 But the information revolution is about to disrupt this model: the arrival of ever cheaper and ever more powerful computers is making it possible to customize courses for the needs of individual students.

The Seven Habits rubs shoulders in bookshops with books with titles like Unleash the Thinner You and How to Get Rich Without Getting Out of Bed. The master’s lectures are packed with sad-sack people who are looking for a quick fix for their multiplying problems. But Covey is also a paid-up member of the management theory club, with an MBA from Harvard Business School and glowing endorsements from serious thinkers such as Warren Bennis and Clayton Christensen. He claims that one of his biggest inspirations was Peter Drucker, who insisted that “effectiveness is a habit” and provided him one of his seven habits, “first things first,” which, for reasons that are never explained, is number three in his list. FranklinCovey claims that 90 percent of Fortune 500 and 70 percent of Fortune 1000 companies are clients. Covey’s life work is an odd mixture of the banal and the serious.


pages: 361 words: 81,068

The Internet Is Not the Answer by Andrew Keen

"Robert Solow", 3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, augmented reality, Bay Area Rapid Transit, Berlin Wall, bitcoin, Black Swan, Bob Geldof, Burning Man, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, David Brooks, disintermediation, disruptive innovation, Donald Davies, Downton Abbey, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, full employment, future of work, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joi Ito, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Metcalfe’s law, move fast and break things, move fast and break things, Nate Silver, Nelson Mandela, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Panopticon Jeremy Bentham, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, plutocrats, Plutocrats, Potemkin village, precariat, pre–internet, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Robert Metcalfe, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, TaskRabbit, Ted Nelson, telemarketer, The Future of Employment, the medium is the message, the new new thing, Thomas L Friedman, Travis Kalanick, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, urban planning, Vannevar Bush, Whole Earth Catalog, WikiLeaks, winner-take-all economy, working poor, Y Combinator

And certainly the Kodak tragedy can be seen, at least in part, as a parable of a once-mighty monopolist, a Google of the industrial age, that couldn’t adapt to the digital revolution. Yes, Kodak failed to become a leader in digital photography, in spite of the fact that the company actually invented the digital camera, back in 1975.54 Yes, Kodak is, in part, a victim of what Harvard Business School professor Clayton Christensen calls, in his influential 2011 book about why businesses fail, The Innovator’s Dilemma,55 the challenge of a once-dominant incumbent having to disrupt its own business model. Yes, a string of myopic executives failed to reinvent Kodak, with the result that a great company that up until the 1990s was often listed among the world’s top five most valuable brands56 has now become synonymous with failure.

Welcome to what Joshua Cooper Ramo, the former executive editor of Time magazine, calls “the age of the unthinkable.” It’s a networked age, Ramo says, in which “conformity to old ideas is lethal”58 and predictability and linearity have been replaced by what he calls an “epidemic” of self-organization where no central leadership is required. This is an age so destructively unthinkable, in fact, that Clayton Christensen’s theory of the “Innovator’s Dilemma,” which suggests an orderly cycle of disruptors, each replacing the previous economic incumbent, now has itself been blown up by an even more disruptive theory of early-twenty-first-century digital capitalism. Christensen’s ideas have themselves been reinvented by the bestselling business writers Larry Downes and Paul F. Nunes, who’ve replaced the “Innovator’s Dilemma” with the much bleaker “Innovator’s Disaster.”

I also got lucky in early 2010 when I recieved a call from my friend Keith Teare, Mike Arrington’s cofounder at TechCrunch, who was setting up the TechCrunchTV network. Keith recommended me to Paul Carr and Jon Orlin at TechCrunchTV, and my show Keen On . . . was the first program on the network, running for four years and including over two hundred interviews with leading Internet thinkers and critics. In particular, I’d like to thank Kurt Andersen, John Borthwick, Stewart Brand, Po Bronson, Erik Brynjolfsson, Nicholas Carr, Clayton Christensen, Ron Conway, Tyler Cowen, Kenneth Cukier, Larry Downes, Tim Draper, Esther Dyson, George Dyson, Walter Isaacson, Tim Ferriss, Michael Fertik, Ze Frank, David Frigstad, James Gleick, Seth Godin, Peter Hirshberg, Reid Hoffman, Ryan Holiday, Brad Horowitz, Jeff Jarvis, Kevin Kelly, David Kirkpatrick, Ray Kurzweil, Jaron Lanier, Robert Levine, Steven Levy, Viktor Mayer-Schönberger, Andrew McAfee, Gavin Newsom, George Packer, Eli Pariser, Andrew Rasiej, Douglas Rushkoff, Chris Schroeder, Tiffany Shlain, Robert Scoble, Dov Seidman, Gary Shapiro, Clay Shirky, Micah Sifry, Martin Sorrell, Tom Standage, Bruce Sterling, Brad Stone, Clive Thompson, Sherry Turkle, Fred Turner, Yossi Vardi, Hans Vestberg, Vivek Wadhwa, and Steve Wozniak for appearing on Keen On . . . and sharing their valuable ideas with me.


How Will You Measure Your Life? by Christensen, Clayton M., Dillon, Karen, Allworth, James

air freight, Clayton Christensen, disruptive innovation, hiring and firing, invisible hand, Iridium satellite, job satisfaction, late fees, Mahatma Gandhi, Nick Leeson, Silicon Valley, Skype, Steve Jobs, working poor, young professional

We and our children have now studied individually and collectively the movies that the theories in this book have given to us. It is quite stunning to see how accurately the plot in these movies has predicted the results from the actions that we have chosen. I am grateful beyond words for their courage in making the choices that have brought us such happiness. I dedicate this book to them—and hope that the thoughts in this book will help you, as they have helped us. —Clayton Christensen I MUST CONFESS: if you’d told me three years ago, just before I was to embark on an adventure to business school in a faraway land, that I was going to come out the other side as the coauthor of a book … well, I almost certainly would not have believed you. If you had told me that it was going to be a book based upon applying some of the most rigorous business theories in the world to finding happiness and fulfillment in life … well, in that case, I might have even laughed.

Thanks for having the trust in us to pick this up and listen to what we have to say. We have poured our hearts into this in the hope that we might be able to help you, and that would have been in vain were you not so generous to give us a chance to do so. I truly, truly hope that you’re able to get as much out of these pages as I did in helping to craft them. —James Allworth MEETING CLAYTON CHRISTENSEN changed my life. In the spring of 2010, as the editor of Harvard Business Review magazine, I had been casting around for an article that would add a little extra something to our summer 2010 double issue. I realized that the students about to graduate from Harvard Business School that spring had applied to business school when the economy was still rosy and everything seemed possible—but they were now graduating into a world of uncertainty.

I resigned from Harvard Business Review in the spring of 2011 with the good wishes of my colleagues and have spent the months since then balancing writing this book with Clay and James and being truly present in the moments of my own life—and more important, in the lives of my husband and daughters. I haven’t regretted a single decision I’ve made since the day I first left Clay’s office. It’s been an honor to work with my coauthors, Clay and James, on this book. This book is a reflection of many, many hours of discussion and debate among the three of us. I consider myself lucky to have had the invaluable benefit of a private tutorial in the theories of Clayton Christensen. But more important, I consider myself privileged to have had the chance to collaborate with a man who is brilliant, kind, and generous not some of the time, not much of the time, but all of the time. And James. I couldn’t possibly have imagined the journey we’d go on together when we first spoke back in the spring of 2010. Working with you forced me to raise my game in every possible way.


pages: 94 words: 26,453

The End of Nice: How to Be Human in a World Run by Robots (Kindle Single) by Richard Newton

3D printing, Black Swan, British Empire, Buckminster Fuller, Clayton Christensen, crowdsourcing, deliberate practice, disruptive innovation, fear of failure, Filter Bubble, future of work, Google Glasses, Isaac Newton, James Dyson, Jaron Lanier, Jeff Bezos, job automation, lateral thinking, Lean Startup, low skilled workers, Mark Zuckerberg, move fast and break things, move fast and break things, Paul Erdős, Paul Graham, recommendation engine, rising living standards, Robert Shiller, Robert Shiller, Silicon Valley, Silicon Valley startup, skunkworks, social intelligence, Steve Ballmer, Steve Jobs, Y Combinator

“But there is also something predictable in the way the fear and apathy encountered at the beginning are accountable for the feelings of elation at the end. These intensities of the creative process can stimulate desires of consistency and control but history affirms that few transformative experiences are generated by regularity.” In organisations the great horror is failure. As the Harvard Professor, Clayton Christensen’s dissection of the Innovator’s Dilemma showed, safe and incremental thinking leads businesses to conspire in their own demise. The bigger a business becomes the more powerfully its culture presses down on riskier decisions and disruptive thinking. The message “Don’t screw up a good thing”, breathes through the air-conditioned corridors, from the walls, the logo, the share options and the annual bonus.

Increasingly, he began to realise, every major website was showing him only what it thought he liked, hoping to increase their appeal. And they were doing it invisibly. Our past interests will determine what we are exposed to in the future, leaving less room for the unexpected encounters that spark creativity, innovation, and the democratic exchange of ideas. The chance of anti-order starts to get squeezed. There’s a similarity here with the limitations of traditional business school thinking that Clayton Christensen has warned about in his book The Innovator’s Dilemma. If we rely solely on past data to inform our future direction, then we will be like the giant enterprises who didn’t realise that at the fringes of their world disruptive innovators were planning to revolutionise and consume their markets. As Larry Page said: “Lots of companies don’t succeed over time. What do they fundamentally do wrong?


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The Participation Revolution: How to Ride the Waves of Change in a Terrifyingly Turbulent World by Neil Gibb

Airbnb, Albert Einstein, blockchain, Buckminster Fuller, call centre, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, corporate social responsibility, creative destruction, crowdsourcing, disruptive innovation, Donald Trump, gig economy, iterative process, job automation, Joseph Schumpeter, Khan Academy, Kibera, Kodak vs Instagram, Mark Zuckerberg, Menlo Park, Minecraft, Network effects, new economy, performance metric, ride hailing / ride sharing, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, the scientific method, Thomas Kuhn: the structure of scientific revolutions, trade route, urban renewal

Indonesia played a critical part in the social and economic transformation of the Renaissance, as the Dutch colonised it and made it the centre of the world’s coffee production. For more than 300 years, bar four years of British rule, Indonesia was run by the Dutch. Today, though, apart from a few canals and old buildings, there is very little left behind. It was an extractive process, designed to make the merchants who were trading the coffee rich. In 1995, Clayton Christensen, a professor at the Harvard Business School, introduced the term “disruptive innovation” in his book The Innovator’s Dilemma. As the twin forces of digital technology and globalisation have shaken up and disrupted just about every aspect of our lives in the 21st century, disruptive innovation has become the rallying cry of a generation. Disruption, we are told, is the source of breakthroughs, transformation, and spectacular success.

It should have been able to knock out something like Instagram as a side project. With its size and resources, it would have been a piffling investment. The reason it didn’t, though, was because it had become obsessed with what it did rather than why it did it. It had become preoccupied with getting people to consume more of its products rather than why they actually wanted to take photographs. In 1995, Clayton Christensen, a professor at the Harvard Business School, introduced the term “disruptive innovation” in his book The Innovator’s Dilemma. What Christensen was referring to in his book’s title was how, at certain points in history, the emergence of new and radical technologies has totally disrupted established business models and businesses – in some cases, completely sweeping them away. Exactly what happened to Kodak.

By relaxing the need to control, and letting everyone get on with delivering on the social mission, surly staff become passionate participants, actively engaged. Toxic cultures become creative, healthy, and highly productive environments in which everyone thrives. We are at the beginning of what is perhaps the greatest period of social and technological change there has ever been, and the disruptive side effects Clayton Christensen predicted are everywhere to be seen – from once-safe businesses and business models to political systems and cultures. Nothing will be untouched. We all have a choice. We can try and hold on to and maintain social, political, and business mind-sets that no longer work. Or we can model and join the participatory innovators who are successfully reshaping the world. As we leave Tabung Haji, I ask Ravi how he feels about his investment.


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Essentialism: The Disciplined Pursuit of Less by Greg McKeown

Albert Einstein, Clayton Christensen, Daniel Kahneman / Amos Tversky, deliberate practice, double helix, en.wikipedia.org, endowment effect, Isaac Newton, iterative process, Jeff Bezos, Lao Tzu, lateral thinking, loss aversion, low cost airline, Mahatma Gandhi, microcredit, minimum viable product, Nelson Mandela, North Sea oil, Peter Thiel, Ralph Waldo Emerson, Richard Thaler, Rosa Parks, Shai Danziger, side project, Silicon Valley, Silicon Valley startup, sovereign wealth fund, Stanford prison experiment, Steve Jobs, Vilfredo Pareto

But what most people don’t realize is that the problem is not just that the boundaries have been blurred; it’s that the boundary of work has edged insidiously into family territory. It is hard to imagine executives in most companies who would be comfortable with employees bringing their children to work on Monday morning, yet they seem to have no problem expecting their employees to come into the office or to work on a project on a Saturday or Sunday. Clayton Christensen, the Harvard business professor and author of The Innovator’s Dilemma, was once asked to make just such a sacrifice. At the time, he was working at a management consulting firm, and one of the partners came to him and told him he needed to come in on Saturday to help work on a project. Clay simply responded: “Oh, I am so sorry. I have made the commitment that every Saturday is a day to be with my wife and children.”

We all have some people in our lives who tend to be higher maintenance for us than others. These are the people who make their problem our problem. They distract us from our purpose. They care only about their own agendas, and if we let them they prevent us from making our highest level of contribution by siphoning our time and energy off to activities that are essential to them, rather than those that are essential to us. So how do we take a page from Jin-Yung and Clayton Christensen and set the kinds of boundaries that will protect us from other people’s agendas? Below are several guidelines for your consideration. DON’T ROB PEOPLE OF THEIR PROBLEMS I am not saying we should never help people. We should serve, and love, and make a difference in the lives of others, of course. But when people make their problem our problem, we aren’t helping them; we’re enabling them.

I wrote about this subject further in a blog post for Harvard Business Review called “The One Thing CEOs Need to Learn from Apple,” April 30, 2012 6. King, third foreword to Ibid., xix. 7. Alan D. Williams, “What Is an Editor?” in Editors on Editing: What Writers Need to Know About What Editors Do, 3rd rev. ed., ed. Gerald Gross (New York: Grove Press, 1993), 6. 14. LIMIT 1. Some minor details changed. 2. Based on a talk Clayton Christensen gave to students at the Stanford Law School in 2013 3. Henry Cloud and John Townsend, Boundaries: When to Say Yes, How to Say No (Grand Rapids, MI: Zondervan, 1992), 29–30. 4. I have found this story cited in several places: for example, Jill Rigby’s Raising Respectful Children in an Unrespectful World (New York: Simon & Schuster, 2006), ch. 6. But I have yet to find an original source for the story and therefore share this only as an anecdote. 15.


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Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin

affirmative action, asset allocation, Atul Gawande, availability heuristic, Benoit Mandelbrot, Bernie Madoff, Black Swan, butter production in bangladesh, Cass Sunstein, choice architecture, Clayton Christensen, cognitive dissonance, collateralized debt obligation, Daniel Kahneman / Amos Tversky, deliberate practice, disruptive innovation, Edward Thorp, experimental economics, financial innovation, framing effect, fundamental attribution error, Geoffrey West, Santa Fe Institute, George Akerlof, hindsight bias, hiring and firing, information asymmetry, libertarian paternalism, Long Term Capital Management, loose coupling, loss aversion, mandelbrot fractal, Menlo Park, meta analysis, meta-analysis, money market fund, Murray Gell-Mann, Netflix Prize, pattern recognition, Philip Mirowski, placebo effect, Ponzi scheme, prediction markets, presumed consent, Richard Thaler, Robert Shiller, Robert Shiller, statistical model, Steven Pinker, The Wisdom of Crowds, ultimatum game

In particular, Bill Miller and Kyle Legg provided me with the needed flexibility to take on this challenge, and I hope that I can repay their confidence in full. A number of people graciously shared their time and knowledge with me. They told me stories, clarified points, or aimed me in the right direction when I was off track. These include Orley Ashenfelter, Greg Berns, Angela Freymuth Caveney, Clayton Christensen, Katrina Firlik, Brian Roberson, Phil Rosenzweig, Jeff Severts, Thomas Thurston, and Duncan Watts. Getting ideas right is not always easy. I was privileged to have a small group, each a leader in his field, read and critique sections of the book. My thanks to Steven Crist, Scott Page, Tom Seeley, Stephen Stigler, Steve Strogatz, and David Weinberger. The Santa Fe Institute has been a tremendous source of learning and inspiration for me.

The Theory of Theory Building Whether or not they are aware of it, people ground their choices in theory—a belief that a certain action will lead to a satisfactory outcome. Most professionals are wary of the word theory because they associate it with something that is impractical. But if you define theory as an explanation of cause and effect, it is eminently practical. Sound theory helps to predict how certain decisions lead to outcomes across a range of circumstances. Paul Carlile and Clayton Christensen, both professors of management, describe the process of theory building in three stages.6 • The first stage is observation, which includes carefully measuring a phenomenon and documenting the results. The goal is to set common standards so that subsequent researchers can agree on the subject and the terms to describe it. • The second stage is classification, where researchers simplify and organize the world into categories to clarify differences among phenomena.

Steeped in the theory of disruptive innovation, which is based on circumstances, Thurston reviewed almost fifty business plans that Intel’s new business initiatives group had funded. Applying the theory that specifies when innovations succeed, he was able to predict, without knowledge of the outcomes, a statistically significant 85 percent of successes and failures.19 Further, he was able to identify where some of the failed businesses had gone wrong. Thurston then teamed up with Clayton Christensen to teach the theory to business school students. Their first pass at sorting the winners and losers was close to random, but by the end of the semester the students sorted with over 80 percent accuracy. The progress shows the theory’s value and that the students can learn the lessons and improve performance. 2. Watch for the correlation-and-causality trap. People have an innate desire to link cause and effect and are not beyond making up a cause for the effects they see.


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The Wide Lens: What Successful Innovators See That Others Miss by Ron Adner

barriers to entry, call centre, Clayton Christensen, inventory management, iterative process, Jeff Bezos, Lean Startup, M-Pesa, minimum viable product, mobile money, new economy, RAND corporation, RFID, smart grid, smart meter, spectrum auction, Steve Ballmer, Steve Jobs, Steven Levy, supply-chain management, Tim Cook: Apple, transaction costs

I am deeply grateful for their contributions, direct and indirect, to my own understanding and to this undertaking. In writing the book I have benefited tremendously from the support, advice, and critical feedback of a host of individuals who gave generously of both their time and their insight: Howard Anderson, Julia Batavia, Diane E. Bilotta, Manish Bhandari, Adam Brandenburger, Colin Blaydon, Michael Brimm, Clayton Christensen, Sarah Cliffe, Rudi Coetzee, Dr. Richard J. Comi, Donald Conway, Richard D’Aveni, Yves Doz, Gregg Fairbrothers, Javier Gimeno, Ronny Golan, Vijay Govindarajan, Lars Guldbaek Karlsen, Morten Hansen, Peter Hanson, Hal Hogan, Natalie Horbachevsky, Bob Howell, Barak Hershkovitz, Chris Huston, Chan Kim, Jim Komsa, Kim LaFontana, Karim R. Lakhani, Raphael La Porta, Dan Levinthal, Julien Lévy, Donna McMahon, Halli Melnitsky, Ashok G.

These values are consistent with more recent surveys as reviewed, for example, in Robert G. Cooper’s Winning at New Products: Creating Value Through Innovation (New York: Basic Books, 2011). 5 72 percent of senior executives: Boston Consulting Group report, “Innovation 2010.” 5 two schools of thought: All great management books consider multiple facets of the problem but focus on different aspects. Insightful exemplars within the customer-focus school are Clayton Christensen’s The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997); W. Chan Kim and Renée Mauborgne’s Blue Ocean Strategy (Boston: Harvard Business School Press, 2004); Geoffrey Moore’s Crossing the Chasm (New York: HarperBusiness, 1991); George Day’s Market Driven Strategy: Processes for Creating Value (New York: Free Press, 1999); and J.

,” EW.com, May 7, 2001, http://www.ew.com/ew/article/0,108459,00.xhtml. 70 came together to form Digital Cinema Initiatives: Digital Cinema Initiatives LLC, 2011, www.dcimovies.com. 71 “if we left it up to the exhibitor”: Carl DiOrio, “Studios Near D-Day,” Variety, March 25, 2002. 71 “a little longer than people had expected”: Carl DiOrio, “D-Cinema Systems on Hold As Studios Set Standards,” Variety, February 3, 2003. 71 theater owners were unwilling: MKPE Consulting, “Digital Cinema Business.” 72 “have their act together this year, or it’ll fall apart”: David Lieberman, “Digital Film Revolution Poised to Start Rolling,” USA Today, May 18, 2005. 72 “The proportion of financing”: Eric Taub, “Questions of Cost Greet New Digital Projectors,” International Herald Tribune, June 2, 2004. 72 whatever form the financing plan took, it must be industry-wide: Gabriel Snyder, “NATO Takes Digital Stand,” Variety, November 22, 2004. 73 80 percent of the exhibitor’s conversion costs: “The VPF Model,” Arts Alliance Media, http://www.artsalliancemedia.com/vpf/. 74 James Cameron’s 3-D record-breaking sci-fi megahit: Brandon Gray, “‘Avatar’ Claims Highest Gross of All Time,” BoxOffice Mojo.com, February 3, 2010. 74 Toy Story 3 became 2010’s top-grossing picture: David Twiddy, “Theaters Will Add Dimension with Digital Systems Upgrade,” Kansas City Business Journal, March 28, 2010. 74 38 percent of U.S. screens: David Hancock, “Digital Screen Numbers and Forecasts to 2015 Are Finalised,” Screen Digest, January 26, 2011. 74 The costs of digital preservation: A fascinating discussion can be found in The Digital Dilemma: Strategic Issues in Archiving and Accessing Digital Motion Picture Materials, Science and Technology Council of the Academy of Motion Picture Arts and Sciences, 2007. [ CHAPTER 4 ] 84 value chains and supply chains: Classic books on value chains include Michael Porter’s Competitive Advantage (New York: Free Press, 1998) and Charles Fine’s Clockspeed (New York: Perseus Books, 1998). Adam Brandenburger and Barry Nalebuff introduce the role of complementors in Co-opetition (New York: Currency, 1996), and Clayton Christensen discusses the roles of value networks in affecting innovation incentives in The Innovator’s Dilemma (Boston: Harvard Business School Press, 1997). The value blueprint builds on these perspectives, with a focus on designing the most effective configuration to deliver the value proposition. 88 $550 device: “Sony Shows Data Discman,” New York Times, September 13, 1991. 88 The Rocket, developed by NuvoMedia: Martin Arnold, “From Gutenberg to Cyberstories,” New York Times, January 7, 1999. 88 That same year the SoftBook: Peter Lewis, “Taking on New Forms, Electronic Books Turn a Page,” New York Times, July 2, 1998. 88 Gemstar released two models: Ken Feinstein, “RCA REB1100 eBook Review,” CNET.com, February 21, 2001, http://reviews.cnet.com/e-book-readers/rca-reb1100-ebook/4505-3508_7-4744438.xhtml. 89 proof that the electronic book was ready for the mainstream: Doreen Carvajal, “Long Line Online for Stephen King E-Novella,” New York Times, March 16, 2000. 90 Random House’s e-book revenues doubled: Nicholas Bogaty, “eBooks by the Numbers: Open eBook Forum Compiles Industry Growth Stats,” International Digital Publishing Forum, press release, July 22, 2002, http://old.idpf.org/pressroom/pressreleases/ebookstats.htm. 90 “difficult to find, buy and read e-books”: Steven Levy, “The Future of Reading,” Newsweek, November 26, 2007. 90 Paltry content and intense digital rights management: Ginny Parker Woods, “Sony Cracks Open New Book with Reader,” Toronto Star, February 20, 2006. 90 “We’ve been very cautious in launching [the Reader]”: Michael Kanellos, “Sony’s Brave Sir Howard,” CNET.com, January 17, 2007, http://news.cnet.com/Sonys-brave-Sir-Howard/2008-1041_3-6150661.xhtml. 90 almost 20 percent cheaper than the Librié: Sony Librié ebook Review, eReaderGuide.Info, www.ereaderguide.info/sony_librie_ebook_reader_review.htm. 90 10,000 titles available at Connect.com: Edward Baig, “Sony Device Gets E-Book Smart,” USA Today, October 5, 2006. 91 the iPod of the book industry: David Derbyshire, “Electronic BookOpens New Chapter for Readers,” Daily Telegraph, September 28, 2006. 91 much fanfare from the press: Amanda Andrews, “Sony’s Hitting the Books,” Australian, February 28, 2006. 92 lowering publisher confidence: George Cole, “Will the eBook Finally Replace Paper?


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The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries

3D printing, barriers to entry, call centre, Clayton Christensen, clean water, cloud computing, commoditize, Computer Numeric Control, continuous integration, corporate governance, disruptive innovation, experimental subject, Frederick Winslow Taylor, Lean Startup, Marc Andreessen, Mark Zuckerberg, Metcalfe’s law, minimum viable product, Mitch Kapor, Network effects, payday loans, Peter Thiel, pets.com, Ponzi scheme, pull request, risk tolerance, selection bias, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, stealth mode startup, Steve Jobs, the scientific method, Toyota Production System, transaction costs

Pivots are a permanent fact of life for any growing business. Even after a company achieves initial success, it must continue to pivot. Those familiar with the technology life cycle ideas of theorists such as Geoffrey Moore know certain later-stage pivots by the names he has given them: the Chasm, the Tornado, the Bowling Alley. Readers of the disruptive innovation literature spearheaded by Harvard’s Clayton Christensen will be familiar with established companies that fail to pivot when they should. The critical skill for managers today is to match those theories to their present situation so that they apply the right advice at the right time. Modern managers cannot have escaped the deluge of recent books calling on them to adapt, change, reinvent, or upend their existing businesses. Many of the works in this category are long on exhortations and short on specifics.

For an up-to-date listing of Lean Startup meetups or to find one near you, see http://​lean-​startup.​meetup.​com or the Lean Startup Wiki: http://​leanstartup.​pbworks.​com/​Meetups. See also Chapter 14, “Join the Movement.” Chapter 1. Start 1. Manufacturing statistics and analysis are drawn from the blog Five Thirty Eight: http://​www.​fivethirtyeight.​com/​2010/​02/​us-​manufacturing-​is-​not-​dead.​html Chapter 2. Define 1. The Innovator’s Dilemma is a classic text by Clayton Christensen about the difficulty established companies have with disruptive innovation. Along with its sequel, The Innovator’s Solution, it lays out specific suggestions for how established companies can create autonomous divisions to pursue startup-like innovation. These specific structural prerequisites are discussed in detail in Chapter 12. 2. For more about SnapTax, see http://​blog.​turbotax.​intuit.​com/​turbotax-​press-​releases/​taxes-​on-​your-​mobile-​phone-​it%E2%80%99s-​a-snap/​01142011​–4865 and http://​mobilized.​allthingsd.​com/​20110204/​exclusive-​intuit-​sees-​more-​than-​350000-​downloads-​for-​snaptax-​its-​smartphone-​tax-​filing-​app/ 3.

For more, see http://​platformsandnetworks.​blogspot.​com/​2011/​01/​launching-​tech-​ventures-​part-​i-​course.​html 8. http://​www.​robgo.​org/​post/​568227990/​product-​leadership-​series-​user-​driven-​design-​at 9. http://​venturebeat.​com/​2010/​02/​11/​confirmed-​google-​buys-​social-​search-​engine-​aardvark-​for-​50-​million/ 10. This is the heart of the Innovator’s Dilemma by Clayton Christensen. 11. For more, see http://bit.ly/DontLaunch Chapter 7. Measure 1. By contrast, Google’s main competitor Overture (eventually bought by Yahoo) had a minimum account size of $50, which deterred us from signing up, as it was too expensive. 2. For more details about Farb’s entrepreneurial journey, see this Mixergy interview: http://​mixergy.​com/​farbood-​nivi-​grockit-​interview/ Chapter 8.


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More Than You Know: Finding Financial Wisdom in Unconventional Places (Updated and Expanded) by Michael J. Mauboussin

Albert Einstein, Andrei Shleifer, Atul Gawande, availability heuristic, beat the dealer, Benoit Mandelbrot, Black Swan, Brownian motion, butter production in bangladesh, buy and hold, capital asset pricing model, Clayton Christensen, clockwork universe, complexity theory, corporate governance, creative destruction, Daniel Kahneman / Amos Tversky, deliberate practice, demographic transition, discounted cash flows, disruptive innovation, diversification, diversified portfolio, dogs of the Dow, Drosophila, Edward Thorp, en.wikipedia.org, equity premium, Eugene Fama: efficient market hypothesis, fixed income, framing effect, functional fixedness, hindsight bias, hiring and firing, Howard Rheingold, index fund, information asymmetry, intangible asset, invisible hand, Isaac Newton, Jeff Bezos, Kenneth Arrow, Laplace demon, Long Term Capital Management, loss aversion, mandelbrot fractal, margin call, market bubble, Menlo Park, mental accounting, Milgram experiment, Murray Gell-Mann, Nash equilibrium, new economy, Paul Samuelson, Pierre-Simon Laplace, quantitative trading / quantitative finance, random walk, Richard Florida, Richard Thaler, Robert Shiller, Robert Shiller, shareholder value, statistical model, Steven Pinker, stocks for the long run, survivorship bias, The Wisdom of Crowds, transaction costs, traveling salesman, value at risk, wealth creators, women in the workforce, zero-sum game

Bill has done both, and for that he deserves all of the admiration he receives. Both Al and Bill have always been gracious with their time, and have taught me with patience. They are great role models, and I feel privileged to be associated with both of them. These essays draw from the work of many fabulous scientists, too many to list individually. But a handful of thinkers deserve special mention, including Clayton Christensen, Paul DePodesta, Norman Johnson, Scott Page, Jim Surowiecki, and Duncan Watts. Thanks to each of you for sharing your ideas with me so generously. Steve Waite’s suggestions were also of great benefit to me. I’d like to thank Myles Thompson, my publisher and editor at Columbia University Press, for his boundless enthusiasm and unwavering belief in the power of these ideas. Assistant editor Marina Petrova has also been an immense help in all aspects of the project.

We can say the same about much of management theory.4 More specifically, investors generally dwell on attribute-based categorizations (like low multiples) versus circumstance-based categorizations. A shift from attribute- to circumstance-based thinking can be of great help to investors and managers. Take a lesson from the slime mold. The Three Steps of Theory Building In a thought-provoking paper, Clayton Christensen, Paul Carlile, and David Sundahl break the process of theory building into three stages (see exhibit 4.1). I discuss each of these stages and provide some perspective on how this general theory-building process applies specifically to investing:1. Describe what you want to understand in words and numbers. In this stage, the goal is to carefully observe, describe, and measure a phenomenon to be sure that subsequent researchers can agree on the subject.

EXHIBIT 36.3 Average Annual Growth Rate for Companies Entering the Fortune 50 Source: Reprinted with permission from Corporate Strategy Board, “Stall Points,” 15. Copyright 1998 AAAS. Advising companies what to do in the face of slowing growth is an industry in and of itself. It is true that large companies have a difficult time innovating as successfully as smaller companies for a host of reasons. I enthusiastically recommend a book by Clayton Christensen and Michael Raynor, The Innovator’s Solution, which provides managers with a useful innovation framework. But the truth is that not all companies can grow rapidly forever. Extrapolative Expectations A review of the evidence on firm size and growth rates suggests that investors should temper their growth expectations as companies get larger. But the reality is that investors tend to extrapolate from the recent past and hence miss declining growth rates.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

The commoditization of operating systems, databases, web servers and browsers, and related software was indeed threatening to Microsoft’s core business. But that destruction created the opportunity for the killer applications of the Internet era. It is worth remembering this history when contemplating the effect of on-demand services like Uber, self-driving cars, and artificial intelligence. I found that Clayton Christensen, the author of The Innovator’s Dilemma and The Innovator’s Solution, had developed a framework that explained what I was observing. In a 2004 article in Harvard Business Review, he articulated “the law of conservation of attractive profits” as follows: “When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage.”

Intel, of course, was the company that, along with Microsoft, had captured a monopoly position in the personal computer market, such that every PC bore the sticker INTEL INSIDE. Intel had done this by becoming the sole source for the processor, the brain of the PC. Microsoft had done it by controlling access to its software operating system. Open source software and the open communications protocols of the Internet had changed the game for Microsoft and Intel. But my map told me that the game didn’t end there. Per Clayton Christensen’s Law of Conservation of Attractive Profits, I knew that something else was going to become valuable. In a word: data. In particular, I thought that building a critical mass of user-contributed data led to self-reinforcing network effects. The term network effect generally refers to systems that gain in utility the more people use them. A single telephone is not very useful, but once enough people have them, it is very hard not to join the network.

Meanwhile, the declining cost of anything made by machines would argue that the work that humans alone can do should become more rather than less valuable. The remainder of this chapter will discuss some ways in which that future is and is not unfolding. The chorus of doubt about the jobless future sounds remarkably similar to the one that warned of the death of the software industry due to open source software. Clayton Christensen’s Law of Conservation of Attractive Profits holds true here too. When one thing becomes commoditized, something else becomes valuable. We must ask ourselves what will become valuable as today’s tasks become commoditized. CARING AND SHARING What might we do with our time, if there were a universal basic income sufficient to meet the necessities of life, or if paid working hours were reduced by the same amount as domestic labor, and wages increased?


pages: 161 words: 44,488

The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology by William Mougayar

Airbnb, airport security, Albert Einstein, altcoin, Amazon Web Services, bitcoin, Black Swan, blockchain, business process, centralized clearinghouse, Clayton Christensen, cloud computing, cryptocurrency, disintermediation, distributed ledger, Edward Snowden, en.wikipedia.org, Ethereum, ethereum blockchain, fault tolerance, fiat currency, fixed income, global value chain, Innovator's Dilemma, Internet of things, Kevin Kelly, Kickstarter, market clearing, Network effects, new economy, peer-to-peer, peer-to-peer lending, prediction markets, pull request, QR code, ride hailing / ride sharing, Satoshi Nakamoto, sharing economy, smart contracts, social web, software as a service, too big to fail, Turing complete, web application

Just as we continued to scale the Internet 30 years after its invention, we will continue to solve and update the blockchain’s scalability needs. Just as we continued to update automobile safety regulations in ways that were unforeseen during the invention moment, we will continue to update the regulatory requirements around the blockchain over the lifetime of its evolution. NOTES 1. A term popularized in Clayton Christensen’s book (The Innovator’s Dilemma) suggesting that successful companies can put too much emphasis on customers’ current needs, and fail to adopt new technology or business models, https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma. List of U.S. executive branch czars, https://en.wikipedia.org/wiki/List_of_U.S._executive_branch_czars. 2. Source: Author’s sample survey of market leaders, April 2016. 3.

Source: Author’s sample survey of market leaders, April 2016. 3. Java, https://en.wikipedia.org/wiki/Java_%28programming_language%29. 4. IDC Study, http://www.infoq.com/news/2014/01/IDC-software-developers. 5. These are popular programming languages. 6. https://cryptoconsortium.org/ 4 BLOCKCHAIN IN FINANCIAL SERVICES “The worst place to develop a new business model is from within your existing business model.” –CLAYTON CHRISTENSEN FINANCIAL SERVICES INSTITUTIONS will be challenged by how much they are willing to bend their business models to accommodate the weight of the blockchain. Their default position will be to only slightly open the door, expecting to let as many benefits seep in, with the least amount of opening. The challengers (mostly startups) will try to kick that door open as much as possible, expecting to throw the incumbents off balance.


pages: 532 words: 139,706

Googled: The End of the World as We Know It by Ken Auletta

23andMe, AltaVista, Anne Wojcicki, Apple's 1984 Super Bowl advert, Ben Horowitz, bioinformatics, Burning Man, carbon footprint, citizen journalism, Clayton Christensen, cloud computing, Colonization of Mars, commoditize, corporate social responsibility, creative destruction, death of newspapers, disintermediation, don't be evil, facts on the ground, Firefox, Frank Gehry, Google Earth, hypertext link, Innovator's Dilemma, Internet Archive, invention of the telephone, Jeff Bezos, jimmy wales, John Markoff, Kevin Kelly, knowledge worker, Long Term Capital Management, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Network effects, new economy, Nicholas Carr, PageRank, Paul Buchheit, Peter Thiel, Ralph Waldo Emerson, Richard Feynman, Sand Hill Road, Saturday Night Live, semantic web, sharing economy, Silicon Valley, Skype, slashdot, social graph, spectrum auction, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, strikebreaker, telemarketer, the scientific method, The Wisdom of Crowds, Upton Sinclair, X Prize, yield management, zero-sum game

Makes Official Complaint to China over Internet Censorship,” Financial Times, June 22, 2009. 331 “What Google should fear”: author interview with Yossi Vardi, February 28, 2008. 331 When Marissa Mayer said: author interview with Mayer, August 21, 2007. 331 “What separates us”: author interview with Stacey Savides Sullivan, August 21, 2007. 331 “are utopians”: author interview with Terry Winograd, September 25, 2007. 332 In the 1990s: an excellent exploration of long-term capital’s demise is contained in Roger Lowenstein’s When Genuis Failed: The Rise and Fall of f Long-Term Capital Management, Random House, 2000. 332 “’Google returned links”: Nat Ives, “Media Giants Want to Top Google Results,” Advertising Age, March 23, 2009. 333 when Eric Schmidt envisioned: Miguel Heft, “Google Ends Its Project for Selling Radio Ads,” New York Times, February 13, 2009. 333 “They have no experience”: author interview with Danny Sullivan, March 20, 2008. 333 “a great company”: author interview with Fred Wilson, January 22, 2008. 333 “Google is like that fourteen-year-old”: author interview with Strauss Zelnick, January 9, 2008. 334 Although Mary Meeker believes Google is a great company: author interview with Mary Meeker, January 23, 2009. 334 “There is nothing about their model”: author interview with Clayton Christensen, April 17, 2009. 335 “There is no end in sight”: author interview with Fred Wilson, January 22, 2008. 335 “to the falsehood that you can grow”: author interview with Clayton Christensen, April 17, 2009. INDEX About.com Abrams, Jonathan AdSense advertising formula Google charges mechanism of revenue sharing Advertising, traditional concerns about Google data collection methods versus Google methods Internet, impact on as marketing companies online ads, increase in outlook for future recession of 2008, impact on spending on ads, increase in Advertising by Google.

And now with wives, and a son born to Brin in early 2009 and Page expecting his first child in the fall of 2009, and with incomprehensible wealth and two huge airplanes more conveniently at their disposal—Brin and Page persuaded NASA to waive its prohibition on private planes parking or using the nearby NASA facility—both young men are in the office less, jumping on their planes to take photographs in Africa, to explore the wilds of Alaska; Page likes to tool around in his Tesla electric car or fly his own helicopter and Brin to spend time building his own kite-powered sailboat. Will their attention wander from Google? Today, Google appears impregnable. But a decade ago so did AOL, and so did the combination of AOL Time Warner. “There is nothing about their model that makes them invulnerable,” Clayton Christensen, Harvard business historian and author of the seminal The Innovators Dilemma, told me. “Think IBM. They had a 70 percent market share of mainframe computers. Then the government decided to challenge them. Then the PC emerged.” Seemingly overnight, computing moved from mainframes to PCs. For a long while, Microsoft seemed unstoppable, he said, only to be diverted by government intervention and the emergence of Linux and open-source software.

The close-up misses how Google has transformed how we gather and use information, given us the equivalent of a personal digital assistant, made government and business and other institutions more transparent, helped people connect, served as a model service provider and employer, made the complex simple, and become an exemplar of the oft-stated but rarely followed maxim, “Trust your customer.” Because it is free, Google will be difficult to assail. No one can predict with certainty where Google and the digital wave is heading, when it will crest, or who it will flatten. If the public or its representatives come to believe Google plays favorites, aims to monopolize knowledge or its customers, invades their privacy, or arrogantly succumbs, in the words of Clayton Christensen, “to the falsehood that you can grow and grow because of network effects,” then it will be more vulnerable. If Google maintains its deposit of public trust—continuing to put users first—and if it stays humble and moves with the swiftness of a fox, it will be difficult to catch. Other companies have profoundly disrupted the business landscape. Think of the Ford automobile or the Intel chip.


pages: 307 words: 90,634

Insane Mode: How Elon Musk's Tesla Sparked an Electric Revolution to End the Age of Oil by Hamish McKenzie

Airbnb, Albert Einstein, augmented reality, autonomous vehicles, barriers to entry, basic income, Bay Area Rapid Transit, Ben Horowitz, business climate, car-free, carbon footprint, Chris Urmson, Clayton Christensen, cleantech, Colonization of Mars, connected car, crony capitalism, Deng Xiaoping, disruptive innovation, Donald Trump, Elon Musk, Google Glasses, Hyperloop, Internet of things, Jeff Bezos, John Markoff, low earth orbit, Lyft, Marc Andreessen, margin call, Mark Zuckerberg, megacity, Menlo Park, Nikolai Kondratiev, oil shale / tar sands, paypal mafia, Peter Thiel, ride hailing / ride sharing, Ronald Reagan, self-driving car, Shenzhen was a fishing village, short selling, side project, Silicon Valley, Silicon Valley startup, Snapchat, South China Sea, special economic zone, stealth mode startup, Steve Jobs, Tesla Model S, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban planning, urban sprawl, Zipcar

“I think that if there’s a need for something to be disrupted and it’s important to the future of the world, then sure, we should disrupt it. But I don’t think that we should just disrupt things, unless that disruption is going to result in something fundamentally better for society.” The business world had come to fear the word disruption because of The Innovator’s Dilemma, a 1997 book by Harvard Business School professor Clayton Christensen that introduced the concept of “disruptive innovation.” The Innovator’s Dilemma, lauded by The Economist as one of the most important books about business ever written, lays out how market-leading companies can miss out on new waves of innovation by focusing on the needs of their existing customers to maximize profits while overlooking new and cheaper technologies or business models that customers didn’t realize they wanted.

Indeed, he and Straubel were probably there to convince utilities to work with Tesla on energy storage projects that could benefit both parties. But the industry’s fear that it might have been on the wrong side of history would not have dissipated completely. The same was true for at least one auto industry leader. The man who, until May 2017, was CEO of the Ford Motor Company is one person who does appear to be a fan of disruption. Mark Fields, a Harvard business grad and Clayton Christensen follower, was fifty-three when he was appointed to succeed outgoing CEO Alan Mulally. Fields had been the company’s chief operating officer since November 2012, and his ascent through the ranks had included leadership roles at Ford’s luxury autos group and Mazda when Ford owned the company in the early 2000s. In 2006, he was given the task of shaking up Ford’s corporate culture, which employees had described as “toxic,” “cliquish,” and “hierarchical.”

With that shift comes an opening for software-focused companies like Tesla. “In many cases, large car companies or truck companies are not focused on software, they’re not focused on sensors or batteries,” Straubel said in 2016. “And this gives an opportunity for innovation for new companies and new entrants to play on a bit more of a level playing field than there ever was in the past.” Tesla, however, is not a disrupter by Clayton Christensen’s original definition of the theory. In a December 2015 article published by the Harvard Business Review, Christensen and his coauthors, Michael Raynor and Rory McDonald, said Tesla didn’t fit the disruptive innovation model because its foothold was in the high-end segment of the auto market. Far from representing a marginal technology, Tesla’s entry to the market had elicited significant attention and investment from established competitors.


pages: 282 words: 88,320

Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry by David Robertson, Bill Breen

barriers to entry, business process, Clayton Christensen, creative destruction, crowdsourcing, Dean Kamen, disruptive innovation, financial independence, game design, global supply chain, Jeff Bezos, Kickstarter, Mark Zuckerberg, Minecraft, Rubik’s Cube, Silicon Valley, Steve Jobs, The Wisdom of Crowds, Wall-E

“They wanted to [replace] the minifig and put in this Jack Stone figure,” said Pedersen, who helped design Jack Stone. “We were told from the top that the minifig wasn’t considered cool.” The Jack Stone “minifigure” (right) and a classic LEGO minifigure. Unlike the classic minifigure, the Jack Stone figure could not be disassembled. Practice disruptive innovation. In his book The Innovator’s Dilemma, Harvard Business School professor Clayton Christensen introduced his theory of disruptive innovation, which he defined as a less pricey product or service, initially designed for less-demanding customers, which catches on and captures its market, displacing the incumbents.10 Christensen saw how low-quality, low-cost technologies were ramping up faster than ever before. Unburdened by the legacy costs and organizational inertia of more mature competitors, these new technologies quickly replaced established technologies and destroyed the incumbents’ core markets.

The third and final phase of “Shared Vision,” Knudstorp’s road map for transforming the business, set a goal of markedly increasing profits and market share, all in a bid to make LEGO “the world’s premier toy company.” That meant creating visionary toys that changed the way kids play. To build new growth drivers, LEGO would once again seek out untapped, blue-ocean markets. (We will trace that effort in the next chapter.) And it would attempt to unleash a disruptive innovation—a low-end, low-quality product that improves over time and eventually upends the industry incumbents. In a New Yorker profile, Clayton Christensen cited the pint-size transistor radio as a prototypical example of a big, disruptive innovation. Launched by Sony in the late 1950s, the tinny, tiny radios, using the then-new technology of the transistor, had nowhere near the same sound quality as the big vacuum-tube RCA and Zenith consoles found in many middle-class homes. But the radios’ easy portability and low price made them a hit with teenagers.

In 2012, the year LEGO shuttered Universe, Mojang—Minecraft’s parent company—earned $90 million on sales of $235 million. As 3-D printing improves, LEGO might one day find that Minecraft (or something like it) has jumped the digital divide to become a more compelling, richer, and easier way to construct plastic buildings, characters, and vehicles. As many disrupted companies have learned, what was low-end yesterday can be mainstream tomorrow. One of Clayton Christensen’s most counterintuitive arguments is that managers sometimes fail because they are smart, not because they are stupid. They abide by the same management strategies that have worked so successfully in the past. As a result, the disruptive effort goes wrong. Such was the case with the LEGO Group’s handling of Universe. The company’s management concluded that digital brick-based play experiences might one day overthrow physical brick-based play experiences.


pages: 372 words: 89,876

The Connected Company by Dave Gray, Thomas Vander Wal

A Pattern Language, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Atul Gawande, Berlin Wall, business cycle, business process, call centre, Clayton Christensen, commoditize, complexity theory, creative destruction, David Heinemeier Hansson, disruptive innovation, en.wikipedia.org, factory automation, Googley, index card, industrial cluster, interchangeable parts, inventory management, Jeff Bezos, John Markoff, Kevin Kelly, loose coupling, low cost airline, market design, minimum viable product, more computing power than Apollo, profit maximization, Richard Florida, Ruby on Rails, self-driving car, shareholder value, side project, Silicon Valley, skunkworks, software as a service, South of Market, San Francisco, Steve Jobs, Steven Levy, Stewart Brand, The Wealth of Nations by Adam Smith, Tony Hsieh, Toyota Production System, Vanguard fund, web application, WikiLeaks, Zipcar

I have also had the privilege to receive help and advice from true luminaries, such as Richard Saul Wurman, Saul Kaplan, Kevin Kelly, Jared Spool, Peter Vander Auwera, Dan Roam, Thor Muller, Paul Pangaro, Lane Becker, Peter Morville, Lou Rosenfeld, Nilofer Merchant, John Hagel III, JP Rangaswami, Doc Searls, Stowe Boyd, Jay Cross, Marcia Conner, Ben Cerveny, Chris Brogan, Bob Logan, David Armano, Alex Osterwalder, and Don Norman. Although I don’t know them personally, for the ideas in this book, I owe a deep debt of gratitude to the works of Gary Hamel, Clayton Christensen, Arie de Geus, Ricardo Semler, Eric Beinhocker, Daniel Pink, Richard Florida, Stewart Brand, Bill McKelvey, Stafford Beer, Herbert Simon, John Boyd, and perhaps most of all, Dr. W. Edwards Deming, many of whose groundbreaking ideas are only now being realized. For the access they provided to connected companies and their inner workings, I must thank Ray LaDriere, Kevin Kernan, Michael Bonamassa, Jerry Rudisin, Sunny Gupta, Adrian Cockcroft, Harry Max, Mary Walker, Mark Interrante, Ben Hart, Livia Labate, Sherri Maxson, and Sharif Renno.

While a company serves multiple purposes for different people, as an investment, a place of work, a paycheck, and so on, by far the most important purpose of a company is the job it does for customers. Companies that neglect or forget this fact have lost their way. Purpose Sets the Context for Organizations to Learn Cybernetics pioneer Stafford Beer said, “The purpose of a system is what it does.” The purpose of a company is what it does for customers. Clayton Christensen calls this “the job to be done.” He points out that while technologies and methods change over time, the job doesn’t change that much. For example, the service provided by FedEx—get something from here to there, as quickly as possible, with perfect certainty—is something Julius Caesar could have used. He also notes that while understanding and empathizing with customers can be helpful, it doesn’t have a causal relationship with buying behavior.

Human Sigma: Managing the Employee-Customer Encounter By John Fleming and Jim Asplund, Gallup Press, 2007. In the Plex: How Google Thinks, Works, and Shapes Our Lives By Steven Levy, Simon and Schuster, 2011. Information Rules: A Strategic Guide to the Network Economy By Carl Shapiro and Hal R. Varian, Harvard Business Review Press, 1998. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail By Clayton Christensen, Harvard Business Review Press, 1997. An Inquiry into the Nature and Causes of the Wealth of Nations By Adam Smith, 1776. Jack: Straight from the Gut By Jack Welch and John A. Byrne, Business Plus, 2001. Just in Time for Today and Tomorrow By Taiichi Ohno and Setsuo Mito, Productivity Press, 1988. The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation By Ikujiro Nonaka and Hirotaka Takeuchi, Oxford University Press, 1995.


pages: 164 words: 57,068

The Second Curve: Thoughts on Reinventing Society by Charles Handy

"Robert Solow", Airbnb, basic income, Bernie Madoff, bitcoin, bonus culture, British Empire, call centre, Clayton Christensen, corporate governance, delayed gratification, Diane Coyle, disruptive innovation, Edward Snowden, falling living standards, future of work, G4S, greed is good, informal economy, Internet of things, invisible hand, joint-stock company, joint-stock limited liability company, Kickstarter, Kodak vs Instagram, late capitalism, mass immigration, megacity, mittelstand, Occupy movement, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, Ronald Coase, shareholder value, sharing economy, Skype, Social Responsibility of Business Is to Increase Its Profits, Stanford marshmallow experiment, Steve Jobs, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Veblen good, Walter Mischel

Success, however, puts blinkers on us, discourages doubt, reinforces itself. Only in retrospect can we look back and say, ‘That was it, that was the peak, that was when we should have started to think anew.’ Unfortunately, being wise after the event is too late to be useful. First-curve success can blind one to the possibilities of a new technology or a new market, allowing others to seize the initiative. Clayton Christensen of Harvard Business School termed it the problem of disruptive innovation, citing, among many others, the case of Kodak, who ignored the possibilities of digital photography until it was too late. They allowed outsiders to intrude and, in my words, create the new curve instead of them. New technology is offering the chance of those new curves every day. Spotting them and seizing them is the new strategic challenge for education, health and government as well as business.

I can see that requiring MPs to vote by walking through those doors inherited from St Stephen’s Chapel not only means that they have to be present and counted, in person, but also acts as a reminder of why they are there, even if they sometimes don’t know what they are voting on, just following their herd. Some rituals, however, are just nostalgia and eventually become dysfunctional. Manual voting is now one of them. If we want people, particularly the young, to take democracy seriously we have to work with the new ways of communicating. Otherwise we risk going down Clayton Christensen’s technological mudslide on the road to Davy’s Bar. The Scottish referendum in 2014, with an 84 per cent turnout, showed that when it matters to them the voters will come out, come rain, hail or sunshine, but not all elections are so emotive or so compelling – witness the turnout for European elections. One unfortunate outcome of electronic voting might be an increase in popular referenda.


pages: 406 words: 105,602

The Startup Way: Making Entrepreneurship a Fundamental Discipline of Every Enterprise by Eric Ries

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, autonomous vehicles, barriers to entry, basic income, Ben Horowitz, Black-Scholes formula, call centre, centralized clearinghouse, Clayton Christensen, cognitive dissonance, connected car, corporate governance, DevOps, Elon Musk, en.wikipedia.org, fault tolerance, Frederick Winslow Taylor, global supply chain, index card, Jeff Bezos, Kickstarter, Lean Startup, loss aversion, Marc Andreessen, Mark Zuckerberg, means of production, minimum viable product, moral hazard, move fast and break things, move fast and break things, obamacare, peer-to-peer, place-making, rent-seeking, Richard Florida, Sam Altman, Sand Hill Road, secular stagnation, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, Steve Jobs, the scientific method, time value of money, Toyota Production System, Uber for X, universal basic income, web of trust, Y Combinator

MORE ADVANCE ACCLAIM FOR THE STARTUP WAY “My research has focused on what causes established companies to maintain success, and The Startup Way provides practical guidance on how to do just that.” —Clayton Christensen, author, entrepreneur, and Kim B. Clark Professor of Business Administration at Harvard Business School “To succeed in the Third Wave, an era where technology will disrupt everything from education to healthcare, companies will need new tools and approaches. Eric Ries provides a road map for companies on how to use entrepreneurial principles to achieve transformational growth.” —Steve Case, former chairman of AOL Time Warner and author of the New York Times bestseller The Third Wave “The Startup Way creates a vision and blueprint for a new form of management that combines entrepreneurial and general management skills and practices.

Even a startup with only ten customers has to start asking itself how much energy to invest in serving existing customers versus acquiring new ones. And the laws of corporate gravity still apply: The scarcity of resources most startups deal with argues for more, not less, financial discipline. Similarly, even the stodgiest product team will be doing some experimentation and some innovation, a point the author of The Innovator’s Dilemma, Clayton Christensen, has been trying to make for years. In most cases, good business practices will cause missed opportunities, because in order to serve existing customers well, companies don’t want to do anything too radical. The team may be trapped by this dilemma and unable to produce something truly disruptive, but it is engaged in “sustaining innovations” that may still be quite radical in their own way.3 THE FLOW OF IDEAS IN THE MODERN COMPANY Thus, every organizational unit is more properly understood as a portfolio that contains some mix of experimentation and execution.

One of the scourges of internal innovation teams is that existing divisions of the company want to impose “taxation without representation.” They often want control over the project (because they are afraid of negative consequences to the status quo), but they don’t want to provide funding for the project (because they would much rather invest in the short-term things that are working today). This combination gives rise to the problem outlined in Clayton Christensen’s The Innovator’s Dilemma. Innovation accounting suggests one possible way to solve that problem. Along with division- and function-level growth boards, which allocate funding and hold teams accountable within their existing structures, how about a corporate-level growth board that can fund and accelerate new startups that no existing division wants to fund. Create “M&A” and “IPO” analogs, just like an external startup.


pages: 229 words: 61,482

The Gig Economy: The Complete Guide to Getting Better Work, Taking More Time Off, and Financing the Life You Want by Diane Mulcahy

Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, basic income, Clayton Christensen, cognitive bias, collective bargaining, creative destruction, David Brooks, deliberate practice, diversification, diversified portfolio, fear of failure, financial independence, future of work, gig economy, helicopter parent, Home mortgage interest deduction, housing crisis, job satisfaction, Kickstarter, loss aversion, low skilled workers, Lyft, mass immigration, mental accounting, minimum wage unemployment, mortgage tax deduction, negative equity, passive income, Paul Graham, remote working, risk tolerance, Robert Shiller, Robert Shiller, Silicon Valley, Snapchat, TaskRabbit, Uber and Lyft, uber lyft, universal basic income, wage slave, Y Combinator, Zipcar

In his example, we might not be able to achieve work/life balance on a particular day, but if we extend the time frame to a month or to a year, we’re more likely to be successful. The same concept applies to achieving our version of success. Time horizons can help us better allocate all of our resources—our time, energy, attention, and money—to achieve our goals. We have to beware of our natural tendency to over-allocate our resources to short-term activities that offer immediate rewards instead of to our long-term goals and priorities. Clayton Christensen offers the most compelling illustration of the consequences of overinvesting in the short term. In his Harvard Business Review article “How Will You Measure Your Life?” he describes how, more than 30 years after graduation, many of his classmates have ended up “unhappy, divorced, and alienated from their children” even though none of them set out to do so. Too many of them spent too much time on short-term wins in the workplace and not enough time investing in the longer-term, harder-to-measure rewards on the home front.

Fitbit can measure the time we spend exercising and sleeping, RescueTime can monitor how we use our screen time, and Moment can tell us how much time we spend on our phones. The ability to quantify ourselves makes it easier than ever to track our daily time habits and identify the ones we want to change. Do You Allocate Enough Time to Larger, Longer-Term Rewards? Short-term wins are compelling because they offer instant gratification and a sense of accomplishment and progress. We discussed this tendency briefly in chapter 1 and used the Clayton Christensen “How Will You Measure Your Life?” article to illustrate it. In that article, Christensen’s classmates fell prey to this short-term bias by persistently overinvesting in immediate career “wins” and achievements at the expense of the longer-term reward of lasting and loving family relationships. This is a misallocation of time if we’re striving to build a meaningful and happy life, since relationships, not our careers, are what deliver those rewards.


pages: 380 words: 118,675

The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

airport security, Amazon Mechanical Turk, Amazon Web Services, bank run, Bernie Madoff, big-box store, Black Swan, book scanning, Brewster Kahle, buy and hold, call centre, centre right, Chuck Templeton: OpenTable:, Clayton Christensen, cloud computing, collapse of Lehman Brothers, crowdsourcing, cuban missile crisis, Danny Hillis, Douglas Hofstadter, Elon Musk, facts on the ground, game design, housing crisis, invention of movable type, inventory management, James Dyson, Jeff Bezos, John Markoff, Kevin Kelly, Kodak vs Instagram, late fees, loose coupling, low skilled workers, Maui Hawaii, Menlo Park, Network effects, new economy, optical character recognition, pets.com, Ponzi scheme, quantitative hedge fund, recommendation engine, Renaissance Technologies, RFID, Rodney Brooks, search inside the book, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, Skype, statistical arbitrage, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Thomas L Friedman, Tony Hsieh, Whole Earth Catalog, why are manhole covers round?, zero-sum game

Bezos was adamant that Kessel could not run both the physical and digital-media businesses at the same time. “If you are running both businesses you will never go after the digital opportunity with tenacity,” he said. By that time, Bezos and his executives had devoured and raptly discussed another book that would significantly affect the company’s strategy: The Innovator’s Dilemma, by Harvard professor Clayton Christensen. Christensen wrote that great companies fail not because they want to avoid disruptive change but because they are reluctant to embrace promising new markets that might undermine their traditional businesses and that do not appear to satisfy their short-term growth requirements. Sears, for example, failed to move from department stores to discount retailing; IBM couldn’t shift from mainframe to minicomputers.

Angry e-mails over the issue one day turned into a heated conversation in Bezos’s office. “We were both passionate and within five minutes we were both mad,” says Wilke, who later conceded that Bezos was right and the short-term pain had been worth it to build the Kindle franchise. Bezos won the argument, of course, but Wilke convinced him to at least make it clearer on the site that Amazon did not actually have any Kindles on hand. Just as Clayton Christensen had predicted in The Innovator’s Dilemma, technological innovation caused wrenching pain to the company and the broader industry. No one was feeling it more than the book publishers. Amazon had spent much of the last two years cajoling and threatening them to embrace its new digital format. But in all those conversations, the company had clearly withheld a crucial detail that Bezos divulged seventeen minutes into the forty-minute launch speech.

Chapter 8: Fiona 1 Calvin Reid, “Authors Guild Shoots Down Rocket eBook Contract,” Publishers Weekly, May 10, 1999. 2 Steve Silberman, “Ex Libris,” Wired, July 1998. 3 Steven Levy, “It’s Time to Turn the Last Page,” Newsweek, December 31, 1999. 4 Jane Spencer and Kara Scannell, “As Fraud Case Unravels, Executive Is at Large,” Wall Street Journal, April 25, 2007. 5 David Pogue, “Trying Again to Make Books Obsolete,” New York Times, October 12, 2006. 6 Jeff Bezos, speech at Lake Forest College, February 26, 1998. 7 Walt Mossberg, “The Way We Read,” Wall Street Journal, June 9, 2008. 8 Mark Leibovich, “Child Prodigy, Online Pioneer,” Washington Post, September 3, 2000. 9 Clayton Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business Review Press, 1997). 10 Jeff Bezos, interview by Charlie Rose, Charlie Rose, PBS, February 26, 2009. 11 David D. Kirkpatrick, “Online Sales of Used Books Draw Protest,” New York Times, April 10, 2002. 12 Graeme Neill, “Sony and Amazon in e-Books Battle,” Bookseller, April 27, 2007. 13 Brad Stone, “Envisioning the Next Chapter for Electronic Books,” New York Times, September 6, 2007. 14 Jeff Bezos, The Oprah Winfrey Show, ABC, October 24, 2008.


pages: 501 words: 114,888

The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives by Peter H. Diamandis, Steven Kotler

Ada Lovelace, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, augmented reality, autonomous vehicles, barriers to entry, bitcoin, blockchain, blood diamonds, Burning Man, call centre, cashless society, Charles Lindbergh, Clayton Christensen, clean water, cloud computing, Colonization of Mars, computer vision, creative destruction, crowdsourcing, cryptocurrency, Dean Kamen, delayed gratification, dematerialisation, digital twin, disruptive innovation, Edward Glaeser, Edward Lloyd's coffeehouse, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental economics, food miles, game design, Geoffrey West, Santa Fe Institute, gig economy, Google X / Alphabet X, gravity well, hive mind, housing crisis, Hyperloop, indoor plumbing, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the telegraph, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Kevin Kelly, Kickstarter, late fees, Law of Accelerating Returns, life extension, lifelogging, loss aversion, Lyft, M-Pesa, Mary Lou Jepsen, mass immigration, megacity, meta analysis, meta-analysis, microbiome, mobile money, multiplanetary species, Narrative Science, natural language processing, Network effects, new economy, New Urbanism, Oculus Rift, out of africa, packet switching, peer-to-peer lending, Peter H. Diamandis: Planetary Resources, Peter Thiel, QR code, RAND corporation, Ray Kurzweil, RFID, Richard Feynman, Richard Florida, ride hailing / ride sharing, risk tolerance, Satoshi Nakamoto, Second Machine Age, self-driving car, Silicon Valley, Skype, smart cities, smart contracts, smart grid, Snapchat, sovereign wealth fund, special economic zone, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Pinker, Stewart Brand, supercomputer in your pocket, supply-chain management, technoutopianism, Tesla Model S, Tim Cook: Apple, transaction costs, Uber and Lyft, uber lyft, unbanked and underbanked, underbanked, urban planning, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, X Prize

Early versions of this can be seen in the rise of “transformational festivals” like Burning Man, or fitness companies like CrossFit, where the experience is generally bad (you work out in old warehouses), but the transformation is great (the person you become after three months of working out in those warehouses). What all this tells us is that business as usual is becoming business unusual. And for existing companies, as Harvard’s Clayton Christensen explains, this is no longer optional: “Most [organizations] think the key to growth is developing new technologies and products. But often this is not so. To unlock the next wave of growth, companies must embed these innovations in a disruptive new business model.” And for those of us on the outside of these disruptive models, our experience will be better, cheaper, faster. Better meaning new business models do what all business models do—solve problems for people in the real world better than anyone else.

Converging Technology Moore’s Law: See: https://www.intel.com/content/www/us/en/silicon-innovations/moores-law-technology.html. as a human brain: Ray Kurzweil, How to Create a Mind (Viking, 2012), pp. 179–198. “Law of Accelerating Returns”: Ray Kurzweil, “The Law of Accelerating Returns,” March 7, 2001. See: https://www.kurzweilai.net/the-law-of-accelerating-returns. we use the term “disruptive innovation”: Clayton Christensen, The Innovator’s Dilemma (HarperBusiness, 2000), pp. 15–19. Enter distributed electric propulsion, or DEP for short: Mark Moore, “Distributed Electric Propulsion Aircraft,” Nasa Langley Research Center. See: https://aero.larc.nasa.gov/files/2012/11/Distributed-Electric-Propulsion-Aircraft.pdf. These electric engines are 95 percent: Technically, the full range is between 90 percent and 98 percent, but for a breakdown and comparison to a gas motor, see: Karim Nice and Jonathon Strickland, “Gasoline and Battery Power Efficiency,” How Stuff Works, https://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/fuel-cell4.htm.

See: https://archive.org/stream/DecentralizedAutonomousOrganizations/WhitePaper_djvu.txt. the multimillion-dollar economy: Maria Korolov, “Second Life GDP Totals $500 Million,” Hypergrid Business, November 11, 2015. See: https://www.hypergridbusiness.com/2015/11/second-life-gdp-totals-500-million/. The Experience Economy: Joseph Pine and James Gilmore, “Welcome to the Experience Economy,” Harvard Business Review, July-August 1998. Harvard’s Clayton Christensen: Mark Johnson, Reinvent Your Business Model (Harvard Business Press, 2018), back cover. Force #7: Longer Lives Ada Lovelace: Walter Isaacson, The Innovators (Simon & Schuster, 2014) pp. 7–33. the average caveperson hit puberty: For a great review of lifespan through history, see: https://ourworldindata.org/life-expectancy. cardiac disease and cancer: Author interview with Robert Hariri, MD, PhD, 2018.


pages: 204 words: 66,619

Think Like an Engineer: Use Systematic Thinking to Solve Everyday Challenges & Unlock the Inherent Values in Them by Mushtak Al-Atabi

3D printing, agricultural Revolution, Albert Einstein, Barry Marshall: ulcers, Black Swan, business climate, call centre, Clayton Christensen, clean water, cognitive bias, corporate social responsibility, dematerialisation, disruptive innovation, Elon Musk, follow your passion, global supply chain, happiness index / gross national happiness, invention of the wheel, iterative process, James Dyson, Kickstarter, knowledge economy, Lao Tzu, Lean Startup, On the Revolutions of the Heavenly Spheres, remote working, shareholder value, six sigma, Steve Jobs, Steven Pinker

Taking the smartphone market as an example, there was a time when the iPhone represented the high end of the market with other imitators satisfying the lower end of the market, selling cheaper but with a lower brand and performance offering. Currently the differentiation between various brands is becoming more difficult, and smartphones are almost becoming a commodity. Disruptive Innovation (Source: Innovator’s Dilemma, Clayton Christensen) Clayton Christensen in his book ‘The Innovator’s Dilemma’ presented an interesting theory of what he calls “disruptive innovation.” He explains how a new product, service, or company may drive existing prominent market players out of the market and conquer their market share. This happens by addressing market segments that are below the existing lower end of the market. An example of this is the budget airline that started not by competing with the established airlines, but rather by addressing a group of people that the established airlines never saw as customers.


pages: 238 words: 68,914

Where Does It Hurt?: An Entrepreneur's Guide to Fixing Health Care by Jonathan Bush, Stephen Baker

Affordable Care Act / Obamacare, Atul Gawande, barriers to entry, Clayton Christensen, commoditize, informal economy, inventory management, job automation, knowledge economy, lifelogging, obamacare, personalized medicine, ride hailing / ride sharing, Ronald Reagan, Silicon Valley, Steve Jobs, web application, women in the workforce, working poor

I love to listen to Jonathan talk: His narratives come a mile per minute. His illustrations and metaphors help me envision the problems and their solutions clearly. And he is very, very funny. You will be able to hear Jonathan’s voice as you read this book. It is an easy, insightful, and entertaining read. Jonathan, thank you for writing this book—for what it says and how you say it. Clayton Christensen, Harvard Business School JANUARY 2014 INTRODUCTION It’s a steamy summer night in New Orleans in 1990. I’m twenty-one years old and gunning an ambulance down Bienville Avenue, toward Charity Hospital. My uncle is president of the United States and my cousin will take over the same job in a decade. Big things are expected of me. But I’ve always had trouble succeeding along traditional Bush family lines.

In fact, they can change the world. The entrepreneurs in the audience probably didn’t find this message flattering. But I’m convinced that in health care technology, primitive is where the opportunities lie, and that simple, affordable systems will give birth to the disruption we’re aching for. I didn’t speak too much in my rustic getup. Instead I introduced one of my favorite professors from Harvard Business School, Clayton Christensen, who drove home the point much more eloquently than I did with my pike and loincloth. Clay towered before the gathering, all six foot eight of him. A few years ago, he told us, he had suffered a stroke. It affected the part of his brain that governed speech. So he had to relearn English. He spoke to us a bit more slowly than he used to, choosing his words with care. But this deliberate style made his message resonate even more powerfully.


Deep Work: Rules for Focused Success in a Distracted World by Cal Newport

8-hour work day, Albert Einstein, barriers to entry, business climate, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, David Brooks, David Heinemeier Hansson, deliberate practice, disruptive innovation, Donald Knuth, Donald Trump, Downton Abbey, en.wikipedia.org, Erik Brynjolfsson, experimental subject, follow your passion, Frank Gehry, informal economy, information retrieval, Internet Archive, Jaron Lanier, knowledge worker, Mark Zuckerberg, Marshall McLuhan, Merlin Mann, Nate Silver, new economy, Nicholas Carr, popular electronics, remote working, Richard Feynman, Ruby on Rails, Silicon Valley, Silicon Valley startup, Snapchat, statistical model, the medium is the message, Watson beat the top human players on Jeopardy!, web application, winner-take-all economy, zero-sum game

When it comes to deep work, in other words, consider the use of collaboration when appropriate, as it can push your results to a new level. At the same time, don’t lionize this quest for interaction and positive randomness to the point where it crowds out the unbroken concentration ultimately required to wring something useful out of the swirl of ideas all around us. Execute Like a Business The story has become lore in the world of business consulting. In the mid-1990s, Harvard Business School professor Clayton Christensen received a call from Andy Grove, the CEO and chairman of Intel. Grove had encountered Christensen’s research on disruptive innovation and asked him to fly out to California to discuss the theory’s implications for Intel. On arrival, Christensen walked through the basics of disruption: entrenched companies are often unexpectedly dethroned by start-ups that begin with cheap offerings at the low end of the market, but then, over time, improve their cheap products just enough to begin to steal high-end market share.

A nice summary history of the invention of the transistor can be found in “Transistorized!” at PBS’s website: http://www.pbs.org/transistor/album1/. A more detailed history can be found in Chapter 7 of Walter Isaacson’s 2014 book, The Innovators. New York: Simon and Schuster. Execute Like a Business “How do I do this?”: from pages xix–xx of McChesney, Chris, Sean Covey, and Jim Huling. The 4 Disciplines of Execution. New York: Simon and Schuster, 2004. Clayton Christensen also talks more about his experience with Andy Grove in a July–August 2010 Harvard Business Review article, “How Will You Measure Your Life?” that he later expanded into a book of the same name: http://hbr.org/2010/07/how-will-you-measure-your-life/ar/1. “The more you try to do”: from page 10 of McChesney, Covey, and Huling, The 4 Disciplines of Execution. “If you want to win the war for attention”: Brooks, David.


pages: 284 words: 79,265

The Half-Life of Facts: Why Everything We Know Has an Expiration Date by Samuel Arbesman

Albert Einstein, Alfred Russel Wallace, Amazon Mechanical Turk, Andrew Wiles, bioinformatics, British Empire, Cesare Marchetti: Marchetti’s constant, Chelsea Manning, Clayton Christensen, cognitive bias, cognitive dissonance, conceptual framework, David Brooks, demographic transition, double entry bookkeeping, double helix, Galaxy Zoo, guest worker program, Gödel, Escher, Bach, Ignaz Semmelweis: hand washing, index fund, invention of movable type, Isaac Newton, John Harrison: Longitude, Kevin Kelly, life extension, Marc Andreessen, meta analysis, meta-analysis, Milgram experiment, Nicholas Carr, P = NP, p-value, Paul Erdős, Pluto: dwarf planet, publication bias, randomized controlled trial, Richard Feynman, Rodney Brooks, scientific worldview, social graph, social web, text mining, the scientific method, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Tyler Cowen: Great Stagnation

But of course this growth can’t go on forever. Eventually the entire population that might possibly choose to adopt the gadget is reached. The growth slows down as it reaches this carrying capacity, obeying its logistic shape. These curves are also often referred to as S-curves, due to their stretched S-like shapes. This is the term that’s commonly used when discussing innovation adoption. Clayton Christensen, a professor at Harvard Business School, argues that a series of tightly coupled and successive S-curves—each describing the progression and lifetime of a single technology—can be combined sequentially when looking at what each consecutive technology is actually doing (such as transforming information) and together yield a steady and smooth exponential curve, exactly as Magee and Koh found.

“A Functional Approach for Studying Technological Progress: Application to Information Technology.” Technological Forecasting and Social Change 73, no. 9 (2006): 1061–83; Koh, Heebyung, and Christopher L. Magee. “A Functional Approach for Studying Technological Progress: Extension to Energy Technology.” Technological Forecasting and Social Change 75, no. 6 (2008): 735–58. 45 They begin to run out of space: This growth pattern assumes a continuous food supply. 45 Clayton Christensen, a professor at Harvard Business School: Christensen, Clayton M. “Exploring the Limits of the Technology S-Curve. Part I: Component Technologies.” Production and Operations Management 1, no. 4 (1992): 334–57. 46 they found mathematical regularities: More recent research has debated whether these are truly exponential or other fast-growing functions, such as power laws or double exponentials.


pages: 240 words: 73,209

The Education of a Value Investor: My Transformative Quest for Wealth, Wisdom, and Enlightenment by Guy Spier

Albert Einstein, Atul Gawande, Benoit Mandelbrot, big-box store, Black Swan, Checklist Manifesto, Clayton Christensen, Daniel Kahneman / Amos Tversky, Exxon Valdez, Gordon Gekko, housing crisis, information asymmetry, Isaac Newton, Kenneth Arrow, Long Term Capital Management, Mahatma Gandhi, mandelbrot fractal, Nelson Mandela, NetJets, pattern recognition, pre–internet, random walk, Ronald Reagan, South Sea Bubble, Steve Jobs, winner-take-all economy, young professional, zero-sum game

Here, I want to thank these people who have been instrumental in my education: I have been blessed with many extraordinary teachers and educators, including Peter Sinclair, Vernon Bogdanor, and Tony Courakis, who tutored me in economics and politics; Mary Stokes, John Davies, Hugh Collins, Peter Birks, and Bernard Rudden, who tutored me in law; and Diana Hughes, Charles Stewart, and others who taught me at the City of London Freemen’s School. Richard Nolan, Dick Poorvu, Rawi Abdelal, Clayton Christensen, Boris Groysberg, Len Schlesinger, Jan Hammond, David Joffe, Amar Bhide, Bill Sahlman, and Ray Goldberg are some, but not all, of the brilliant professors I had at Harvard Business School. In my professional life, I have also been tremendously fortunate to have had wonderful teachers and collaborators. John Mihaljevic: I am so grateful that you chose to move to Zurich when you did; I relish your friendship and our squash sessions!

Ramachandran and Sandra Blakeslee Signs of Life: How Complexity Pervades Biology by Ricard Solé and Brian Goodwin Synaptic Self: How Our Brains Become Who We Are by Joseph LeDoux Self-help A Message to Garcia by Elbert Hubbard A Simple Act of Gratitude: How Learning to Say Thank You Changed My Life by John Kralik Acres of Diamonds by Russell Conwell As a Man Thinketh by James Allen Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead by Brené Brown Focusing by Eugene Gendlin Getting the Love You Want: A Guide for Couples by Harville Hendrix Getting Things Done: The Art of Stress-Free Productivity by David Allen How to Win Friends and Influence People by Dale Carnegie How Will You Measure Your Life? by Clayton Christensen, James Allworth, and Karen Dillon Keeping the Love You Find: A Personal Guide by Harville Hendrix Manifest Your Destiny: The Nine Spiritual Principles for Getting Everything You Want by Wayne Dyer Success: Advice for Achieving Your Goals from Remarkably Accomplished People by Jena Pincott Thanks!: How Practicing Gratitude Can Make You Happier by Robert A. Emmons The Go-Getter: A Story That Tells You How to Be One by Peter Kyne The Laws of Lifetime Growth: Always Make Your Future Bigger Than Your Past by Dan Sullivan and Catherine Nomura The Power of Positive Thinking by Norman Vincent Peale The Power of Vulnerability: Teachings on Authenticity, Connection, and Courage by Brené Brown The Road Less Traveled: A New Psychology of Love, Traditional Values and Spiritual Growth by M.


pages: 1,136 words: 73,489

Working in Public: The Making and Maintenance of Open Source Software by Nadia Eghbal

Amazon Web Services, barriers to entry, Benevolent Dictator For Life (BDFL), bitcoin, Clayton Christensen, cloud computing, commoditize, continuous integration, crowdsourcing, cryptocurrency, David Heinemeier Hansson, death of newspapers, Debian, disruptive innovation, en.wikipedia.org, Ethereum, Firefox, Guido van Rossum, Hacker Ethic, Induced demand, informal economy, Jane Jacobs, Jean Tirole, Kevin Kelly, Kickstarter, Kubernetes, Mark Zuckerberg, Menlo Park, Network effects, node package manager, Norbert Wiener, pirate software, pull request, RFC: Request For Comment, Richard Stallman, Ronald Coase, Ruby on Rails, side project, Silicon Valley, Snapchat, social graph, software as a service, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, The Death and Life of Great American Cities, The Nature of the Firm, transaction costs, two-sided market, urban planning, web application, wikimedia commons, Zimmermann PGP

The security vulnerability had been disclosed with a CVE ID several months before, and a patch had been released, but Equifax’s developers failed to update the company’s software in time.227 Adapting to user needs Maintenance is often classified as reactive work: it’s the minimum required to keep things running smoothly. But users’ needs change over time, too. Software must also change to meet these needs, or else risk becoming irrelevant. Clayton Christensen famously identifies and analyzes this problem in The Innovator’s Dilemma, the 2003 book in which he tries to understand why successful companies can be overtaken by new ones, even if they are doing well. By focusing too much on iterating upon their incumbent product, companies risk missing major opportunities for so-called “disruptive innovation,” which eventually replaces existing products.228 Similarly, state-of-the-art software, even with regular maintenance, will eventually be replaced by something else that better addresses modern user preferences.

., https://twitter.com/steveklabnik/status/1139552342842458112. 225 “The State of the Octoverse,” GitHub, 2019, https://octoverse.github.com/. 226 Russ Cox, “Our Software Dependency Problem,” Research!rsc, January 23, 2019, https://research.swtch.com/deps. 227 Dan Goodin, “Failure to Patch Two-Month-Old Bug Led to Massive Equifax Breach,” Ars Technica, September 13, 2017, https://arstechnica.com/information-technology/2017/09/massive-equifax-breach-caused-by-failure-to-patch-two-month-old-bug/. 228 Clayton Christensen, The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business (New York, NY: Harper Business, 2003). 229 “PyPy Features,” PyPy, n.d., https://pypy.org/features.html. 230 “Call for Donations - PyPy to Support Python3!,” PyPy, December 2019, https://web.archive.org/web/20191209173423/https://www.pypy.org/py3donate.html. 231 Mikeal Rogers, “Request’s Past, Present and Future,” Request Issues, GitHub, March 30, 2019, https://github.com/request/request/issues/3142. 232 “Moving to Require Python 3,” Python 3 Statement, accessed March 30, 2020, https://python3statement.org/. 233 VPeric, “Differences between Distribute, Distutils, Setuptools and Distutils2?


pages: 309 words: 81,975

Brave New Work: Are You Ready to Reinvent Your Organization? by Aaron Dignan

"side hustle", activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, bitcoin, Black Swan, blockchain, Buckminster Fuller, Burning Man, butterfly effect, cashless society, Clayton Christensen, clean water, cognitive bias, cognitive dissonance, corporate governance, corporate social responsibility, correlation does not imply causation, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, David Heinemeier Hansson, deliberate practice, DevOps, disruptive innovation, don't be evil, Elon Musk, endowment effect, Ethereum, ethereum blockchain, Frederick Winslow Taylor, future of work, gender pay gap, Geoffrey West, Santa Fe Institute, gig economy, Google X / Alphabet X, hiring and firing, hive mind, income inequality, information asymmetry, Internet of things, Jeff Bezos, job satisfaction, Kevin Kelly, Kickstarter, Lean Startup, loose coupling, loss aversion, Lyft, Marc Andreessen, Mark Zuckerberg, minimum viable product, new economy, Paul Graham, race to the bottom, remote working, Richard Thaler, shareholder value, Silicon Valley, six sigma, smart contracts, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, source of truth, Stanford marshmallow experiment, Steve Jobs, TaskRabbit, the High Line, too big to fail, Toyota Production System, uber lyft, universal basic income, Y Combinator, zero-sum game

Your OODA loop is short. And you’re ready to act. Red Team. Over time, it can be hard to separate strategy from the status quo. Are we operating in sixty countries because that’s critical to our success or because we happened to acquire a bunch of foreign offices? The longer we operate, the more organizational debt we likely carry with us, limiting our ability to innovate. Indeed, Professor Clayton Christensen coined the term “the innovator’s dilemma” to describe why incumbents are so often disrupted by upstarts and unexpected competitors. To resist this pattern, try launching a red team. Originating in the military and intelligence communities but now practiced in a variety of business contexts, a red team is charged with one mission: putting you out of business. Gather any group of colleagues and ask them to design the competitor that would bury you.

When a CMO at a Fortune 10 company reported to his peers that he was saving fourteen hours a week based on changes his team had made, you could see the jealousy on everyone’s face. There’s nothing that legacy cultures love more than a measurable productivity gain, so when things do move the needle, they spread fast. Wonder. Winning experiments reveal new possibilities. Working in new ways opens the mind to what could be. Clayton Christensen once told software entrepreneur Jason Fried, “Questions are places in your mind where answers fit. If you haven’t asked the question, the answer has nowhere to go. It hits your mind and bounces right off. You have to ask the question—you have to want to know—in order to open up the space for the answer to fit.” This is profoundly true in transformation work. We start small and expand as our hunger for more radical ideas grows.


pages: 299 words: 92,782

The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing by Michael J. Mauboussin

Amazon Mechanical Turk, Atul Gawande, Benoit Mandelbrot, Black Swan, Checklist Manifesto, Clayton Christensen, cognitive bias, commoditize, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice, disruptive innovation, Emanuel Derman, fundamental attribution error, Gini coefficient, hindsight bias, hiring and firing, income inequality, Innovator's Dilemma, Long Term Capital Management, loss aversion, Menlo Park, mental accounting, moral hazard, Network effects, prisoner's dilemma, random walk, Richard Thaler, risk-adjusted returns, shareholder value, Simon Singh, six sigma, Steven Pinker, transaction costs, winner-take-all economy, zero-sum game, Zipf's Law

Leach explained that “defensive linemen really aren't much good at covering receivers. They aren't built to run around that much. And when they do, you have a bunch of people on the other team doing things they don't have much experience doing.” By adding battlefields to the game, Leach diluted the advantage of the stronger teams.7 Colonel Blotto also has parallels to business. One illustration is the theory of disruptive innovation developed by Clayton Christensen at Harvard Business School. Christensen studies why great companies with smart managements and substantial resources consistently lose to companies with simpler, cheaper, and inferior products. He calls these upstarts “disruptors” and distinguishes between what he calls sustaining and disruptive innovation.8 Sustaining innovation involves steadily improving a product that already exists.

Underdogs that successfully increase the influence of luck will also increase their chance of winning. Take war as an example. Weaker combatants won a higher percentage of wars in the twentieth century than the nineteenth century because they learned not to go toe-to-toe with their stronger foe. Instead, they pursued alternative strategies and tactics, including those of guerrilla warfare. Professor Clayton Christensen's theory of disruptive innovation shows how companies that are initially weaker overcome their more formidable competitors. One of his insights is that the stronger companies initially concede part of the market to the weaker companies or ignore them altogether.18 The stronger companies allow the disruptors to win small battles, which allows to disruptors to improve their products and make money.


pages: 102 words: 27,769

Rework by Jason Fried, David Heinemeier Hansson

call centre, Clayton Christensen, Dean Kamen, Exxon Valdez, fault tolerance, James Dyson, Jeff Bezos, Ralph Nader, risk tolerance, Ruby on Rails, Steve Jobs, Tony Hsieh, Y Combinator

In addition to writing original content, he helped merge the distinctly different writing styles of the coauthors into a focused, cohesive book. He made it look easy, but it wasn’t easy work. Thank you, Matt. We also want to thank our families, our customers, and everyone at 37signals. And here’s a list of some of the people we know, and don’t know, who have inspired us in one way or another: Frank Lloyd Wright Seth Godin Warren Buffett Jamie Larson Clayton Christensen Ralph Nader Jim Coudal Benjamin Franklin Ernest Kim Jeff Bezos Scott Heiferman Antoni Gaudi Carlos Segura Larry David Steve Jobs Dean Kamen Bill Maher Thomas Jefferson Mies van der Rohe Ricardo Semler Christopher Alexander James Dyson Kent Beck Thomas Paine Gerald Weinberg Kathy Sierra Julia Child Marc Hedlund Nicholas Karavites Michael Jordan Richard Bird Jeffrey Zeldman Dieter Rams Judith Sheindlin Ron Paul Timothy Ferriss Copyright © 2010 by 37signals, LLC.


pages: 327 words: 102,322

Losing the Signal: The Spectacular Rise and Fall of BlackBerry by Jacquie McNish, Sean Silcoff

Albert Einstein, Clayton Christensen, corporate governance, diversified portfolio, indoor plumbing, Iridium satellite, patent troll, QWERTY keyboard, rolodex, Silicon Valley, Silicon Valley startup, skunkworks, Skype, Stephen Hawking, Steve Ballmer, Steve Jobs, the new new thing

He likened it to giving QNX “training wheels” before taking on the task of overhauling his beloved BlackBerry from the inside—as well as the entire software organization that provided its digital core—to build RIM’s smartphone of the future. “I was basically putting the company through the biggest transformation they had ever experienced,” he says. Lazaridis had a blueprint inspired by Clayton Christensen’s acclaimed 1997 management book, The Innovator’s Dilemma.3 The Harvard professor argued that for established companies to succeed against disruptive competitors, they had to empower small, cloistered teams. These autonomous groups, unsullied by the parent company’s set ways, would develop disruptive technologies of their own and could eventually subsume other parts of the organization. It was tumultuous but necessary to stay at the forefront of innovation.

brandID=21. 15 / FAULT LINES 1 Ben Worthen, “Businesses Add iPads to Their Briefcases,” Wall Street Journal, August 24, 2010. 2 Jobs claimed Adobe “screwed” him by refusing to make a Mac version of Adobe Premiere in 1999 and later attacked Flash, telling biographer Walter Isaacson that it was “a spaghetti-ball piece of technology that has lousy performance and really bad security problems.” Isaacson, Steve Jobs, pp. 514–5. 3 Clayton Christensen, The Innovator’s Dilemma, Boston, Harvard Business Publishing, 1997. 4 BlackBerry turned down interview requests with Dan Dodge for this book. 5 Chloe Albanesius, “Adobe Ditching Mobile Browser Flash Player Development,” PC Magazine, November 9, 2011. 6 RIM’s share of AT&T, which was lower to begin with because of the carrier’s relationship with Apple, dipped to 15 percent in the fourth quarter of 2010, down from 18 percent a year earlier. 7 Mikael Ricknäs, “Samsung Becomes Biggest Smartphone Vendor, as Android’s Market Share Grows,” PC World, November 15, 2011. 8 Paul Christoper Webster and Iain Marlow, “Where the BlackBerry Still Reigns Supreme,” Report on Business Magazine, November 29, 2012. 9 Susana Ferreira and Will Connors, “In These Countries, BlackBerry Is Still King—Of Pop Culture,” Wall Street Journal, September 11, 2012. 10 “BlackBerry Babes,” The Economist, December 8, 2012. 11 “BlackBerry Loses Top Spot to Apple at Home: Corporate Canada,” Bloomberg, March 22, 2012. 12 Zahraa al Khalisi, “BlackBerry ‘Pins’ Are the New Licence Plates,” The National (United Arab Emirates), September 19, 2009; author interview with Patrick Spence, 2014. 13 Sandeep Singh Grewal, “Comeback Vow by Journalist,” Gulf Daily News, September 23, 2010; Yousef, “Blackberries, Breaking News and Bans,” Flipcorp.com, September 25, 2011, www.flipcorp.com/en/read/blog/bahrain-blackberries.blog. 14 This information is based on a statement of defense and counterclaim filed in Canadian Federal Court by Kik Interactive against RIM in April 2011; it was not tested in court.


pages: 417 words: 97,577

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, bank run, barriers to entry, Berlin Wall, Bernie Sanders, big-box store, Bob Noyce, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, computer age, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fall of the Berlin Wall, family office, financial innovation, full employment, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, income inequality, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, John Nash: game theory, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, passive investing, patent troll, Peter Thiel, plutocrats, Plutocrats, prediction markets, prisoner's dilemma, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Silicon Valley, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, very high income, wikimedia commons, William Shockley: the traitorous eight, zero-sum game

It took Steve Jobs and Apple to license them and bring products to the public. Likewise, AT&T and RCA were extremely innovative companies, but other companies ultimately developed their key technologies, such as the transistor. AT&T and RCA stuck to phones and radio, and became the antithesis of originality.55 There is a reason why big companies are so bad at implementing new ideas. Steve Jobs rarely recommended books, but he liked The Innovator's Dilemma by Clayton Christensen. His 1997 book was embraced by Silicon Valley and called one of the six best business books ever by The Economist.56 Christensen's theory was that because successful companies cannot disrupt themselves; they leave themselves vulnerable to competition from upstarts because they abandon the lower end of the market. Smaller companies are willing to pursue niche markets, and produce cheaper, lower-quality products.

Audretsch, “Testing the Schumpeterian Hypothesis,” Eastern Economic Journal XIV, no. 2 (1988). 51. https://www.marketwatch.com/story/americas-most-successful-companies-are-killing-the-economy-2017-05-24. 52. https://www.bloomberg.com/news/articles/2017-10-12/google-has-made-a-mess-of-robotics. 53. http://blog.luxresearchinc.com/blog/2016/03/the-downfall-of-google-robotics/. 54. Michael A. Hiltzik, Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age (HarperBusiness, 1999). 55. Barry C. Lynn, Cornered: The New Monopoly Capitalism and the Economics of Destruction (Hoboken, NJ: Wiley, 2010). 56. https://qz.com/801706/innovation-guru-clayton-christensens-new-theory-will-help-protect-you-from-disruption/. 57. Frederic M. Scherer, “Technological Innovation and Monopolization” (October 2007). KSG Working Paper No. RWP07-043. Available at SSRN: https://ssrn.com/abstract=1019023. 58. John J. McConnell, John J. Sibley, E. Steven, and Wei Xu, “The Stock Price Performance of Spin-Off Subsidiaries, Their Parents, and the Spin-Off ETF, 2001–2013,” Journal of Portfolio Management; New York 42, no. 1 (Fall 2015): 143–152. 59. http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/. 60.


pages: 459 words: 103,153

Adapt: Why Success Always Starts With Failure by Tim Harford

Andrew Wiles, banking crisis, Basel III, Berlin Wall, Bernie Madoff, Black Swan, car-free, carbon footprint, Cass Sunstein, charter city, Clayton Christensen, clean water, cloud computing, cognitive dissonance, complexity theory, corporate governance, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, Deep Water Horizon, Deng Xiaoping, disruptive innovation, double entry bookkeeping, Edmond Halley, en.wikipedia.org, Erik Brynjolfsson, experimental subject, Fall of the Berlin Wall, Fermat's Last Theorem, Firefox, food miles, Gerolamo Cardano, global supply chain, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, Jarndyce and Jarndyce, John Harrison: Longitude, knowledge worker, loose coupling, Martin Wolf, mass immigration, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Netflix Prize, New Urbanism, Nick Leeson, PageRank, Piper Alpha, profit motive, Richard Florida, Richard Thaler, rolodex, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, South China Sea, special economic zone, spectrum auction, Steve Jobs, supply-chain management, the market place, The Wisdom of Crowds, too big to fail, trade route, Tyler Cowen: Great Stagnation, web application, X Prize, zero-sum game

There is surely a reason why so few companies have actually emulated W.L. Gore over the past half-century. And yet some business scholars wonder if even the approach of a W.L. Gore or a Google is really radical enough to cope with truly disruptive business ideas. 6 When companies become dinosaurs Guppies breed so quickly that John Endler was able to produce guppy evolution withn months. When Clayton Christensen of Harvard Business School wanted to understand why some apparently capable companies find themselves wiped out by a sudden shift in the competitive landscape, he looked for the economic equivalent of a greenhouse full of guppies. The disk-drive industry was his first port of call: a market in which upstarts frequently seem to usurp the market leaders. As with John Endler’s guppies, what Christensen discovered points to a much wider truth.

Nothing much seems to have come of this yet. Conspiracy theorists may believe that this is because Shell has an evil plan to dominate and disrupt the threat from renewable technologies. I doubt this. If there really is a cost-effective renewable alternative to the eons of energy concentrated into crude oil, it would be very much in Shell’s interests to commercialise it. The explanation is simpler: following Clayton Christensen’s logic, there is simply no reason to expect an oil company to be particularly good at inventing, manufacturing or distributing photovoltaic solar panels. Oil companies are good at very different things: negotiating with African and Middle Eastern governments, complex drilling operations, building and operating refineries and chemical engineering plants, and selling liquid fuels in roadside forecourts.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

"Robert Solow", 3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, disruptive innovation, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, plutocrats, Plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Rodney Brooks, Sam Peltzman, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, uber lyft, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

The number of schools with national reputations, or that might be considered truly elite, is, of course, far smaller. Imagine a future where college students can attend free online courses taught by Harvard or Stanford professors and subsequently receive a credential that would be acceptable to employers or graduate schools. Who, then, would be willing to go into debt in order to pay the tuition at a third- or fourth-tier institution? Clayton Christensen, a professor at Harvard Business School and an expert in disruptive innovation within industries, has predicted that the answer to that question will result in a grim future for thousands of institutions. In a 2013 interview, Christensen said that “15 years from now, half of US universities may be in bankruptcy.”22 Even if most institutions remain solvent, it is easy to imagine dramatically declining enrollments and revenues coupled with massive layoffs of both administrators and faculty.

This information regarding graduation rates is provided by the National Center of Education Statistics, http://nces.ed.gov/fastfacts/display.asp?id=40. 18. Selingo, College Unbound, p. 27. 19. “Senior Administrators Now Officially Outnumber Faculty at the UC” (Reclaim UC blog), September 19, 2011, http://reclaimuc.blogspot.com/2011/09/senior-administrators-now-officially.html. 20. Selingo, College Unbound, p. 28. 21. Ibid. 22. Clayton Christensen interview with Mark Suster at Startup Grind 2013, available at YouTube, http://www.youtube.com/watch?v=KYVdf5xyD8I. 23. William G. Bowen, Matthew M. Chingos, Kelly A. Lack, and Thomas I. Nygren, “Interactive Learning Online at Public Universities: Evidence from Randomized Trials,” Ithaka S+R Research Publication, May 22, 2012, http://www.sr.ithaka.org/research-publications/interactive-learning-online-public-universities-evidence-randomized-trials.


pages: 133 words: 36,528

Peak Car: The Future of Travel by David Metz

autonomous vehicles, bike sharing scheme, Clayton Christensen, congestion charging, crowdsourcing, David Attenborough, decarbonisation, disruptive innovation, edge city, Edward Glaeser, Just-in-time delivery, low cost airline, Network effects, Richard Florida, Robert Gordon, Silicon Valley, Skype, urban sprawl, yield management, young professional

My expectation is that driverless cars, to the extent they penetrate the market, will amount to an incremental improvement, not a disruptive innovation—best regarded as robot chauffeurs. One possible application of this technology would be to taxis, if lower fares increased their attraction to passengers (in which case the innovation would be disruptive to taxi drivers). Driverless trains are already with us—for instance on London’s Docklands Light Railway—safe and practical because access to the system is controlled. Clayton Christensen, originator of the concept of disruptive innovation, argued that the electric car might be such a technology. Possibly the electric car will displace vehicles powered by conventional internal combustion engines. Car manufacturers who do not have access to this technology would lose market share, but the battery manufacturers who might make the technological breakthrough would be keen to supply all users.


pages: 474 words: 120,801

The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be by Moises Naim

additive manufacturing, barriers to entry, Berlin Wall, bilateral investment treaty, business cycle, business process, business process outsourcing, call centre, citizen journalism, Clayton Christensen, clean water, collapse of Lehman Brothers, collective bargaining, colonial rule, conceptual framework, corporate governance, creative destruction, crony capitalism, deskilling, disintermediation, disruptive innovation, don't be evil, failed state, Fall of the Berlin Wall, financial deregulation, Francis Fukuyama: the end of history, illegal immigration, immigration reform, income inequality, income per capita, intangible asset, intermodal, invisible hand, job-hopping, Joseph Schumpeter, Julian Assange, Kickstarter, liberation theology, Martin Wolf, mega-rich, megacity, Naomi Klein, Nate Silver, new economy, Northern Rock, Occupy movement, open borders, open economy, Peace of Westphalia, plutocrats, Plutocrats, price mechanism, price stability, private military company, profit maximization, Ronald Coase, Ronald Reagan, Silicon Valley, Skype, Steve Jobs, The Nature of the Firm, Thomas Malthus, too big to fail, trade route, transaction costs, Washington Consensus, WikiLeaks, World Values Survey, zero-sum game

Steel illustrate the same process of industrial mutation . . . that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”42 The shifts in power that we see all around us—which include and transcend the ascent and demise of business enterprises—are certainly consistent with Schumpeter’s expectations. They are also in line with the insights of Clayton Christensen, a Harvard Business School professor who coined the term disruptive innovation, meaning a change—in technology, service, or product—that creates a new market by relying on a completely new approach. The effects of a disruptive innovation eventually spill over to other related or similar markets and undermine them. The iPad is a good example. Using your cellphone to pay for groceries or to send money to your daughter in another continent are two other good examples.

In pharmaceuticals, outsourcing drug manufacture is a long-standing process, but drug discovery was long closely held. On the other hand, the outsourced drug discovery market has grown faster than overall drug R&D since 2001; it expanded from $2 billion in 2003 to $5.4 billion in 2007 and is estimated to be currently growing at 16 percent per year.45 None of this bodes well for large companies. As the business scholar Clayton Christensen argued in a famous book, The Innovator’s Dilemma, even the very best large companies operate by a set of procedures that make them good at harnessing “sustaining technologies” (the new technologies that help make existing products better) but terrible at identifying and capitalizing on disruptive technologies (the new technologies that usually emerge at the margins of an existing market but eventually stand to remake it).


pages: 393 words: 115,217

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries by Safi Bahcall

accounting loophole / creative accounting, Albert Einstein, Apple II, Apple's 1984 Super Bowl advert, Astronomia nova, British Empire, Cass Sunstein, Charles Lindbergh, Clayton Christensen, cognitive bias, creative destruction, disruptive innovation, diversified portfolio, double helix, Douglas Engelbart, Douglas Engelbart, Edmond Halley, Gary Taubes, hypertext link, invisible hand, Isaac Newton, Johannes Kepler, Jony Ive, knowledge economy, lone genius, Louis Pasteur, Mark Zuckerberg, Menlo Park, Mother of all demos, Murray Gell-Mann, PageRank, Peter Thiel, Philip Mirowski, Pierre-Simon Laplace, prediction markets, pre–internet, Ralph Waldo Emerson, RAND corporation, random walk, Richard Feynman, Richard Thaler, side project, Silicon Valley, six sigma, Solar eclipse in 1919, stem cell, Steve Jobs, Steve Wozniak, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tim Cook: Apple, tulip mania, Wall-E, wikimedia commons, yield management

Disruption This afterword is mostly for business-theory or innovation-theory junkies who may have heard of, or even occasionally make use of, the term disruptive or the term (which causes me even more stomach pain) disruptive innovation. First, to get something out of the way quickly: the two types of loonshots described in chapter 3 are unrelated to what Louis Galambos in 1992 called “adaptive” vs. “formative” innovations, and Clayton Christensen in 1997 called “sustaining” vs. “disruptive” innovations. The two loonshots distinguish between a new strategy (S-type) and a new product or technology (P-type). Galambos and Christensen distinguish between improvements to existing products (sustaining) and technologies that eventually significantly alter some market (disruptive). Christensen specifically emphasizes new products, from new entrants, that begin in the “low end” of a market, with inferior quality, and gradually improve until they win over the high-end customers of an incumbent.

*    The term “franchise” is a convenient shorthand used in film and drug discovery and certain other businesses. The reason to use the term will become clearer later. *    The word choice is borrowed from a phrase made famous by Sheryl Sandberg. *    For business theorists: The two types of loonshots are unrelated to what Louis Galambos in 1992 called “adaptive” vs. “formative” innovations, and Clayton Christensen in 1997 called “sustaining” vs. “disruptive” innovations. For the distinction, see the afterword. *    The data sample included over one hundred YouTube concert videos watched by the authors, from which they concluded mosh pits and circle pits “are robust, reproducible, and largely independent of factors such as the musical subgenre, timing of performance, crowd size, arena size, suggestions from the band, time of year, and socioeconomic status of the moshers” (Silverberg et al., “Collective Motion of Humans in Mosh and Circle Pits at Heavy Metal Concerts,” PRL 110 [2013]).


Super Thinking: The Big Book of Mental Models by Gabriel Weinberg, Lauren McCann

affirmative action, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, anti-pattern, Anton Chekhov, autonomous vehicles, bank run, barriers to entry, Bayesian statistics, Bernie Madoff, Bernie Sanders, Black Swan, Broken windows theory, business process, butterfly effect, Cal Newport, Clayton Christensen, cognitive dissonance, commoditize, correlation does not imply causation, crowdsourcing, Daniel Kahneman / Amos Tversky, David Attenborough, delayed gratification, deliberate practice, discounted cash flows, disruptive innovation, Donald Trump, Douglas Hofstadter, Edward Lorenz: Chaos theory, Edward Snowden, effective altruism, Elon Musk, en.wikipedia.org, experimental subject, fear of failure, feminist movement, Filter Bubble, framing effect, friendly fire, fundamental attribution error, Gödel, Escher, Bach, hindsight bias, housing crisis, Ignaz Semmelweis: hand washing, illegal immigration, income inequality, information asymmetry, Isaac Newton, Jeff Bezos, John Nash: game theory, lateral thinking, loss aversion, Louis Pasteur, Lyft, mail merge, Mark Zuckerberg, meta analysis, meta-analysis, Metcalfe’s law, Milgram experiment, minimum viable product, moral hazard, mutually assured destruction, Nash equilibrium, Network effects, nuclear winter, offshore financial centre, p-value, Parkinson's law, Paul Graham, peak oil, Peter Thiel, phenotype, Pierre-Simon Laplace, placebo effect, Potemkin village, prediction markets, premature optimization, price anchoring, principal–agent problem, publication bias, recommendation engine, remote working, replication crisis, Richard Feynman, Richard Feynman: Challenger O-ring, Richard Thaler, ride hailing / ride sharing, Robert Metcalfe, Ronald Coase, Ronald Reagan, school choice, Schrödinger's Cat, selection bias, Shai Danziger, side project, Silicon Valley, Silicon Valley startup, speech recognition, statistical model, Steve Jobs, Steve Wozniak, Steven Pinker, survivorship bias, The Present Situation in Quantum Mechanics, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, transaction costs, uber lyft, ultimatum game, uranium enrichment, urban planning, Vilfredo Pareto, wikimedia commons

Consulting advisers, who can more easily see your situation objectively, can help you determine whether a pivot is a good move. More broadly, pivoting can apply across all areas of life: your career path, a difficult relationship, how you’re approaching meeting your child’s educational needs, and so forth. When considering a pivot, you can use a few mental models to help you decide what to do. Harvard Business School professor Clayton Christensen named and championed the model of jobs to be done, which asks you to figure out the real job that your product does, which can be different than what you might initially think. An oft-cited example by Christensen is a power drill: “Customers want to ‘hire’ a product to do a job, or, as legendary Harvard Business School marketing professor Theodore Levitt put it, ‘People don’t want to buy a quarter-inch drill.

It is an interesting question in counterfactual thinking (see Chapter 6) to ask what would have happened if Kodak had tried to develop the digital photography market earlier. Would it have been able to dominate that market? Would we all have had digital cameras years earlier? Could it have eventually pivoted into a role powering the cameras in most smartphones or pivoted even more drastically and created a product like Instagram? We’ll never know. Consumer Camera Sales Digital vs. Smartphone, 2002-2016 In Clayton Christensen’s seminal work The Innovator’s Dilemma, he lays out the framework for how such disruptive innovations ripple through industries, ushering new industry entrants into power while leaving dead incumbents in their wake. The incumbent’s dilemma is whether to embrace the disruptive technology, usually at the great cost of the existing business. That’s what Intel did but Kodak didn’t do. If Kodak had more readily embraced digital camera technology, it would have directly cannibalized its outsized profits in analog film technology.


pages: 138 words: 40,787

The Silent Intelligence: The Internet of Things by Daniel Kellmereit, Daniel Obodovski

Airbnb, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, business intelligence, call centre, Clayton Christensen, cloud computing, commoditize, connected car, crowdsourcing, data acquisition, en.wikipedia.org, Erik Brynjolfsson, first square of the chessboard, first square of the chessboard / second half of the chessboard, Freestyle chess, Google X / Alphabet X, Internet of things, lifelogging, Metcalfe’s law, Network effects, Paul Graham, Ray Kurzweil, RFID, Robert Metcalfe, self-driving car, Silicon Valley, smart cities, smart grid, software as a service, Steve Jobs, web application, Y Combinator, yield management

(Source: http://www.theatlanticcities.com/authors/anthony-flint/.) 23 SARTRE, Partners Conclude After the SARTRE Project (2012). http://www.sartre-project.eu/en/about/news/Sidor/20120917_1.aspx. 24 Economist Intelligence Unit, Rise of the Machines: Moving from Hype to Reality in the Burgeoning Market for Machine-to-Machine Communication (2012). http://digitalresearch.eiu.com/m2m/report. Chapter 5 USE CASES The use cases capture the goals of the system. To understand a use case, we tell stories. ~ Ivar Jacobson In his book The Innovator’s Dilemma,25 Clayton Christensen uses a fascinating Harvard Business School case called “Hewlett-Packard: The Flight of the Kittyhawk.” The Kittyhawk was the product name of a revolutionary hard disk drive developed by Hewlett-Packard (HP) in the early ’90s. The disk was tiny and had a capacity of 20MB to 40MB, which made the product unique at its time with potential to disrupt one or more industries. Yet the sales volume of the disk was disappointing.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, starchitect, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

Sull calls this “active inertia” and he believes it is the main reason good companies fail: “When the world changes, organizations trapped in active inertia do more of the same. A little faster perhaps or tweaked at the margin, but basically the same old same old. . . . Organizations trapped in active inertia resemble a car with its back wheels stuck in a rut. Managers step on the gas. Rather than escape the rut, they only dig themselves in deeper.” Clayton Christensen, the Harvard Business School professor whose book The Innovator’s Dilemma is the corporate bible on disruptive change, has found that established companies almost always fail when their industries are confronted with disruptive new technologies or markets. And that is not, he argues, because their managers are dumb or lazy. It is because what works in ordinary times is a recipe for disaster in revolutionary ones.

., before the United States House of Representatives Committee on Oversight and Government Reform, October 6, 2008. “I made a mistake” Transcript of House of Representatives Committee on Oversight and Government Reform Hearing on the Role of Federal Regulators, October 23, 2008. “we always assume regime stability” McFaul e-mail to CF, February 22, 2011. “active inertia” Donald Sull, “Why Good Companies Go Bad,” Financial Times, October 3, 2005. “These failed firms” Clayton Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Harvard Business School Press, 1997), p. xv. “vast, silent, connected” W. Brian Arthur, “The Second Economy,” McKinsey Quarterly, October 2011. Facebook’s Mark Zuckerberg Zuckerberg attended Ardsley High School for two years before transferring to Phillips Exeter Academy. “Dopamine, a pleasure-inducing” Ajay Kapur, Niall Macleod, and Narendra Singh, “Plutonomy: Buying Luxury, Explaining Global Imbalances,” Citigroup Global Markets Equity Strategy report, October 16, 2005.


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The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

If you have a hammer, the whole world looks like a nail. Hence, when financial services expand, business development tends to be pushed out. The BIS economists discovered this in one of their studies, and argued that “productivity tends to grow disproportionally slower in industries with lower asset tangibility.”58 Many others have suggested a similar type of problem. “The emphasis on earnings per share,” argue Harvard’s Clayton Christensen and colleagues, “diverts resources away from investments whose payoff lies beyond the immediate horizon.”59 Another way to put it, and to simplify to an extreme, is that an investor owning a stock for only a few months has little interest in supporting costly investments today that might pay off years in the future. Undoubtedly the capital deepening of a company builds stock value, but not necessarily in the short term – and it is actively discouraged when it erodes the short-term earning capacity of firms.

This is perhaps to be expected; at the least, it makes investment decisions easier, or rather less open to criticism. However, the risk is that ignoring nonquantifiable objectives pushes companies to make the wrong investment choices: that overlooking becomes too mechanical, and that is a particularly acute problem when dealing with investments in innovation. The use of standard quantitative valuation methods, argue Harvard’s “innovation guru” Clayton Christensen and colleagues, “causes managers to underestimate the real returns and benefits of proceeding with investments in innovation.”69 In other words, companies risk failing to accurately predict future cash flows by making incorrect assumptions about the future. But, to make it even more intriguing, myopic companies also become overoptimistic about the not-to-invest scenario when modeling current investments quantitatively.


The Future of Technology by Tom Standage

air freight, barriers to entry, business process, business process outsourcing, call centre, Clayton Christensen, computer vision, connected car, corporate governance, creative destruction, disintermediation, disruptive innovation, distributed generation, double helix, experimental economics, full employment, hydrogen economy, industrial robot, informal economy, information asymmetry, interchangeable parts, job satisfaction, labour market flexibility, Marc Andreessen, market design, Menlo Park, millennium bug, moral hazard, natural language processing, Network effects, new economy, Nicholas Carr, optical character recognition, railway mania, rent-seeking, RFID, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, smart grid, software as a service, spectrum auction, speech recognition, stem cell, Steve Ballmer, technology bubble, telemarketer, transcontinental railway, Y2K

“The industry is simply too efficient,” says Eric Schmidt, Google’s chief executive (who seems to have gone quite grey during his mixed performance at his previous job as boss of Novell, a software firm). The it industry also differs from other technology sectors in that its wares become less valuable as they get better, and go from “undershoot” to “overshoot,” to use the terms coined by Clayton Christensen, a professor at Harvard Business School. A technology is in “undershoot” when it is not good enough for most customers, so they are willing to pay a lot for something that is a bit better although not perfect. Conversely, “overshoot” means that a technology is more than sufficient for most uses, and margins sink lower. pcs quickly became a commodity, mainly because ibm outsourced the components for its first venture into this market in the early 1980s, allowing others to clone the machines.

The bitter irony, says Mr Lane, is that Microsoft is one of the least likely companies to make breakthroughs in simplification. “It cannot cannibalise itself,” says Mr Lane. “It faces the dilemma.” The dilemma? These days, whenever anybody in the it industry mentions that word, it is instantly understood to refer to The Innovator’s Dilemma (Harvard Business School Press, 1997), a book by Clayton Christensen, a professor at Harvard Business School, who has since followed it up with a sequel, The Innovator’s Solution (Harvard Business School Press, 2003). In a nutshell, the dilemma is this: firms that succeed in one generation of innovation almost inevitably become hamstrung by their own success and thus doomed to lose out in the next wave of innovation. Just as they “disrupted” the previous era’s leaders, they are in turn disrupted by the pioneers of the next era.


pages: 476 words: 132,042

What Technology Wants by Kevin Kelly

Albert Einstein, Alfred Russel Wallace, Buckminster Fuller, c2.com, carbon-based life, Cass Sunstein, charter city, Clayton Christensen, cloud computing, computer vision, Danny Hillis, dematerialisation, demographic transition, double entry bookkeeping, Douglas Engelbart, en.wikipedia.org, Exxon Valdez, George Gilder, gravity well, hive mind, Howard Rheingold, interchangeable parts, invention of air conditioning, invention of writing, Isaac Newton, Jaron Lanier, Joan Didion, John Conway, John Markoff, John von Neumann, Kevin Kelly, knowledge economy, Lao Tzu, life extension, Louis Daguerre, Marshall McLuhan, megacity, meta analysis, meta-analysis, new economy, off grid, out of africa, performance metric, personalized medicine, phenotype, Picturephone, planetary scale, RAND corporation, random walk, Ray Kurzweil, recommendation engine, refrigerator car, Richard Florida, Rubik’s Cube, Silicon Valley, silicon-based life, Skype, speech recognition, Stephen Hawking, Steve Jobs, Stewart Brand, Ted Kaczynski, the built environment, the scientific method, Thomas Malthus, Vernor Vinge, wealth creators, Whole Earth Catalog, Y2K

Laser Focus World, 42 (2). http://www.laserfocusworld.com/articles/248128. 169 which it passed in 1997: David C. Brock and Gordon E. Moore. (2006) “Understanding Moore’s Law.” Philadelphia: Chemical Heritage Foundation. 169 The Continuum of Kryder’s Law: Data from Clayton Christensen. (1997) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press, p. 10. 170 need to “listen to the technology”: (2001) “An Interview with Carver Mead.” American Spectator, 34 (7). http://laputan.blogspot.com/2003_09_21_laputan_archive.html. 170 Compound S Curves: Data from Clayton Christensen. (1997) The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston: Harvard Business School Press, p. 40. 9. Choosing the Inevitable 176 First Glimpse of the Picture Phone: AT&T archival photograph via “Showcasing Technology at the 1964-1965 New York World’s Fair.” http://www.westland.net/ny64fair/map-docs/technolog y.htm. 177 everyone recognized the vision: (2010) “Videophone.”


pages: 209 words: 53,236

The Scandal of Money by George Gilder

Affordable Care Act / Obamacare, bank run, Bernie Sanders, bitcoin, blockchain, borderless world, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, Claude Shannon: information theory, Clayton Christensen, cloud computing, corporate governance, cryptocurrency, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, Deng Xiaoping, disintermediation, Donald Trump, fiat currency, financial innovation, Fractional reserve banking, full employment, George Gilder, glass ceiling, Home mortgage interest deduction, index fund, indoor plumbing, industrial robot, inflation targeting, informal economy, Innovator's Dilemma, Internet of things, invisible hand, Isaac Newton, Jeff Bezos, John von Neumann, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, Law of Accelerating Returns, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, money: store of value / unit of account / medium of exchange, mortgage tax deduction, obamacare, Paul Samuelson, Peter Thiel, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, reserve currency, road to serfdom, Robert Gordon, Robert Metcalfe, Ronald Reagan, Sand Hill Road, Satoshi Nakamoto, Search for Extraterrestrial Intelligence, secular stagnation, seigniorage, Silicon Valley, smart grid, South China Sea, special drawing rights, The Great Moderation, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, time value of money, too big to fail, transaction costs, trickle-down economics, Turing machine, winner-take-all economy, yield curve, zero-sum game

Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound,” keynote address, National Association of Business Economists’ Policy Conference, February 24, 2014, which focuses on the impotence of expansionary monetary policy when interest rates approach zero. 7.Peter Thiel with Blake Masters, Zero to One: Notes on Startups, or How to Build the Future (New York, NY: Crown Business, 2014), 193. For my time-sensitive money, this is the most original and interesting book ever written on business strategy. (Its chief rival is the more technical Innovators’ Dilemma by Clayton Christensen.) 8.Nassim Nicholas Taleb and Mark Spitznagel, “The Great Bank Robbery,” Global Public Square, CNN, October 2011. 9.David Malpass, speech to the Needham Growth Conference, New York, January 15, 2015. As Malpass points out, zero interest rates mean free money, and “when anything is free it is allocated by queue and only the privileged folk at the front of the line get any.” 10.Charles Gave, “Poverty Matters for Capitalists,” GavekalDragonomics (Hong Kong: Gavekal Global Research, July 9, 2014), 1–6.


pages: 550 words: 154,725

The Idea Factory: Bell Labs and the Great Age of American Innovation by Jon Gertner

Albert Einstein, back-to-the-land, Black Swan, business climate, Claude Shannon: information theory, Clayton Christensen, complexity theory, corporate governance, cuban missile crisis, Edward Thorp, horn antenna, Hush-A-Phone, information retrieval, invention of the telephone, James Watt: steam engine, Karl Jansky, knowledge economy, Leonard Kleinrock, Metcalfe’s law, Nicholas Carr, Norbert Wiener, Picturephone, Richard Feynman, Robert Metcalfe, Sand Hill Road, Silicon Valley, Skype, Steve Jobs, Telecommunications Act of 1996, traveling salesman, undersea cable, uranium enrichment, William Shockley: the traitorous eight

They would prefer to invest in incremental improvements, and to have wonderful picnics, and make this quarter’s earnings without strain.” In part, Mayo connects this to the “immense stress” associated with funding research on ideas that may destroy your business if the results make your current product obsolete. Those who study innovation know this as the innovator’s dilemma, a term coined by the Harvard professor Clayton Christensen. “This is a very strong force,” Mayo points out. “It’s in me. And in everybody.” Strangely enough, however, it may not have been in Mervin Kelly or in some of his disciples—perhaps because the monopoly, at least for a time, guaranteed that the phone company’s business would remain sturdy even in the face of drastic technological upheaval. Kelly, for instance, who toiled for decades to improve and perfect the vacuum tube, effectively lobbied for a research program on the transistor that, when it succeeded, rendered his entire previous career in science irrelevant.

With so many uncertainties in the picture no accurate estimate of research and development cost can be had but comparison with other large system developments would suggest a minimum cost of $20,000,000 and a possibility of a considerably higher figure.” The memo also predicted, incorrectly, that the “propaganda value” (i.e., the public relations boost) from a communications satellite would be minimal. 14 The term was coined years after Kelly’s reign, by Harvard professor Clayton Christensen. 15 J. R. Pierce and R. Kompfner, letter to M. J. Kelly, 8 October 1958. In Kompfner’s handwriting at the top it reads: “Copy given to J.R.P. who showed it to W.O.B. Not Sent.” J.R.P. is Pierce; W.O.B. is William (Bill) Baker. AT&T archives. 16 J. R. Pierce and R. Kompfner, “Proposal for Research Toward Satellite Communication,” January 6, 1959. AT&T archives. 17 Hugh L. Dryden, Deputy Administrator, NASA, letter to Mr.


pages: 482 words: 149,351

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

activist fund / activist shareholder / activist investor, Airbnb, airline deregulation, anti-communist, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, Blythe Masters, Boris Johnson, Bretton Woods, British Empire, business climate, business cycle, capital controls, carried interest, Cass Sunstein, Celtic Tiger, central bank independence, centre right, Clayton Christensen, cloud computing, corporate governance, corporate raider, creative destruction, Credit Default Swap, cross-subsidies, David Ricardo: comparative advantage, demographic dividend, Deng Xiaoping, desegregation, Donald Trump, Etonian, failed state, falling living standards, family office, financial deregulation, financial innovation, forensic accounting, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global supply chain, high net worth, income inequality, index fund, invisible hand, Jeff Bezos, Kickstarter, land value tax, late capitalism, light touch regulation, London Whale, Long Term Capital Management, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mont Pelerin Society, moral hazard, neoliberal agenda, Network effects, new economy, Northern Rock, offshore financial centre, old-boy network, out of africa, Paul Samuelson, plutocrats, Plutocrats, Ponzi scheme, price mechanism, purchasing power parity, pushing on a string, race to the bottom, regulatory arbitrage, rent-seeking, road to serfdom, Robert Bork, Ronald Coase, Ronald Reagan, shareholder value, sharing economy, Silicon Valley, Skype, smart grid, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, special economic zone, Steve Ballmer, Steve Jobs, The Chicago School, Thorstein Veblen, too big to fail, transfer pricing, wealth creators, white picket fence, women in the workforce, zero-sum game

A similar thing happened in Britain, but with a time lag: buyouts in the UK only really took off in the early 1990s. When the Harvard Business School embraced Jensen, explains Duff McDonald, it transformed itself from an institution seeking to create a body of enlightened business people into a cheerleader for Wall Street. ‘They basically threw in the towel and said, “Fuck it, let’s go for the money.”’ Not coincidentally their fundraising improved spectacularly. Clayton Christensen, a dissenting professor at the school who specialises in business innovation, explains how destructive the new thinking has been. ‘The professors of finance in the main business schools, the professors of economics have over the last forty years created a church. I call it the New Church of Finance. The doctrines are taught with the same force as the Catholic Church preaches their catechism.’7 He describes a zealotry of financial ratios or fractions, generating an obsession with maximising financial returns to capital.

For a deeper investigation, see Lynn Stout, The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public, Berret-Koehler, 2012; and Karen Ho, Liquidated, 2009, Chapter 3 and particularly p.124 onwards. 7. From ‘The New Church of Finance: Deeply held belief systems and complex codes must be changed’, Deseret News, 9 December 2012, and from my phone interview with Clayton Christensen, 24 May 2012. 8. As Eileen Appelbaum and Rosemary Batt put it in Private Equity at Work: When Wall Street Manages Main Street, Russel Sage Foundation, 2014, pp.7–8, ‘with the portfolio companies of most private equity firms located in many different industries, private equity’s expertise is typically financial, not operational’. 9. For the Wilbur Ross episode, see ibid. pp.206–9 and 233.


pages: 589 words: 147,053

The Age of Em: Work, Love and Life When Robots Rule the Earth by Robin Hanson

8-hour work day, artificial general intelligence, augmented reality, Berlin Wall, bitcoin, blockchain, brain emulation, business cycle, business process, Clayton Christensen, cloud computing, correlation does not imply causation, creative destruction, demographic transition, Erik Brynjolfsson, Ethereum, ethereum blockchain, experimental subject, fault tolerance, financial intermediation, Flynn Effect, hindsight bias, information asymmetry, job automation, job satisfaction, John Markoff, Just-in-time delivery, lone genius, Machinery of Freedom by David Friedman, market design, meta analysis, meta-analysis, Nash equilibrium, new economy, prediction markets, rent control, rent-seeking, reversible computing, risk tolerance, Silicon Valley, smart contracts, statistical model, stem cell, Thomas Malthus, trade route, Turing test, Vernor Vinge

In The Role of Demographics in Occupational Stress and Well Being (Research in Occupational Stress and Well-being, Volume 12), 235–283, edited by Pamela Perrewé, Christopher Rosen, and Jonathon Halbesleben. Emerald Group Publishing Limited. Thomas, Frank, and Ollie Johnston. 1981. The Illusion of Life: Disney Animation. Abbeville Press. Thompson, Ben. 2013. “What Clayton Christensen Got Wrong.” Stratechery blog, September 22. http://stratechery.com/2013/clayton-christensen-got-wrong/. Torelli, Carlos, and Andrew Kaikati. 2009. “Values as Predictors of Judgments and Behaviors: The Role of Abstract and Concrete Mindsets.” Journal of Personality and Social Psychology 96(1): 231–247. Tormala, Zakary, Jayson Jia, and Michael Norton. 2012. “The Preference for Potential.” Journal of Personality and Social Psychology 103(4): 567–583.


pages: 176 words: 55,819

The Start-Up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career by Reid Hoffman, Ben Casnocha

Airbnb, Andy Kessler, Black Swan, business intelligence, Cal Newport, Clayton Christensen, commoditize, David Brooks, Donald Trump, en.wikipedia.org, fear of failure, follow your passion, future of work, game design, Jeff Bezos, job automation, Joi Ito, late fees, lateral thinking, Marc Andreessen, Mark Zuckerberg, Menlo Park, out of africa, Paul Graham, paypal mafia, Peter Thiel, recommendation engine, Richard Bolles, risk tolerance, rolodex, shareholder value, side project, Silicon Valley, Silicon Valley startup, social web, Steve Jobs, Steve Wozniak, Tony Hsieh, transaction costs

ABZ Planning embraces recoverable failure so long as it generates real lessons. Think Two Steps Ahead Planning and adapting means thinking carefully about your future. Lunging at the first well-paid and/or high-status job you come upon may offer immediate gratification, but it won’t get you any closer to building a meaningful career. A goal that can be achieved in a single step is probably not very meaningful—or ambitious. The business professor Clayton Christensen once told graduating students at Harvard Business School, “If you study the root causes of business disasters, over and over you’ll find [a] predisposition toward endeavors that offer immediate gratification.” At the same time, though, don’t do the opposite and think ahead too far in the future. Again, you will change, the world will change, the competition will change. It’s why Plan C, Plan D, or Plan E are not part of this framework.


pages: 285 words: 58,517

The Network Imperative: How to Survive and Grow in the Age of Digital Business Models by Barry Libert, Megan Beck

active measures, Airbnb, Amazon Web Services, asset allocation, autonomous vehicles, big data - Walmart - Pop Tarts, business intelligence, call centre, Clayton Christensen, cloud computing, commoditize, crowdsourcing, disintermediation, diversification, Douglas Engelbart, Douglas Engelbart, future of work, Google Glasses, Google X / Alphabet X, Infrastructure as a Service, intangible asset, Internet of things, invention of writing, inventory management, iterative process, Jeff Bezos, job satisfaction, Kevin Kelly, Kickstarter, late fees, Lyft, Mark Zuckerberg, Oculus Rift, pirate software, ride hailing / ride sharing, self-driving car, sharing economy, Silicon Valley, Silicon Valley startup, six sigma, software as a service, software patent, Steve Jobs, subscription business, TaskRabbit, Travis Kalanick, uber lyft, Wall-E, women in the workforce, Zipcar

Most business leaders believe that the only way to generate more value is to make, market, and sell more of what they have or do. But that old thinking limits their profitability and growth. Many of our most admired companies won’t stand a chance when the most valuable digital networks take on their markets. Nigel Fenwick of Forrester Research said that by 2020, every organization will be either digital predator or digital prey.1 Your Strategy Needs a Business Model Face-Lift To return to the quote by Clayton Christensen at the start of this chapter, the problem is that most organizations don’t know where they are starting, much less where they are headed and how to get there. We wrote this book to help the leaders of traditional firms—those focused internally on using their own assets and employees to make, market, and sell—enter the world of digital network business models and leverage an external network to contribute its assets, ideas, skills, and relationships and share in the value created.


pages: 626 words: 167,836

The Technology Trap: Capital, Labor, and Power in the Age of Automation by Carl Benedikt Frey

"Robert Solow", 3D printing, autonomous vehicles, basic income, Bernie Sanders, Branko Milanovic, British Empire, business cycle, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, collective bargaining, computer age, computer vision, Corn Laws, creative destruction, David Graeber, David Ricardo: comparative advantage, deindustrialization, demographic transition, desegregation, deskilling, Donald Trump, easy for humans, difficult for computers, Edward Glaeser, Elon Musk, Erik Brynjolfsson, everywhere but in the productivity statistics, factory automation, falling living standards, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, game design, Gini coefficient, Hyperloop, income inequality, income per capita, industrial cluster, industrial robot, intangible asset, interchangeable parts, Internet of things, invention of agriculture, invention of movable type, invention of the steam engine, invention of the wheel, Isaac Newton, James Hargreaves, James Watt: steam engine, job automation, job satisfaction, job-hopping, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, labor-force participation, labour mobility, Loebner Prize, low skilled workers, Malcom McLean invented shipping containers, manufacturing employment, mass immigration, means of production, Menlo Park, minimum wage unemployment, natural language processing, new economy, New Urbanism, Norbert Wiener, oil shock, On the Economy of Machinery and Manufactures, Pareto efficiency, pattern recognition, pink-collar, Productivity paradox, profit maximization, Renaissance Technologies, rent-seeking, rising living standards, Robert Gordon, robot derives from the Czech word robota Czech, meaning slave, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, Simon Kuznets, social intelligence, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, trade route, Triangle Shirtwaist Factory, Turing test, union organizing, universal basic income, washing machines reduced drudgery, wealth creators, women in the workforce, working poor, zero-sum game

Eligible citizens may contribute up to $2,500 annually and can receive a refundable tax credit equal to 50 percent of the first $500 contributed and 25 percent of the next $2,000 for any given tax year. Workers can then use these funds at different stages in their career for training purposes, in response to replacement or to advance their careers more generally. Before scaling up such efforts, however, they need to be carefully evaluated. Major reforms to transform education and training might also be required more broadly. As Harvard University’s Clayton Christensen has forcefully argued, there is no particular reason why people with different learning requirements should have to conform to rigid academic programs that run for a specified period of time. The factory-based education model, which emerged in the aftermath of the Industrial Revolution, gradually expanded across many dimensions with more hours spent in school, more subjects covered, and more years of schooling.

ACKNOWLEDGMENTS If this book could be regarded as an invention, it would surely be a recombinant one. It draws upon a vast body of research to which numerous scholars have contributed. I guess my own journey to writing it began in my school years, when my father, Christopher, got back from a business trip with two new books for me. The first was Joel Mokyr’s The Lever of Riches. The second was Clayton Christensen’s The Innovator’s Dilemma. Their work showed me that long-term prosperity derives from technological innovation. But it also made abundantly clear that progress often comes with economic and societal disruption. My lifelong interest in the subject is thanks to my father. Over the past four years of writing, I have accumulated many debts. This book could not have been written without generous financial support from Citigroup.


pages: 272 words: 66,985

Hyperfocus: How to Be More Productive in a World of Distraction by Chris Bailey

"side hustle", Albert Einstein, Any sufficiently advanced technology is indistinguishable from magic, Cal Newport, Chuck Templeton: OpenTable:, Clayton Christensen, correlation does not imply causation, deliberate practice, functional fixedness, game design, knowledge economy, knowledge worker, Parkinson's law, randomized controlled trial, Richard Feynman, Skype, twin studies, Zipcar

In the last thirty years, more and more devices have crept into our lives. For me, the process started with my first laptop well over a decade ago. Later I bought a dumb feature phone and then an even more distracting smartphone. Next came an iPad and a fitness tracker. I’m sure there will be more devices in my future. This speaks to a trap we increasingly face: bringing new devices into our lives without first questioning their value. Clayton Christensen, a professor at Harvard Business School, developed a useful way of assessing the devices in your life: question what “jobs” you “hire” devices to do for you. Every product we buy should do a job for us—we hire Kleenex to blow our nose; Uber to get from one place to another; OpenTable to book a table at a restaurant; Match.com to find a partner. We hire our phones to do a lot of these “jobs,” maybe more than any other product we own.


pages: 222 words: 70,132

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy by Jonathan Taplin

1960s counterculture, affirmative action, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American Legislative Exchange Council, Apple's 1984 Super Bowl advert, back-to-the-land, barriers to entry, basic income, battle of ideas, big data - Walmart - Pop Tarts, bitcoin, Brewster Kahle, Buckminster Fuller, Burning Man, Clayton Christensen, commoditize, creative destruction, crony capitalism, crowdsourcing, data is the new oil, David Brooks, David Graeber, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Snowden, Elon Musk, equal pay for equal work, Erik Brynjolfsson, future of journalism, future of work, George Akerlof, George Gilder, Google bus, Hacker Ethic, Howard Rheingold, income inequality, informal economy, information asymmetry, information retrieval, Internet Archive, Internet of things, invisible hand, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Joseph Schumpeter, Kevin Kelly, Kickstarter, labor-force participation, life extension, Marc Andreessen, Mark Zuckerberg, Menlo Park, Metcalfe’s law, Mother of all demos, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, Norbert Wiener, offshore financial centre, packet switching, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, pre–internet, Ray Kurzweil, recommendation engine, rent-seeking, revision control, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Ross Ulbricht, Sam Altman, Sand Hill Road, secular stagnation, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, smart grid, Snapchat, software is eating the world, Steve Jobs, Stewart Brand, technoutopianism, The Chicago School, The Market for Lemons, The Rise and Fall of American Growth, Tim Cook: Apple, trade route, transfer pricing, Travis Kalanick, trickle-down economics, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, We wanted flying cars, instead we got 140 characters, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator

These enterprises cannot find sufficient opportunities to reinvest their cash because there is already overcapacity in many areas and because they are so productive that they are not creating new jobs and finding new consumers who might buy their products. As former treasury secretary Lawrence Summers has put it, “Lack of demand creates lack of supply.” Instead of making investments that could create new jobs, firms are now using their cash to buy back stock, which only increases economic inequality. 5. The Harvard Business School guru Clayton Christensen (The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail) argues, “Financial markets—and companies themselves—use assessment metrics that make innovations that eliminate jobs more attractive than those that create jobs.” Whereas the return on “efficiency innovations” is relatively quick, the more important “market-creating innovations,” which create entirely new industries that produce jobs, have a long time in which to return the investment.


pages: 260 words: 67,823

Always Day One: How the Tech Titans Plan to Stay on Top Forever by Alex Kantrowitz

accounting loophole / creative accounting, Albert Einstein, AltaVista, Amazon Web Services, augmented reality, Automated Insights, autonomous vehicles, Bernie Sanders, Clayton Christensen, cloud computing, collective bargaining, computer vision, Donald Trump, drone strike, Elon Musk, Firefox, Google Chrome, hive mind, income inequality, Infrastructure as a Service, inventory management, iterative process, Jeff Bezos, job automation, Jony Ive, knowledge economy, Lyft, Mark Zuckerberg, Menlo Park, new economy, Peter Thiel, QR code, ride hailing / ride sharing, self-driving car, Silicon Valley, Skype, Snapchat, Steve Ballmer, Steve Jobs, Steve Wozniak, Tim Cook: Apple, uber lyft, wealth creators, zero-sum game

If you sell dresses, for instance, supporting each design requires loads of execution work: pricing, sourcing, inventory management, sales, marketing, shipping, and returns. Additional support work props up these processes, including basic tasks in human resources, contracts, and accounting. The burden of execution work has made it nearly impossible for companies with one core business to develop and support another (Clayton Christensen calls this the “innovator’s dilemma”). Those who’ve tried have almost always pulled back, or found it impossible to sustain multiple businesses at once. “GM historically made many things other than cars,” Professor Ned Hill, an economist at Ohio State University, told me, citing refrigerators and locomotives. “They were an octopus, and they couldn’t manage it.” Drowning in execution work, today’s companies thus devote themselves to refinement, not invention.


pages: 733 words: 184,118

Tesla: Inventor of the Electrical Age by W. Bernard Carlson

1960s counterculture, Albert Einstein, Clayton Christensen, creative destruction, disruptive innovation, en.wikipedia.org, Henri Poincaré, invention of radio, Isaac Newton, James Watt: steam engine, Joseph Schumpeter, Menlo Park, packet switching, popular electronics, Robert Gordon, Ronald Reagan, Steve Jobs, Steve Wozniak, undersea cable, yellow journalism

Schumpeter was fascinated by the role that innovation played in the modern economy, and he emphasized in his writings that there were two kinds of innovative activity. On the one hand, there are the creative responses of entrepreneurs and inventors who introduce radically new products, processes, and services and in so doing wreak the creative destruction that Schumpeter regarded as a central characteristic of capitalism. More recently, Clayton Christensen has characterized Schumpeter’s creative responses as “disruptive innovations” in the sense that selected firms sometimes pursue technologies that disrupt the pattern of established industries and alter the everyday life of consumers.50 On the other hand, there are the adaptive responses of managers and engineers who undertake the steady and incremental work of establishing the corporate structures, manufacturing procedures, and marketing plans that allow products and services to be produced and consumed.51 Clearly the success of any economy—especially the United States in Tesla’s time, from 1870 to 1920—has depended on getting the right mix of creative and adaptive innovations.

What could a flighty visionary like Tesla teach us that is relevant to the modern economy? To respond to this challenge, we need to recall Schumpeter’s idea that economies grow as a result of two kinds of innovation (see Chapter 2). On one hand, there are the creative responses of entrepreneurs and inventors who introduce new products, processes, and services and in so doing dramatically change everyday life and reorder the industrial world; as Clayton Christensen has suggested, these can be called disruptive innovations.15 On the other hand, there are the adaptive responses of managers and engineers who undertake the steady and incremental work of establishing the corporate structures, manufacturing procedures, and marketing plans that allow products and services to be produced and consumed. Clearly the success of any economy depends on getting the right mix of disruptive and adaptive innovations.


pages: 612 words: 187,431

The Art of UNIX Programming by Eric S. Raymond

A Pattern Language, Albert Einstein, barriers to entry, bioinformatics, Clayton Christensen, combinatorial explosion, commoditize, correlation coefficient, David Brooks, Debian, domain-specific language, don't repeat yourself, Donald Knuth, Everything should be made as simple as possible, facts on the ground, finite state, general-purpose programming language, George Santayana, Innovator's Dilemma, job automation, Larry Wall, MVC pattern, pattern recognition, Paul Graham, peer-to-peer, premature optimization, pre–internet, publish or perish, revision control, RFC: Request For Comment, Richard Stallman, Robert Metcalfe, Steven Levy, transaction costs, Turing complete, Valgrind, wage slave, web application

The lesson for the future is that over-committing to any one technology or business model would be a mistake — and maintaining the adaptive flexibility of our software and the design tradition that goes with it is correspondingly imperative. Another lesson is this: Never bet against the cheap plastic solution. Or, equivalently, the low-end/high-volume hardware technology almost always ends up climbing the power curve and winning. The economist Clayton Christensen calls this disruptive technology and showed in The Innovator's Dilemma [Christensen] how this happened with disk drives, steam shovels, and motorcycles. We saw it happen as minicomputers displaced mainframes, workstations and servers replaced minis, and commodity Intel machines replaced workstations and servers. The open-source movement is winning by commoditizing software. To prosper, Unix needs to maintain the knack of co-opting the cheap plastic solution rather than trying to fight it.

Kirchhoff, J. A. Miller, J. M. Milner, R. W. Mitzw, E. P. Schan, N. O. Whittington, Henry Spencer, David Keppel, and Mark Brader. Recommended C Style and Coding Standards. 1990. An updated version of the Indian Hill C Style and Coding Standards paper, with modifications by the last three authors. It describes a recommended coding standard for C programs. Available on the Web. [Christensen] Clayton Christensen. The Innovator's Dilemma. HarperBusiness. 2000. ISBN 0-066-62069-4. The book that introduced the term “disruptive technology”. A fascinating and lucid examination of how and why technology companies doing everything right get mugged by upstarts. A business book technical people should read. [Comer] Unix Review. Douglas Comer. “Pervasive Unix: Cause for Celebration”. October 1985. p. 42.


pages: 381 words: 78,467

100 Plus: How the Coming Age of Longevity Will Change Everything, From Careers and Relationships to Family And by Sonia Arrison

23andMe, 8-hour work day, Albert Einstein, Anne Wojcicki, artificial general intelligence, attribution theory, Bill Joy: nanobots, bioinformatics, Clayton Christensen, dark matter, disruptive innovation, East Village, en.wikipedia.org, epigenetics, Frank Gehry, Googley, income per capita, indoor plumbing, Jeff Bezos, Johann Wolfgang von Goethe, Kickstarter, Law of Accelerating Returns, life extension, personalized medicine, Peter Thiel, placebo effect, post scarcity, Ray Kurzweil, rolodex, Silicon Valley, Simon Kuznets, Singularitarianism, smart grid, speech recognition, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, Steven Levy, Thomas Malthus, upwardly mobile, World Values Survey, X Prize

In fact, as implied earlier, because people will have longer health spans, there will likely be an increase in the amount of time they spend in training at the beginning of their lives as well as throughout their lives. This begs the question of whether educational delivery will change as our lives lengthen and we become more technologically sophisticated. Education likely will expand to offer more personalized instruction. In a recent book titled Disrupting Class, Clayton Christensen and his coauthors make a persuasive case that the future of education will become more tailored to individuals’ learning styles and levels. Whereas one student might learn best from rote memorization, another might be better off learning through an interactive game format or virtual reality system. Christensen sees better computers and software as the platform for providing this individualized training.


pages: 229 words: 72,431

Shadow Work: The Unpaid, Unseen Jobs That Fill Your Day by Craig Lambert

airline deregulation, Asperger Syndrome, banking crisis, Barry Marshall: ulcers, big-box store, business cycle, carbon footprint, cashless society, Clayton Christensen, cognitive dissonance, collective bargaining, Community Supported Agriculture, corporate governance, crowdsourcing, disintermediation, disruptive innovation, financial independence, Galaxy Zoo, ghettoisation, gig economy, global village, helicopter parent, IKEA effect, industrial robot, informal economy, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Mark Zuckerberg, new economy, pattern recognition, plutocrats, Plutocrats, recommendation engine, Schrödinger's Cat, Silicon Valley, single-payer health, statistical model, Thorstein Veblen, Turing test, unpaid internship, Vanguard fund, Vilfredo Pareto, zero-sum game, Zipcar

The product will probably not be as good as what a professional would produce, but it is good enough for many customers, and far less expensive. The shadow-working consumer simply customizes the template for her needs and goes ahead with it—planting the garden or going live with the new website. Such templates are examples of “disruptive innovation,” a term Harvard Business School professor Clayton Christensen coined in his landmark 1992 book The Innovator’s Dilemma. Disruptive innovation happens when a new company introduces a product that is cheaper, simpler, and/or faster than those on the market. Toyota and Honda, for example, disrupted Detroit’s Big Three automakers by bringing out cheaper, smaller, no-frills cars like the Corolla and Civic. The Japanese imports were not as good as Detroit’s models—not as powerful, safe, comfortable, or loaded with features—but they were good enough for many drivers at the low end of the market and far less expensive to buy and operate.


pages: 268 words: 75,850

The Formula: How Algorithms Solve All Our Problems-And Create More by Luke Dormehl

3D printing, algorithmic trading, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, big data - Walmart - Pop Tarts, call centre, Cass Sunstein, Clayton Christensen, commoditize, computer age, death of newspapers, deferred acceptance, disruptive innovation, Edward Lorenz: Chaos theory, Erik Brynjolfsson, Filter Bubble, Flash crash, Florence Nightingale: pie chart, Frank Levy and Richard Murnane: The New Division of Labor, Google Earth, Google Glasses, High speed trading, Internet Archive, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Kevin Kelly, Kodak vs Instagram, lifelogging, Marshall McLuhan, means of production, Nate Silver, natural language processing, Netflix Prize, Panopticon Jeremy Bentham, pattern recognition, price discrimination, recommendation engine, Richard Thaler, Rosa Parks, self-driving car, sentiment analysis, Silicon Valley, Silicon Valley startup, Slavoj Žižek, social graph, speech recognition, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, the scientific method, The Signal and the Noise by Nate Silver, upwardly mobile, Wall-E, Watson beat the top human players on Jeopardy!, Y Combinator

“One of the questions our work provokes is what happens to that cadre of folks just out of law school, who don’t have clients yet, who aren’t rainmakers—what are they going to do?” Kelly says, with a twinge of genuine pain in his voice. “In the old days there was tons of stuff around for them. It might not always have been exciting work, but at least it was available. Now guys like us can do a lot of that work just by using the right algorithm.” Divorce by Algorithm Business-management guru Clayton Christensen identifies two types of new technology: “sustaining” and “disruptive” innovations.19 A sustaining technology is something that supports or enhances the way a business or market already operates. A disruptive technology, on the other hand, fundamentally alters the way in which a particular sector functions. An example of the former might be something like the advent of computerized accounting systems, while the arrival of digital cameras (which famously led to the downfall of Kodak) represents the latter.


pages: 302 words: 73,581

Platform Scale: How an Emerging Business Model Helps Startups Build Large Empires With Minimum Investment by Sangeet Paul Choudary

3D printing, Airbnb, Amazon Web Services, barriers to entry, bitcoin, blockchain, business process, Chuck Templeton: OpenTable:, Clayton Christensen, collaborative economy, commoditize, crowdsourcing, cryptocurrency, data acquisition, frictionless, game design, hive mind, Internet of things, invisible hand, Kickstarter, Lean Startup, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, means of production, multi-sided market, Network effects, new economy, Paul Graham, recommendation engine, ride hailing / ride sharing, shareholder value, sharing economy, Silicon Valley, Skype, Snapchat, social graph, social software, software as a service, software is eating the world, Spread Networks laid a new fibre optics cable between New York and Chicago, TaskRabbit, the payments system, too big to fail, transport as a service, two-sided market, Uber and Lyft, Uber for X, uber lyft, Wave and Pay

” — ABC MORNINGS RADIO TALK SHOW, Australian Radio, at the G20 World Summit 2014 “An excellent source for managers to develop platform thinking and stay up-to-date on the dynamics of platform-based markets.” — PROF. FENG ZHU, Professor, Harvard Business School “A forefront researcher into how businesses can better use metadata and current technology.” — 4BC 1116 NEWS TALK, Australian Radio, at the G20 World Summit 2014 “Sangeet is one of the deepest thinkers I know. He has helped countless startups understand and unlock their core value as platform businesses. His work sits next to Clayton Christensen and Geoffrey Moore.” — MENG WONG, Co-founder, JFDI “One of the best innovation strategists in the world and an expert on building platforms. His work is a must-read for entrepreneurs, investors, and innovators worldwide.” — KEVIN DEWALT, Former EIR at NSF and Founder, SoHelpful.Me “Sangeet’s work provides amazing insight into the success and failure of todays business models, a resource that entrepreneurs and innovators cannot afford to ignore


pages: 491 words: 77,650

Humans as a Service: The Promise and Perils of Work in the Gig Economy by Jeremias Prassl

3D printing, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, Andrei Shleifer, autonomous vehicles, barriers to entry, call centre, cashless society, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, disruptive innovation, Donald Trump, Erik Brynjolfsson, full employment, future of work, George Akerlof, gig economy, global supply chain, hiring and firing, income inequality, information asymmetry, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kickstarter, low skilled workers, Lyft, Mahatma Gandhi, Mark Zuckerberg, market friction, means of production, moral hazard, Network effects, new economy, obamacare, pattern recognition, platform as a service, Productivity paradox, race to the bottom, regulatory arbitrage, remote working, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Rosa Parks, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley ideology, Simon Singh, software as a service, Steve Jobs, TaskRabbit, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, transaction costs, transportation-network company, Travis Kalanick, two tier labour market, two-sided market, Uber and Lyft, Uber for X, uber lyft, union organizing, working-age population

Rather ironically, Didi, in turn, already owns stakes in several of Uber’s key competitors, including Lyft in the United States and Ola in India: Leslie Hook, ‘Uber makes a U-turn in China as subsidy war ends in Didi deal’, Financial Times (1 August 2016), http://www.ft.com/content/ 7f6e251a-5801-11e6-9f70-badea1b336d4, archived at https://perma.cc/2MYF- JJ3X; Ma Fangjing and Charles Clover, ‘Uber shares soar after Didi deal’, Financial Times (2 August 2016), http://www.ft.com/content/54217d94-5892- 11e6-8d05-4eaa66292c32, archived at https://perma.cc/E4LJ-86NX 29. Clayton Christensen, Michael Raynor, and Rory McDonald, ‘What is dis- ruptive innovation?’, Harvard Business Review (December 2015), https://hbr. * * * 154 Notes org/2015/12/what-is-disruptive-innovation, archived at https://perma.cc/ YUW5-UY2P 30. Ibid. 31. Paul Bradley Carr, ‘Travis shrugged: the creepy, dangerous ideology behind Silicon Valley’s cult of disruption’, Pando (24 October 2012), https://pando.


Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game by Walker Deibel

barriers to entry, Clayton Christensen, commoditize, deliberate practice, discounted cash flows, diversification, Elon Musk, family office, financial independence, high net worth, intangible asset, inventory management, Jeff Bezos, knowledge worker, Lean Startup, Mark Zuckerberg, meta analysis, meta-analysis, Network effects, new economy, Peter Thiel, risk tolerance, risk/return, rolodex, software as a service, Steve Jobs, supply-chain management, Y Combinator

He was able to identify an enormous opportunity to offer hospitals art consulting and design services, along with the custom framing manufacturing he already did. This expanded his current offering to fill an additional customer need, expanding the company into “blue ocean” territory. UNDERSTANDING INNOVATION Often, entrepreneurship is often associated with disrupting existing industries with innovation. In Clayton Christensen’s book The Innovator’s Dilemma, the Harvard professor beautifully illustrates the relationship between existing and disruptive technologies through mapping the quality level of the product over time. Mature markets often operate at a quality level above what is required by customers, eliminating quality issues between competitors, while emerging technologies are usually ignored by industry incumbents because the quality level is too low for offering to existing customers.


pages: 255 words: 76,495

The Facebook era: tapping online social networks to build better products, reach new audiences, and sell more stuff by Clara Shih

business process, call centre, Clayton Christensen, cloud computing, commoditize, conceptual framework, corporate governance, crowdsourcing, glass ceiling, jimmy wales, Mark Zuckerberg, Metcalfe’s law, Network effects, pets.com, pre–internet, rolodex, semantic web, sentiment analysis, Silicon Valley, Silicon Valley startup, social graph, social web, software as a service, Tony Hsieh, web application

In the process, companies came and went—Netscape, CompuServe, Webvan, Napster, Pets.com, to name a few. Nor should you expect that the kings of today’s era will reign in tomorrow’s era. More likely, the kings don’t see it coming, don’t want to see it coming, or see it coming but can’t get organizationally aligned around doing anything about it. This is a classic example of the innovator’s dilemma, a concept introduced by Harvard Business School Professor Clayton Christensen to describe the inability of most large companies to embrace radically new technologies because they are disruptive to the existing business. Look at what happened to Eastman Kodak, the dominant player in photography for many decades. As the digital photography revolution was unfolding in the late nineties and into this century, Kodak was still seeing the vast majority of its profits come from its slowly declining but still extremely compelling print film business.


pages: 307 words: 17,123

Behind the cloud: the untold story of how Salesforce.com went from idea to billion-dollar company--and revolutionized an industry by Marc Benioff, Carlye Adler

Albert Einstein, Apple's 1984 Super Bowl advert, barriers to entry, Bay Area Rapid Transit, business continuity plan, call centre, carbon footprint, Clayton Christensen, cloud computing, corporate social responsibility, crowdsourcing, iterative process, Maui Hawaii, Nicholas Carr, platform as a service, Silicon Valley, software as a service, Steve Ballmer, Steve Jobs

Leveraging the power of trainers has allowed us to have thousands of developers creating new functionality, sharing it in our online marketplace, and enabling us to offer a more comprehensive service to our customers. 253 BEHIND THE CLOUD Think about the partners that might recommend your service and the vendors that might build complementary products; then, do everything you can to strengthen the entire ecosystem that surrounds your company. In doing so, you can turn a handful of disjointed partners into a thriving community of supporters, innovators, and evangelists that will further your success. 254 The Final Play Play #111: Make Everyone Successful A little over a decade ago, Clayton Christensen wrote a book called The Innovator’s Dilemma. It illustrated how a start-up company—by employing innovation that disrupts existing business models—will always beat the established big companies. He cited examples like Intel’s success with the microprocessor and the steel mill Nucor’s hit with its revolutionary way to reuse scrap. The book was loathed by the old-line folks and lauded by the new guys like me.


pages: 252 words: 78,780

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us by Dan Lyons

Airbnb, Amazon Web Services, Apple II, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, business process, call centre, Clayton Christensen, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, cryptocurrency, David Heinemeier Hansson, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, full employment, future of work, gig economy, Gordon Gekko, greed is good, hiring and firing, housing crisis, income inequality, informal economy, Jeff Bezos, job automation, job satisfaction, job-hopping, John Gruber, Joseph Schumpeter, Kevin Kelly, knowledge worker, Lean Startup, loose coupling, Lyft, Marc Andreessen, Mark Zuckerberg, McMansion, Menlo Park, Milgram experiment, minimum viable product, Mitch Kapor, move fast and break things, move fast and break things, new economy, Panopticon Jeremy Bentham, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, precariat, RAND corporation, remote working, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, Ruby on Rails, Sam Altman, Sand Hill Road, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, Skype, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, Stanford prison experiment, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, TaskRabbit, telemarketer, Tesla Model S, Thomas Davenport, Tony Hsieh, Toyota Production System, traveling salesman, Travis Kalanick, tulip mania, Uber and Lyft, Uber for X, uber lyft, universal basic income, web application, Whole Earth Catalog, Y Combinator, young professional

Later came Michael Porter, a Harvard business professor who claimed to have developed a methodology that would enable companies to create sustainable advantages using his Five Forces Framework. Porter launched a consulting company, Monitor Group, which raked in enormous fees from corporate clients—until, somehow, in 2013 the bottom fell out and Monitor Group went bankrupt. After Drucker and Porter came Clayton Christensen, a Harvard professor who achieved business guru status with a 1997 book, The Innovator’s Dilemma. Gary Hamel wrote The Future of Management and talked about Management 2.0. Jim Collins explained how to go from Good to Great. Renée Mauborgne and W. Chan Kim wrote Blue Ocean Strategy. If you work in the corporate world you’ve undoubtedly heard of these books. Combined, they have sold tens of millions of copies.


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

agricultural Revolution, Airbnb, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, large denomination, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, technoutopianism, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

Telegrams and telephones By 1884 Western Union was a giant: it was one of only eleven stocks used to create the first Dow Jones Transportation Average in 1884, although I suppose you might argue that its decline began well before that when, in 1876, it turned down the opportunity to buy Bell’s patents on the telephone for $100,000. Bell instead used these patents, which are often called the most valuable patents in history, to set up his own phone company: a company that was grossing a million dollars per annum well before the Dow Jones started. Yet at the time, Western Union management were making the right decision on the basis of the information available to them. As Clayton Christensen points out, it is very difficult for an incumbent to justify investment in new technology when it creates a different business model because it will always earn more in the short term from investing in its core business; competitors have asymmetric motivation (Christensen et al. 2005). And naturally, if the incumbent asks its customers what they want, they will direct the investment in the same direction.


pages: 316 words: 87,486

Listen, Liberal: Or, What Ever Happened to the Party of the People? by Thomas Frank

Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American ideology, barriers to entry, Berlin Wall, Bernie Sanders, blue-collar work, Burning Man, centre right, circulation of elites, Clayton Christensen, collective bargaining, Credit Default Swap, David Brooks, deindustrialization, disruptive innovation, Donald Trump, Edward Snowden, Fall of the Berlin Wall, financial innovation, Frank Gehry, full employment, George Gilder, gig economy, Gini coefficient, income inequality, Jaron Lanier, Jeff Bezos, knowledge economy, knowledge worker, Lean Startup, mandatory minimum, Marc Andreessen, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, microcredit, mobile money, moral panic, mortgage debt, Nelson Mandela, new economy, obamacare, payday loans, Peter Thiel, plutocrats, Plutocrats, Ponzi scheme, post-industrial society, postindustrial economy, pre–internet, profit maximization, profit motive, race to the bottom, Republic of Letters, Richard Florida, ride hailing / ride sharing, Ronald Reagan, sharing economy, Silicon Valley, Steve Jobs, Steven Levy, TaskRabbit, Thorstein Veblen, too big to fail, Travis Kalanick, Uber for X, union organizing, urban decay, women in the workforce, Works Progress Administration, young professional

It is the reason Northeastern University has a “venture accelerator” it calls IDEA; that Harvard has the famous Innovation Center; that Boston University’s business school has a Department of Strategy and Innovation; that its College of Engineering has a Product Innovation Center; and that one of its colleges offers a certificate in Innovation and Entrepreneurship. At Harvard, where I met innovation guru Clayton Christensen ambling across a parking lot, the dream of being the next Mark Zuckerberg or Bill Gates is almost palpable. As well as the usual incubators and accelerators, the school boasts a $100 million venture capital fund that is focused on commercializing the ideas of former students.19 One of this fund’s press releases quotes a Harvard professor on how this heap of money advances the school’s “mission,” which today (apparently) includes “marshaling significant resources to help create thrilling companies.”


pages: 304 words: 80,143

The Autonomous Revolution: Reclaiming the Future We’ve Sold to Machines by William Davidow, Michael Malone

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, agricultural Revolution, Airbnb, American Society of Civil Engineers: Report Card, Automated Insights, autonomous vehicles, basic income, bitcoin, blockchain, blue-collar work, Bob Noyce, business process, call centre, cashless society, citizen journalism, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, cryptocurrency, disintermediation, disruptive innovation, distributed ledger, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Francis Fukuyama: the end of history, Geoffrey West, Santa Fe Institute, gig economy, Gini coefficient, Hyperloop, income inequality, industrial robot, Internet of things, invention of agriculture, invention of movable type, invention of the printing press, invisible hand, Jane Jacobs, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, license plate recognition, Lyft, Mark Zuckerberg, mass immigration, Network effects, new economy, peer-to-peer lending, QWERTY keyboard, ransomware, Richard Florida, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Simon Kuznets, Snapchat, speech recognition, Stuxnet, TaskRabbit, The Death and Life of Great American Cities, The Rise and Fall of American Growth, the scientific method, trade route, Turing test, Uber and Lyft, uber lyft, universal basic income, uranium enrichment, urban planning, zero day, zero-sum game, Zipcar

Companies have to provide them with health insurance, retirement benefits, vacations, time off for emergencies, and pay them when they come to work, even if there is no work to do. So, in a sense, the Uber and TaskRabbit business models are ideal for employers. The beauty of it is that the free market sets the value of the work done by the non-core employees. Since the company takes a cut of what the contractors make, its fixed costs are very low. WHEN SUCCESS MEANS SMALLER In 1997, Clayton Christensen published one of the most influential business books of all time, The Innovator’s Dilemma. He describes how the very processes that enable market leaders to succeed also set them up for failure when disruptive new products and technologies appear. A common reason is that the market for a new service is too small to meet its needs for growth, so the large company doesn’t pay much attention to it—until that market explodes, led by a suddenly powerful new competitor.


pages: 245 words: 83,272

Artificial Unintelligence: How Computers Misunderstand the World by Meredith Broussard

1960s counterculture, A Declaration of the Independence of Cyberspace, Ada Lovelace, AI winter, Airbnb, Amazon Web Services, autonomous vehicles, availability heuristic, barriers to entry, Bernie Sanders, bitcoin, Buckminster Fuller, Chris Urmson, Clayton Christensen, cloud computing, cognitive bias, complexity theory, computer vision, crowdsourcing, Danny Hillis, DARPA: Urban Challenge, digital map, disruptive innovation, Donald Trump, Douglas Engelbart, easy for humans, difficult for computers, Electric Kool-Aid Acid Test, Elon Musk, Firefox, gig economy, global supply chain, Google Glasses, Google X / Alphabet X, Hacker Ethic, Jaron Lanier, Jeff Bezos, John von Neumann, Joi Ito, Joseph-Marie Jacquard, life extension, Lyft, Mark Zuckerberg, mass incarceration, Minecraft, minimum viable product, Mother of all demos, move fast and break things, move fast and break things, Nate Silver, natural language processing, PageRank, payday loans, paypal mafia, performance metric, Peter Thiel, price discrimination, Ray Kurzweil, ride hailing / ride sharing, Ross Ulbricht, Saturday Night Live, school choice, self-driving car, Silicon Valley, speech recognition, statistical model, Steve Jobs, Steven Levy, Stewart Brand, Tesla Model S, the High Line, The Signal and the Noise by Nate Silver, theory of mind, Travis Kalanick, Turing test, Uber for X, uber lyft, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, women in the workforce

Alexander and West, The New Jim Crow. 11. Hern, “Silk Road Successor DarkMarket Rebrands as OpenBazaar.” 12. Brown, “Nearly a Third of Millennials Have Used Venmo to Pay for Drugs.” 13. Newman, “Who’s Buying Drugs, Sex, and Booze on Venmo? This Site Will Tell You.” III Working Together 10 On the Startup Bus Technochauvinists love disruptive innovation. Popularized by Harvard Business School professor Clayton Christensen in his 1997 book The Innovator’s Dilemma, disruptive innovation is allegedly the technological tidal wave that sweeps away the competition and results in huge profits. Innovation—and disruption, come to think of it—is usually connected to young people. Ask an executive who he imagines as the ultimate innovator, and odds are he’ll paint a picture of a twenty-something computer genius in a hoodie who’s writing code to make the next billion-dollar startup.


pages: 319 words: 89,477

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion by John Hagel Iii, John Seely Brown

Albert Einstein, Andrew Keen, barriers to entry, Black Swan, business process, call centre, Clayton Christensen, cleantech, cloud computing, commoditize, corporate governance, creative destruction, disruptive innovation, Elon Musk, en.wikipedia.org, future of work, game design, George Gilder, intangible asset, Isaac Newton, job satisfaction, Joi Ito, knowledge economy, knowledge worker, loose coupling, Louis Pasteur, Malcom McLean invented shipping containers, Maui Hawaii, medical residency, Network effects, old-boy network, packet switching, pattern recognition, peer-to-peer, pre–internet, profit motive, recommendation engine, Ronald Coase, shareholder value, Silicon Valley, Skype, smart transportation, software as a service, supply-chain management, The Nature of the Firm, the new new thing, too big to fail, trade liberalization, transaction costs

As we become more comfortable with our ability to achieve our potential at these levels, we will begin to see more and more opportunities to amplify our potential even further by reshaping broader and broader arenas. We will also have more insight into, and experience with, the pull techniques required to pursue shaping strategies. How Shaping Strategies Are Different from Other Strategies Shaping strategies differ significantly from other well-known strategies. Clayton Christensen and Michael Raynor have painted a very compelling picture of the potential to pursue disruptive innovation strategies.9 These strategies can generate enormous wealth for the innovator but, in general, they are different from the strategies we are discussing on two important dimensions. First, they often involve a single company making significant commitments to a disruptive innovation in technology or business design, rather than an individual or group bringing together very large numbers of companies to make complementary investments.


pages: 353 words: 91,520

Most Likely to Succeed: Preparing Our Kids for the Innovation Era by Tony Wagner, Ted Dintersmith

affirmative action, Airbnb, Albert Einstein, Bernie Sanders, Clayton Christensen, creative destruction, David Brooks, en.wikipedia.org, Frederick Winslow Taylor, future of work, immigration reform, income inequality, index card, Jeff Bezos, jimmy wales, Joi Ito, Khan Academy, Kickstarter, knowledge economy, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, means of production, new economy, pattern recognition, Paul Graham, Peter Thiel, Ponzi scheme, pre–internet, school choice, Silicon Valley, Skype, Steven Pinker, TaskRabbit, the scientific method, uber lyft, unpaid internship, Y Combinator

Other priorities—higher rankings, growing enrollment, winning teams, bigger and better facilities, more revenue from sideline businesses, more research grants—have replaced learning as the primary touchstone for decision making.4 Meanwhile, the college “market” is being profoundly disrupted by the availability of free or low-cost online courses and alternate pathways for acquiring job skills, as we’ll see in chapter 7. Business guru Clayton Christensen believes that, because the value proposition for college has declined so radically and the finances of many colleges are so shaky, “15 years from now half of US universities may be in bankruptcy.”5 (We’re a little more optimistic than our friend Clayton. We believe that many will become assisted living homes!) When the two of us went to college decades ago, its combined overall cost (all four years of tuition, room, and board) was generally in line with typical first-year starting salaries.


pages: 330 words: 88,445

The Rise of Superman: Decoding the Science of Ultimate Human Performance by Steven Kotler

Albert Einstein, Any sufficiently advanced technology is indistinguishable from magic, Clayton Christensen, data acquisition, delayed gratification, deliberate practice, fear of failure, Google Earth, haute couture, impulse control, Isaac Newton, Jeff Bezos, jimmy wales, Kevin Kelly, Lao Tzu, lateral thinking, life extension, lifelogging, low earth orbit, Maui Hawaii, pattern recognition, Ray Kurzweil, risk tolerance, rolodex, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, Stanford marshmallow experiment, Steve Jobs, Walter Mischel, X Prize

In 2004, when Barbara Walters interviewed Page and Brin, she asked if the fact that their parents were both college professors was the major reason for their success. Page felt otherwise: “We both went to Montessori schools, and I think it was part of that training of not following rules and orders, and being self-motivated, questioning what’s going on in the world, doing things a little bit differently.” they too found a Montessori connection: Jeffrey Dyer, Hal Gregersen, and Clayton Christensen, “The Innovator’s DNA,” Harvard Business Review, December 2009. 179 “Go back to Roger Bannister’s time”: Mike Gervais, AI, April 2013. 180 “The idea was to develop”: Leslie Sherlin, AI, February 2013. “quantified Self” devices: Lila Battis, “Fitness Trackers Compared!” Men’s Health. See: http://www.menshealth.com/techlust/new-fitness-trackers. 181 Hugh Herr, the head of the biomechatronics: Steven Kotler, “Bionic Man,” Playboy, June 2012.


pages: 326 words: 91,559

Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy by Nathan Schneider

1960s counterculture, Affordable Care Act / Obamacare, Airbnb, altcoin, Amazon Mechanical Turk, back-to-the-land, basic income, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Brewster Kahle, Burning Man, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Clayton Christensen, collaborative economy, collective bargaining, Community Supported Agriculture, corporate governance, creative destruction, crowdsourcing, cryptocurrency, Debian, disruptive innovation, do-ocracy, Donald Knuth, Donald Trump, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, Food sovereignty, four colour theorem, future of work, gig economy, Google bus, hydraulic fracturing, Internet Archive, Jeff Bezos, jimmy wales, joint-stock company, Joseph Schumpeter, Julian Assange, Kickstarter, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, mass immigration, means of production, multi-sided market, new economy, offshore financial centre, old-boy network, Peter H. Diamandis: Planetary Resources, post-work, precariat, premature optimization, pre–internet, profit motive, race to the bottom, Richard Florida, Richard Stallman, ride hailing / ride sharing, Sam Altman, Satoshi Nakamoto, self-driving car, shareholder value, sharing economy, Silicon Valley, Slavoj Žižek, smart contracts, Steve Jobs, Steve Wozniak, Stewart Brand, transaction costs, Turing test, Uber and Lyft, uber lyft, underbanked, undersea cable, universal basic income, Upton Sinclair, Vanguard fund, white flight, Whole Earth Catalog, WikiLeaks, women in the workforce, working poor, Y Combinator, Y2K, Zipcar

This talk has become so pervasive that we neglect to notice what the word means—what it means and has meant, for instance, in Detroit. There, Jimmy Boggs saw disruption decades ago, when a brew of robots, racism, and imports from Asia shut down the city’s factories, and when what remained of the auto industry fled to the whiter suburbs—consigning that capital of black America into decline and collapse. The jargon of disruption derives from a more precise academic concept. Harvard Business School professor Clayton Christensen began honing what he came to call “disruptive innovation” in the mid-1990s and early 2000s, referring to how a simple development, often from an oblique end of a market, can refashion the rules of the market in which it operates.5 In this way, the cheaper, less-mighty cars from Japan took on Detroit’s Cadillacs. It’s how Kodak invented the first digital camera in the 1970s but, by clinging to film, collapsed into bankruptcy by the hand of its own invention.


pages: 372 words: 92,477

The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge

Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, Martin Wolf, means of production, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, Plutocrats, popular capitalism, profit maximization, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Silicon Valley, Skype, special economic zone, too big to fail, total factor productivity, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game

A decade or so ago these Indian pioneers would have been nothing more than an interesting sideshow to health-care reformers in the West. Today their ideas are gaining traction as governments everywhere look to save money. Reform, a British think tank dedicated to reforming the basic building blocks of the welfare state and with close ties to Downing Street, has championed Shetty and Aravind. Clayton Christensen of the Harvard Business School, perhaps the world’s most respected writer on innovation, thinks the public sector will be upset by what he calls “mutants”—new organisms spinning out of it. The point about the mutants is that they come from anywhere. Christensen’s mutants can dethrone powerful producer groups. The Indian health-care revolution is not only about mass production. It is about rethinking the role of doctors.


pages: 322 words: 88,197

Wonderland: How Play Made the Modern World by Steven Johnson

Ada Lovelace, Alfred Russel Wallace, Antoine Gombaud: Chevalier de Méré, Berlin Wall, bitcoin, Book of Ingenious Devices, Buckminster Fuller, Claude Shannon: information theory, Clayton Christensen, colonial exploitation, computer age, conceptual framework, crowdsourcing, cuban missile crisis, Drosophila, Edward Thorp, Fellow of the Royal Society, game design, global village, Hedy Lamarr / George Antheil, HyperCard, invention of air conditioning, invention of the printing press, invention of the telegraph, Islamic Golden Age, Jacquard loom, Jacques de Vaucanson, James Watt: steam engine, Jane Jacobs, John von Neumann, joint-stock company, Joseph-Marie Jacquard, land value tax, Landlord’s Game, lone genius, mass immigration, megacity, Minecraft, moral panic, Murano, Venice glass, music of the spheres, Necker cube, New Urbanism, Oculus Rift, On the Economy of Machinery and Manufactures, pattern recognition, peer-to-peer, pets.com, placebo effect, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, QWERTY keyboard, Ray Oldenburg, spice trade, spinning jenny, statistical model, Steve Jobs, Steven Pinker, Stewart Brand, supply-chain management, talking drums, the built environment, The Great Good Place, the scientific method, The Structural Transformation of the Public Sphere, trade route, Turing machine, Turing test, Upton Sinclair, urban planning, Victor Gruen, Watson beat the top human players on Jeopardy!, white flight, white picket fence, Whole Earth Catalog, working poor, Wunderkammern

The process happened faster than it did in the days of West End illusion, but the underlying pattern was the same: early experiments, followed by explosive diversity, followed by radical consolidation. The innovation that triumphs at the end of this sequence is often inferior in many ways to its rivals: remember that cinema, for all its advantages, lacked color for its first fifty years, and even in the age of 3-D IMAX, movies lack the 360-degree vista of the Panorama. But cinema was not a classic Clayton Christensen–style disruption where an inferior but cheap new product wipes out a more fully featured but expensive rival. As alluring as the mechanical dancers were at Merlin’s, no one mistook them for genuine human beings. Once you could project images of actual people onto the screen—dancing and gesticulating and emoting, even without color or sound—the appeal of magic-lantern specters dissolved into thin air.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Whatever their cultural impact, Facebook, Twitter, and their successors may not have viable long-term economic models. Further underlying the nature of modern innovation, in 2015 Ashley Madison, an online site for people seeking extramarital affairs, announced plans to raise US$200 million to expand the market for adultery. Industrial revolution 3 emphasizes disruptive technologies, a term associated with Harvard professor Clayton Christensen and his influential 1997 book The Innovator's Dilemma. It differentiated between sustainable innovations, which improve products and make valuable changes for a firm's current customers, and disruptive innovations—cheaper, poorer-quality products that initially target less profitable customers so as to undercut existing businesses, with the object of eventually dominating the industry. In a vituperative exchange characteristic of academic cloisters, historian Jill Lepore criticized Christensen's heavily marketed and promoted thesis, arguing that his hand-picked case studies did not support the theory.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

"Robert Solow", 3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, disruptive innovation, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, post-work, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, uber lyft, very high income, working-age population

Value in society is increasingly built on ideas, and the firms that do best in this society are those that can manipulate ideas most effectively. The information-processing role of the firm can help us to understand the phenomenon of ‘disruption’, in which older businesses struggle to adapt to powerful new technologies or market opportunities. The notion of a ‘disruptive’ technology was first described in detail by Clayton Christensen, a scholar at Harvard Business School.4 Disruption is one of the most important ideas in business and management to emerge over the last generation. A disruptive innovation, in Christensen’s sense, is one that is initially not very good, in the sense that it does badly on the performance metrics that industry leaders care about, but which then catches on rapidly, wrong-footing older firms and upending the industry.


The End of Accounting and the Path Forward for Investors and Managers (Wiley Finance) by Feng Gu

active measures, Affordable Care Act / Obamacare, barriers to entry, business cycle, business process, buy and hold, Claude Shannon: information theory, Clayton Christensen, commoditize, conceptual framework, corporate governance, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, disruptive innovation, diversified portfolio, double entry bookkeeping, Exxon Valdez, financial innovation, fixed income, hydraulic fracturing, index fund, information asymmetry, intangible asset, inventory management, Joseph Schumpeter, Kenneth Arrow, knowledge economy, moral hazard, new economy, obamacare, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, race to the bottom, risk/return, Robert Shiller, Robert Shiller, shareholder value, Steve Jobs, The Great Moderation, value at risk

All respondents to the annual “Business R&D and Innovation Survey,” conducted by the National Science Foundation with the Census Bureau—essentially all US companies conducting R&D—routinely report this classification, along with other important details related to R&D. But you won’t find this important information in financial reports. 9. In 2013, almost 6,500 patent infringement lawsuits were filed in the United States (PricewaterhouseCoopers, 2014 Patent Litigation Study, at www.pwc .com). 10. The classic on disruption: Clayton Christensen, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Boston: Harvard Business School Press, 1997). 11. See Internal Control—Integrated Framework, Committee of Sponsoring Organizations of the Treadway Commission, December 2011, at www.ic.coso.org (“Risk assessment also requires management to consider the impact of possible changes in the external environment . . . ” p. 51). 12.


pages: 344 words: 94,332

The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

3D printing, Airbnb, assortative mating, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, delayed gratification, disruptive innovation, diversification, Downton Abbey, Erik Brynjolfsson, falling living standards, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, longitudinal study, low skilled workers, Lyft, Nelson Mandela, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, Second Machine Age, sharing economy, side project, Silicon Valley, smart cities, Stanford marshmallow experiment, Stephen Hawking, Steve Jobs, The Future of Employment, uber lyft, women in the workforce, young professional

In order to support those destined to live long lives, the agenda faced by educational institutions is fourfold: how to incorporate new learning technologies and experiential learning; how to break down boundaries between age groups; how to think more deeply about ways to teach creativity, innovation, humanity and empathy; and how to rapidly expand practical specialisms in order to ensure that education wins in its race against technology. It is no surprise therefore that Harvard Business School Professor Clayton Christensen argues that technology makes education ripe for ‘disruptive innovation’, and that this will have a positive impact on lifelong learning. Investments in digital innovations will transform the classroom, with online teaching, MOOCs, digital degrees and certifications with new providers and new entrants. Looking forward, Jane and her cohort will find an ever-increasing array of options for how, what and where they study, and at what price.


pages: 915 words: 232,883

Steve Jobs by Walter Isaacson

air freight, Albert Einstein, Apple II, Apple's 1984 Super Bowl advert, big-box store, Bob Noyce, Buckminster Fuller, Byte Shop, centre right, Clayton Christensen, cloud computing, commoditize, computer age, computer vision, corporate governance, death of newspapers, don't be evil, Douglas Engelbart, Dynabook, El Camino Real, Electric Kool-Aid Acid Test, fixed income, game design, Golden Gate Park, Hacker Ethic, hiring and firing, Jeff Bezos, Johannes Kepler, John Markoff, Jony Ive, lateral thinking, Mark Zuckerberg, Menlo Park, Mitch Kapor, Mother of all demos, Paul Terrell, profit maximization, publish or perish, Richard Feynman, Robert Metcalfe, Robert X Cringely, Ronald Reagan, Silicon Valley, skunkworks, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, supply-chain management, thinkpad, Tim Cook: Apple, Wall-E, Whole Earth Catalog

Jobs, on the other hand, would not license out Apple’s FairPlay to other device makers; it worked only on an iPod. Nor would he allow other online stores to sell songs for use on iPods. A variety of experts said this would eventually cause Apple to lose market share, as it did in the computer wars of the 1980s. “If Apple continues to rely on a proprietary architecture,” the Harvard Business School professor Clayton Christensen told Wired, “the iPod will likely become a niche product.” (Other than in this case, Christensen was one of the world’s most insightful business analysts, and Jobs was deeply influenced by his book The Innovator’s Dilemma.) Bill Gates made the same argument. “There’s nothing unique about music,” he said. “This story has played out on the PC.” Rob Glaser, the founder of RealNetworks, tried to circumvent Apple’s restrictions in July 2004 with a service called Harmony.

So we wrote all of these apps—iPhoto, iMovie, iTunes—and tied in our devices, like the iPod and iPhone and iPad, and it’s worked brilliantly. But over the next few years, the hub is going to move from your computer into the cloud. So it’s the same digital hub strategy, but the hub’s in a different place. It means you will always have access to your content and you won’t have to sync. It’s important that we make this transformation, because of what Clayton Christensen calls “the innovator’s dilemma,” where people who invent something are usually the last ones to see past it, and we certainly don’t want to be left behind. I’m going to take MobileMe and make it free, and we’re going to make syncing content simple. We are building a server farm in North Carolina. We can provide all the syncing you need, and that way we can lock in the customer. Jobs discussed this vision at his Monday morning meetings, and gradually it was refined to a new strategy.


pages: 347 words: 97,721

Only Humans Need Apply: Winners and Losers in the Age of Smart Machines by Thomas H. Davenport, Julia Kirby

AI winter, Andy Kessler, artificial general intelligence, asset allocation, Automated Insights, autonomous vehicles, basic income, Baxter: Rethink Robotics, business intelligence, business process, call centre, carbon-based life, Clayton Christensen, clockwork universe, commoditize, conceptual framework, dark matter, David Brooks, deliberate practice, deskilling, digital map, disruptive innovation, Douglas Engelbart, Edward Lloyd's coffeehouse, Elon Musk, Erik Brynjolfsson, estate planning, fixed income, follow your passion, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, game design, general-purpose programming language, global pandemic, Google Glasses, Hans Lippershey, haute cuisine, income inequality, index fund, industrial robot, information retrieval, intermodal, Internet of things, inventory management, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joi Ito, Khan Academy, knowledge worker, labor-force participation, lifelogging, longitudinal study, loss aversion, Mark Zuckerberg, Narrative Science, natural language processing, Norbert Wiener, nuclear winter, pattern recognition, performance metric, Peter Thiel, precariat, quantitative trading / quantitative finance, Ray Kurzweil, Richard Feynman, risk tolerance, Robert Shiller, Robert Shiller, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, six sigma, Skype, social intelligence, speech recognition, spinning jenny, statistical model, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, superintelligent machines, supply-chain management, transaction costs, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, Works Progress Administration, Zipcar

CareerSearch, “Career Advice on How to Become an Insurance Underwriter,” http://www.careersearch.com/careers/real-estate-and-insurance/insurance-underwriter/. 13. Mike Batty and Alice Kroll, “Automated Life Underwriting: A Survey of Life Insurance Utilization of Automated Underwriting Systems,” prepared for the Society of Actuaries, 2009, file:///C:/Users/jkirby/Downloads/research-life-auto-underwriting.pdf. 14. Thomas Arnett, “How Technology Displaces Teachers’ Jobs,” Clayton Christensen Institute for Disruptive Innovation, November 19, 2014, http://www.christenseninstitute.org/how-technology-displaces-teachers-jobs/#sthash.PyjrVrNk.dpuf. 15. David Port, “Reckoning with Robo-Advisors,” LifeHealthPRO, December 31, 2014, http://www.lifehealthpro.com/2014/12/31/reckoning-with-robo-advisors. Chapter 4: Stepping Up 1. “Statement of Ronald J. Cathcart,” Hearing Before the United States Senate Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs, April 13, 2010, https://www.hsgac.senate.gov/downloads/stmt-cathcart-ronald-april-13-2010-psi-fin-crisis-hrg. 2.


pages: 443 words: 98,113

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay by Guy Standing

3D printing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Asian financial crisis, asset-backed security, bank run, banking crisis, basic income, Ben Bernanke: helicopter money, Bernie Sanders, Big bang: deregulation of the City of London, bilateral investment treaty, Bonfire of the Vanities, Boris Johnson, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, cashless society, central bank independence, centre right, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, credit crunch, crony capitalism, crowdsourcing, debt deflation, declining real wages, deindustrialization, disruptive innovation, Doha Development Round, Donald Trump, Double Irish / Dutch Sandwich, ending welfare as we know it, eurozone crisis, falling living standards, financial deregulation, financial innovation, Firefox, first-past-the-post, future of work, gig economy, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, housing crisis, income inequality, information retrieval, intangible asset, invention of the steam engine, investor state dispute settlement, James Watt: steam engine, job automation, John Maynard Keynes: technological unemployment, labour market flexibility, light touch regulation, Long Term Capital Management, lump of labour, Lyft, manufacturing employment, Mark Zuckerberg, market clearing, Martin Wolf, means of production, mini-job, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, Neil Kinnock, non-tariff barriers, North Sea oil, Northern Rock, nudge unit, Occupy movement, offshore financial centre, oil shale / tar sands, open economy, openstreetmap, patent troll, payday loans, peer-to-peer lending, plutocrats, Plutocrats, Ponzi scheme, precariat, quantitative easing, remote working, rent control, rent-seeking, ride hailing / ride sharing, Right to Buy, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Altman, savings glut, Second Machine Age, secular stagnation, sharing economy, Silicon Valley, Silicon Valley startup, Simon Kuznets, sovereign wealth fund, Stephen Hawking, Steve Ballmer, structural adjustment programs, TaskRabbit, The Chicago School, The Future of Employment, the payments system, The Rise and Fall of American Growth, Thomas Malthus, Thorstein Veblen, too big to fail, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, Y Combinator, zero-sum game, Zipcar

Many platforms claim to be part of a new ‘sharing economy’ that is boosting efficiency and incomes through increased utilisation of underused assets. However, they are in fact expanding the scope of commodified labour and the amount of unpaid work-for-labour, as we will see. All bypass the firm as traditionally understood. They are creating ‘platform capitalism’. In a seminal book, The Innovator’s Dilemma, Clayton Christensen argued that innovation was ‘disruptive’ if it had the potential to generate new products or services or to deliver them in radically new ways.3 He and colleagues later claimed that the provision of services through digital platforms did not meet two criteria for disruptive innovation – that the innovation must target the low end of an existing market and mainly draw in non-consumers of existing options.4 But digital platforms surely qualify as disruptive on both counts.


pages: 359 words: 96,019

How to Turn Down a Billion Dollars: The Snapchat Story by Billy Gallagher

Airbnb, Albert Einstein, Amazon Web Services, Apple's 1984 Super Bowl advert, augmented reality, Bernie Sanders, Black Swan, citizen journalism, Clayton Christensen, computer vision, disruptive innovation, Donald Trump, El Camino Real, Elon Musk, Frank Gehry, Google Glasses, Hyperloop, information asymmetry, Jeff Bezos, Justin.tv, Lean Startup, Long Term Capital Management, Mark Zuckerberg, Menlo Park, minimum viable product, Nelson Mandela, Oculus Rift, paypal mafia, Peter Thiel, QR code, Sand Hill Road, Saturday Night Live, side project, Silicon Valley, Silicon Valley startup, Snapchat, social graph, sorting algorithm, speech recognition, stealth mode startup, Steve Jobs, too big to fail, Y Combinator, young professional

“Embracing change” isn’t enough. It has to be so hardwired into who we are that even talking about it seems redundant. The Internet is not a friendly place. Things that don’t stay relevant don’t even get the luxury of leaving ruins. They disappear. Like any good religion, the cult-like startup world has a holy scripture: The Innovator’s Dilemma, a 1997 book by Harvard Business School professor Clayton Christensen. Christensen wrote the book before “disruptive innovation” was a punchline on the HBO comedy Silicon Valley, and it has managed to maintain its revered status for two decades. We can see the core concept of The Innovator’s Dilemma at work in Snapchat’s story: a new entrant makes a product that is so far beneath what an incumbent does that it seems silly—why would we waste our time down there?


pages: 328 words: 96,141

Rocket Billionaires: Elon Musk, Jeff Bezos, and the New Space Race by Tim Fernholz

Amazon Web Services, autonomous vehicles, business climate, Charles Lindbergh, Clayton Christensen, cloud computing, Colonization of Mars, corporate governance, corporate social responsibility, disruptive innovation, Donald Trump, Elon Musk, high net worth, Iridium satellite, Jeff Bezos, Kickstarter, low earth orbit, Marc Andreessen, Mark Zuckerberg, minimum viable product, multiplanetary species, mutually assured destruction, new economy, nuclear paranoia, paypal mafia, Peter H. Diamandis: Planetary Resources, Peter Thiel, pets.com, planetary scale, private space industry, profit maximization, RAND corporation, Richard Feynman, Richard Feynman: Challenger O-ring, Ronald Reagan, shareholder value, Silicon Valley, skunkworks, sovereign wealth fund, Stephen Hawking, Steve Jobs, trade route, undersea cable, We wanted flying cars, instead we got 140 characters, X Prize, Y2K

The six finalists were all new space companies, and a committee of NASA officials evaluated each company in three areas: the feasibility of its technology, whether it had the potential to become a sustainable business in the future, and its prospects for obtaining financing outside of the government. The NASA team sought help answering the latter two questions by recruiting Alan Marty, who had worked at several tech companies and then led a team of venture capitalists at J. P. Morgan. Marty’s job was to help NASA’s executives get into an entrepreneurial mind-set. He brought dozens of copies of Clayton Christensen’s book The Innovator’s Dilemma—an iconic Silicon Valley tome about how stagnant companies are disrupted by start-ups armed with outside-the-box thinking—to hand out at every NASA meeting he participated in. With Marty guiding the financial evaluation and Lindenmoyer on the technical side, NASA began considering its options. SpaceX’s pitch stood out initially, for a number of reasons. Thanks to Musk’s personal wealth, it had already gotten a good start in developing a new rocket engine, the Merlin, and a launch vehicle, Falcon 1, which had undergone one test flight already, albeit a failed one.


pages: 463 words: 105,197

Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Eric Posner, E. Weyl

3D printing, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, anti-communist, augmented reality, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, business process, buy and hold, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collective bargaining, commoditize, Corn Laws, corporate governance, crowdsourcing, cryptocurrency, Donald Trump, Elon Musk, endowment effect, Erik Brynjolfsson, Ethereum, feminist movement, financial deregulation, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, guest worker program, hydraulic fracturing, Hyperloop, illegal immigration, immigration reform, income inequality, income per capita, index fund, informal economy, information asymmetry, invisible hand, Jane Jacobs, Jaron Lanier, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, labor-force participation, laissez-faire capitalism, Landlord’s Game, liberal capitalism, low skilled workers, Lyft, market bubble, market design, market friction, market fundamentalism, mass immigration, negative equity, Network effects, obamacare, offshore financial centre, open borders, Pareto efficiency, passive investing, patent troll, Paul Samuelson, performance metric, plutocrats, Plutocrats, pre–internet, random walk, randomized controlled trial, Ray Kurzweil, recommendation engine, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Rory Sutherland, Second Machine Age, second-price auction, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, special economic zone, spectrum auction, speech recognition, statistical model, stem cell, telepresence, Thales and the olive presses, Thales of Miletus, The Death and Life of Great American Cities, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, trickle-down economics, Uber and Lyft, uber lyft, universal basic income, urban planning, Vanguard fund, women in the workforce, Zipcar

In his 2016 landmark sociological study of urban housing in the United States, Evicted, sociologist Matthew Desmond suggests that landlords in poor neighborhoods often buy up enough housing to have substantial power to drive up rents by holding units vacant and artificially depressing supply.55 Yet as far as we know, no antitrust case has ever been brought against such local but potentially devastating attempts at monopolization. Another growing area where antitrust goes underenforced is the digital economy. Competition there often happens through the sort of “disruption” highlighted by business scholar Clayton Christensen in his 1997 classic The Innovator’s Dilemma, where entry by a new firm or product changes the nature of the market rather than produces a better or cheaper version of an existing product.56 For example, Facebook is currently probably the most important competitor of Google (for user attention and advertiser dollars), but began in a completely unrelated business (of social networking as opposed to search functions).


pages: 289

Hustle and Gig: Struggling and Surviving in the Sharing Economy by Alexandrea J. Ravenelle

"side hustle", active transport: walking or cycling, Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, barriers to entry, basic income, Broken windows theory, call centre, Capital in the Twenty-First Century by Thomas Piketty, cashless society, Clayton Christensen, clean water, collaborative consumption, collective bargaining, creative destruction, crowdsourcing, disruptive innovation, Downton Abbey, East Village, Erik Brynjolfsson, full employment, future of work, gig economy, Howard Zinn, income inequality, informal economy, job automation, low skilled workers, Lyft, minimum wage unemployment, Mitch Kapor, Network effects, new economy, New Urbanism, obamacare, Panopticon Jeremy Bentham, passive income, peer-to-peer, peer-to-peer model, performance metric, precariat, rent control, ride hailing / ride sharing, Ronald Reagan, sharing economy, Silicon Valley, strikebreaker, TaskRabbit, telemarketer, the payments system, Tim Cook: Apple, transaction costs, Travis Kalanick, Triangle Shirtwaist Factory, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, Upton Sinclair, urban planning, very high income, white flight, working poor, Zipcar

In Silicon Valley, to hack is based on the arrogant view that perceived value is “only in that which you contribute, fundamentally eviscerating the person or process that preceded your intervention. In this view—and it is not insignificant—the idea of hacking comes from a position of arrogance.”99 Likewise, Silicon Valley’s favorite phrase, “let’s break shit,” is part of Schumpeter’s “creative destruction,” a theory of economic progress in which new business rises like a phoenix from the ashes of old business.100 Creative destruction has also been described as an early version of Clayton Christensen’s hypothesis of “disruptive innovation,” in which economies flourish when start-ups replace established firms.101 And of course, to disrupt the status quo of established industries is part of the goal of the sharing economy. When the term sharing economy first entered the public lexicon, the sharing economy itself looked like a step forward. Instead of having to compete with the Joneses and step onto in the “consumer escalator,” workers could end the cycle of “work and spend” by participating in collaborative consumption in which expensive products, like riding lawn mowers, were shared with the community.102 By spending less money, workers could minimize their financial needs and increase their leisure time, spending more time with family and friends and reducing the growing trend of “bowling alone.”103 Sharing would replace spending in a newly collaborative world and further reduce the McDonaldization of everything.104 The sharing economy was a step forward, a way out, a solution to corporate dependency and workers’ loss of workplace autonomy.


pages: 358 words: 106,729

Fault Lines: How Hidden Fractures Still Threaten the World Economy by Raghuram Rajan

accounting loophole / creative accounting, Andrei Shleifer, Asian financial crisis, asset-backed security, assortative mating, bank run, barriers to entry, Bernie Madoff, Bretton Woods, business climate, business cycle, Clayton Christensen, clean water, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, diversification, Edward Glaeser, financial innovation, fixed income, floating exchange rates, full employment, global supply chain, Goldman Sachs: Vampire Squid, illegal immigration, implied volatility, income inequality, index fund, interest rate swap, Joseph Schumpeter, Kenneth Rogoff, knowledge worker, labor-force participation, Long Term Capital Management, longitudinal study, market bubble, Martin Wolf, medical malpractice, microcredit, money market fund, moral hazard, new economy, Northern Rock, offshore financial centre, open economy, price stability, profit motive, Real Time Gross Settlement, Richard Florida, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, school vouchers, short selling, sovereign wealth fund, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, upwardly mobile, Vanguard fund, women in the workforce, World Values Survey

National Council for Volunteer Organizations and United for a Fair Economy, cited in Alberto Alesina and Edward Glaeser, Fighting Poverty in the US and Europe (Oxford: Oxford University Press, 2004), 45. 10 See, for example, Joe Peek and Eric S. Rosengren, “Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan,” American Economic Review 95, no. 4 (September 2005): 1144–66; Takeo Hoshi and Anil Kashyap, Corporate Financing and Governance in Japan: The Road to the Future (Cambridge, MA: MIT Press, 2004). 11 See “A Fork in the Road,” Financial Times, December 11, 2009. 12 See, for example, Clayton Christensen, The Innovator’s Dilemma (New York: Harper Paperbacks, 2003). 13 National Science Foundation, Science and Engineering Indicators, chapter 5, Appendix Table 5–43, National Science Foundation, www.nsf.gov/statistics/seind10/c5/ c5s4.htm, accessed March 10, 2010. 14 Alesina and Glaeser, Fighting Poverty, 19. 15 Talkin’ ’bout My Generation: The Economic Impact of Aging U.S. Baby Boomers, McKinsey Global Institute, Washington, DC, 2008. 16 See, for example, Louis Hartz, The Liberal Tradition in America (San Diego, CA: Harvest HBJ, 1991). 17 Alesina and Glaeser, Fighting Poverty, 197. 18 See Theda Skocpol, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, MA: Belknap Press, 1992), 50. 19 See Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists (Princeton, NJ: Princeton University Press, 2004). 20 See Alesina and Glaeser, Fighting Poverty. 21 See Jacob S.


pages: 416 words: 106,532

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond by Chris Burniske, Jack Tatar

Airbnb, altcoin, asset allocation, asset-backed security, autonomous vehicles, bitcoin, blockchain, Blythe Masters, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, correlation coefficient, creative destruction, Credit Default Swap, credit default swaps / collateralized debt obligations, cryptocurrency, disintermediation, distributed ledger, diversification, diversified portfolio, Donald Trump, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, fiat currency, financial innovation, fixed income, George Gilder, Google Hangouts, high net worth, Jeff Bezos, Kenneth Rogoff, Kickstarter, Leonard Kleinrock, litecoin, Marc Andreessen, Mark Zuckerberg, market bubble, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, Network effects, packet switching, passive investing, peer-to-peer, peer-to-peer lending, Peter Thiel, pets.com, Ponzi scheme, prediction markets, quantitative easing, RAND corporation, random walk, Renaissance Technologies, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, Sharpe ratio, Silicon Valley, Simon Singh, Skype, smart contracts, social web, South Sea Bubble, Steve Jobs, transaction costs, tulip mania, Turing complete, Uber for X, Vanguard fund, WikiLeaks, Y2K

For instance, if Bitcoin influences how remittances are handled, what impact may that have on stocks like Western Union, a remittances kingpin? If Ethereum takes off as a decentralized world computer, will that have any effect on companies with cloud computing offerings, such as Amazon, Microsoft, and Google? If companies can get paid more quickly and with lower transaction fees using the latest cryptocurrency, will that have an impact on credit card providers like Visa and American Express? EXPONENTIAL DISRUPTION Clayton Christensen, a professor at Harvard Business School, wrote the seminal text on how large companies, often referred to as incumbents, struggle with maneuvering around exponential change. In The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Christensen makes no qualms about how even the most well managed of firms can fail when confronted with a technology that threatens to disrupt their market.


pages: 385 words: 111,113

Augmented: Life in the Smart Lane by Brett King

23andMe, 3D printing, additive manufacturing, Affordable Care Act / Obamacare, agricultural Revolution, Airbnb, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, Apple II, artificial general intelligence, asset allocation, augmented reality, autonomous vehicles, barriers to entry, bitcoin, blockchain, business intelligence, business process, call centre, chief data officer, Chris Urmson, Clayton Christensen, clean water, congestion charging, crowdsourcing, cryptocurrency, deskilling, different worldview, disruptive innovation, distributed generation, distributed ledger, double helix, drone strike, Elon Musk, Erik Brynjolfsson, Fellow of the Royal Society, fiat currency, financial exclusion, Flash crash, Flynn Effect, future of work, gig economy, Google Glasses, Google X / Alphabet X, Hans Lippershey, Hyperloop, income inequality, industrial robot, information asymmetry, Internet of things, invention of movable type, invention of the printing press, invention of the telephone, invention of the wheel, James Dyson, Jeff Bezos, job automation, job-hopping, John Markoff, John von Neumann, Kevin Kelly, Kickstarter, Kodak vs Instagram, Leonard Kleinrock, lifelogging, low earth orbit, low skilled workers, Lyft, M-Pesa, Mark Zuckerberg, Marshall McLuhan, megacity, Metcalfe’s law, Minecraft, mobile money, money market fund, more computing power than Apollo, Network effects, new economy, obamacare, Occupy movement, Oculus Rift, off grid, packet switching, pattern recognition, peer-to-peer, Ray Kurzweil, RFID, ride hailing / ride sharing, Robert Metcalfe, Satoshi Nakamoto, Second Machine Age, selective serotonin reuptake inhibitor (SSRI), self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, smart transportation, Snapchat, social graph, software as a service, speech recognition, statistical model, stem cell, Stephen Hawking, Steve Jobs, Steve Wozniak, strong AI, TaskRabbit, technological singularity, telemarketer, telepresence, telepresence robot, Tesla Model S, The Future of Employment, Tim Cook: Apple, trade route, Travis Kalanick, Turing complete, Turing test, uber lyft, undersea cable, urban sprawl, V2 rocket, Watson beat the top human players on Jeopardy!, white picket fence, WikiLeaks

So unless we create entirely new industries based on demand for services that don’t exist today, it’s likely that we’ll see significant issues with employment growth. What sort of disruption to employment and wealth will come over the next 20 to 30 years as we emerge into a new age? ____________ 1 The term “disruption” is often overused today. When we refer to “disruption”, we generally refer to disruptive innovations that fill unmet or future needs or created entirely new markets, and in doing so displace incumbents who fail to adapt (see Clayton Christensen’s The Innovator’s Dilemma). 2 In this case, until 25 per cent adoption in the US economy 3 “This is the best iPhone yet!” All Apple® and iPhone® trademarks are the property of Apple Inc. 4 “Cramming more components onto integrated circuits” by Gordon E. Moore was published in Electronics on 19 April 1965. 5 Gardiner Hubbard and Thomas Sanders 6 The equivalent of US$2.5 million in 2010 7 Gerald Sussman.


pages: 406 words: 109,794

Range: Why Generalists Triumph in a Specialized World by David Epstein

Airbnb, Albert Einstein, Apple's 1984 Super Bowl advert, Atul Gawande, Checklist Manifesto, Claude Shannon: information theory, Clayton Christensen, clockwork universe, cognitive bias, correlation does not imply causation, Daniel Kahneman / Amos Tversky, deliberate practice, Exxon Valdez, Flynn Effect, Freestyle chess, functional fixedness, game design, Isaac Newton, Johannes Kepler, knowledge economy, lateral thinking, longitudinal study, Louis Pasteur, Mark Zuckerberg, medical residency, meta analysis, meta-analysis, Mikhail Gorbachev, Nelson Mandela, Netflix Prize, pattern recognition, Paul Graham, precision agriculture, prediction markets, premature optimization, pre–internet, random walk, randomized controlled trial, retrograde motion, Richard Feynman, Richard Feynman: Challenger O-ring, Silicon Valley, Stanford marshmallow experiment, Steve Jobs, Steve Wozniak, Steven Pinker, Walter Mischel, Watson beat the top human players on Jeopardy!, Y Combinator, young professional

“If I can speak without fear of being misunderstood,” the president explained, “I would like to say that Nintendo is not producing next-generation game consoles.” The Wii used extremely simple games and technology from a previous console, but motion-based controls were a literal game changer. Given its basic hardware, the Wii was criticized as not innovative. Harvard Business School professor Clayton Christensen argued that it was actually the most important kind of innovation, an “empowering innovation”—one that creates both new customers and new jobs, like the rise of personal computers before it—because it brought video games to an entirely new (often older) audience. Nintendo “simply innovated in a different way,” Christensen and a colleague wrote. “It understood that the barrier to new consumers using video game systems was the complexity of game play, not the quality of existing graphics.”


pages: 416 words: 108,370

Hit Makers: The Science of Popularity in an Age of Distraction by Derek Thompson

Airbnb, Albert Einstein, Alexey Pajitnov wrote Tetris, always be closing, augmented reality, Clayton Christensen, Donald Trump, Downton Abbey, full employment, game design, Gordon Gekko, hindsight bias, indoor plumbing, industrial cluster, information trail, invention of the printing press, invention of the telegraph, Jeff Bezos, John Snow's cholera map, Kodak vs Instagram, linear programming, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Metcalfe’s law, Minecraft, Nate Silver, Network effects, Nicholas Carr, out of africa, randomized controlled trial, recommendation engine, Robert Gordon, Ronald Reagan, Silicon Valley, Skype, Snapchat, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Steven Pinker, subscription business, telemarketer, the medium is the message, The Rise and Fall of American Growth, Uber and Lyft, Uber for X, uber lyft, Vilfredo Pareto, Vincenzo Peruggia: Mona Lisa, women in the workforce

“the cathode-ray tube had out-and-out scooped the newspapers”: Will Fowler, Reporters: Memoirs of a Young Newspaperman (Malibu, CA: Roundtable, 1991), 160–61. “the television convention”: “Television Convention,” Newsweek, July 14, 1952. “informality, feeling, and emotion”: Karla Gower, Public Relations and the Press: The Troubled Embrace (Chicago: Northwestern University Press, 2007), 29. an upstart company will topple: Clayton Christensen, The Innovator’s Dilemma (New York: Harvard Business Review Press, 1997). My sentence here is an impressionistic reframing of Christensen’s thesis. It is, without question, informed by The Innovator’s Dilemma, but it’s not really an attempt to summarize the book. newspapers sold per person plummeted: Ken Goldstein, “Sixty Years of Daily Newspaper Circulation Trends,” Canadian Journalism Project, 2011.


pages: 309 words: 114,984

The Digital Doctor: Hope, Hype, and Harm at the Dawn of Medicine’s Computer Age by Robert Wachter

"Robert Solow", activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, AI winter, Airbnb, Atul Gawande, Captain Sullenberger Hudson, Checklist Manifesto, Chuck Templeton: OpenTable:, Clayton Christensen, collapse of Lehman Brothers, computer age, creative destruction, crowdsourcing, deskilling, disruptive innovation, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Google Glasses, Ignaz Semmelweis: hand washing, Internet of things, job satisfaction, Joseph Schumpeter, Kickstarter, knowledge worker, lifelogging, medical malpractice, medical residency, Menlo Park, minimum viable product, natural language processing, Network effects, Nicholas Carr, obamacare, pattern recognition, peer-to-peer, personalized medicine, pets.com, Productivity paradox, Ralph Nader, RAND corporation, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, Skype, Snapchat, software as a service, Steve Jobs, Steven Levy, the payments system, The Wisdom of Crowds, Thomas Bayes, Toyota Production System, Uber for X, US Airways Flight 1549, Watson beat the top human players on Jeopardy!, Yogi Berra

Moreover, watching her work taught me how great journalists operate: how hard you have to dig to get a complex story straight; how crucial it is to be fair without being timid; how important it is to check your ego at the door when receiving feedback (“This is not a PhD thesis!!!” was typical of the notes from Katie I’d find in the margin); how landing a single great quote or fresh insight from an hour-long interview represents a stunning success. For this book and so much more, I owe her everything. Notes Preface xi that long-awaited “disruptive innovation” This concept was described by Clayton Christensen in C. Christensen, The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business (Boston: Harvard Business Review Press, 1997). For its relevance to healthcare, see C. M. Christensen, J. H. Grossman, and J. Hwang, The Innovator’s Prescription: A Disruptive Solution for Health Care (New York: McGraw-Hill, 2009). xii I even blog and tweet My blog is Wachter’s World, and it can be found at www.wachtersworld.org.


pages: 424 words: 115,035

How Will Capitalism End? by Wolfgang Streeck

accounting loophole / creative accounting, Airbnb, basic income, Ben Bernanke: helicopter money, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, Clayton Christensen, collective bargaining, conceptual framework, corporate governance, creative destruction, credit crunch, David Brooks, David Graeber, debt deflation, deglobalization, deindustrialization, disruptive innovation, en.wikipedia.org, eurozone crisis, failed state, financial deregulation, financial innovation, first-past-the-post, fixed income, full employment, Gini coefficient, global reserve currency, Google Glasses, haute cuisine, income inequality, information asymmetry, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, labour mobility, late capitalism, liberal capitalism, market bubble, means of production, moral hazard, North Sea oil, offshore financial centre, open borders, pension reform, plutocrats, Plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, post-industrial society, private sector deleveraging, profit maximization, profit motive, quantitative easing, reserve currency, rising living standards, Robert Gordon, savings glut, secular stagnation, shareholder value, sharing economy, sovereign wealth fund, The Future of Employment, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transaction costs, Uber for X, upwardly mobile, Vilfredo Pareto, winner-take-all economy, Wolfgang Streeck

Merton, ‘The Matthew Effect in Science’, Science, vol. 159, no. 3810, 1968, pp. 56–63. 60And social theory shifts, or drifts, from institutionalism to rational choice, to the extent that it desires to be affirmative, or to biological behaviourism. 61Hans Gerth and C. Wright Mills, Character and Social Structure: The Psychology of Social Institutions, New York: Harcourt, Brace 1953. 62The term was invented by Clayton Christensen (The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, Boston, MA: Harvard Business Review Press 1997) and subsequently became vastly popular among business school academics and managers. For a critical assessment see Jill Lepore, ‘The Disruption Machine: What the gospel of innovation gets wrong’, New Yorker, 23 June 2014. In management discourse, the concept is associated especially with platform firms like Uber, Alibaba, Airbnb and Amazon, which have in common that they have ceased to offer their workers regular employment.


pages: 484 words: 114,613

No Filter: The Inside Story of Instagram by Sarah Frier

Airbnb, Amazon Web Services, blockchain, Clayton Christensen, cloud computing, cryptocurrency, Donald Trump, Elon Musk, Frank Gehry, Jeff Bezos, Marc Andreessen, Mark Zuckerberg, Menlo Park, Minecraft, move fast and break things, move fast and break things, Network effects, new economy, Oculus Rift, Peter Thiel, ride hailing / ride sharing, side project, Silicon Valley, Silicon Valley startup, Snapchat, Steve Jobs, TaskRabbit, Tony Hsieh, Travis Kalanick, ubercab, Zipcar

Though the first half of 2018 had been marked by public criticism, the most heated debate among the internal team was about something else: Zuckerberg’s “family of apps” plan. Cox told Zuckerberg he needed to let the products build independently and not become too similar. “They’ll compete a bit with each other, but if we have more unique brands, we’ll be able to reach different kinds of users.” He and Systrom had spoken extensively about using Harvard professor Clayton Christensen’s “jobs to be done” theory of product development, which states that consumers “hire” a product to do a certain task, and that its builders should be thinking about that clear purpose when they build. Facebook was for text, news, and links, for example, and Instagram was for posting visual moments and following interests. But that wasn’t how Zuckerberg thought of it. “We should think of this globally,” Zuckerberg said.


pages: 389 words: 112,319

Think Like a Rocket Scientist by Ozan Varol

Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, Amazon Web Services, Andrew Wiles, Apple's 1984 Super Bowl advert, Arthur Eddington, autonomous vehicles, Ben Horowitz, Cal Newport, Clayton Christensen, cloud computing, Colonization of Mars, dark matter, delayed gratification, different worldview, discovery of DNA, double helix, Elon Musk, fear of failure, functional fixedness, Gary Taubes, George Santayana, Google Glasses, Google X / Alphabet X, Inbox Zero, index fund, Isaac Newton, James Dyson, Jeff Bezos, job satisfaction, Johannes Kepler, Kickstarter, knowledge worker, late fees, lateral thinking, lone genius, longitudinal study, Louis Pasteur, low earth orbit, Marc Andreessen, Mars Rover, meta analysis, meta-analysis, move fast and break things, move fast and break things, multiplanetary species, obamacare, Occam's razor, out of africa, Peter Thiel, Pluto: dwarf planet, Ralph Waldo Emerson, Richard Feynman, Richard Feynman: Challenger O-ring, Ronald Reagan, Sam Altman, Schrödinger's Cat, Search for Extraterrestrial Intelligence, self-driving car, Silicon Valley, Simon Singh, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Upton Sinclair, Vilfredo Pareto, We wanted flying cars, instead we got 140 characters, Whole Earth Catalog, women in the workforce, Yogi Berra

He pitched the idea to some of the best people at JPL and got them on board. In less than four weeks—a record time for designing a mission—they put together a mission concept using Pathfinder’s landing system. The proposal eventually became reality. NASA selected Adler’s design largely because it had the highest probability of getting the spacecraft safely to Mars. “Every answer,” Harvard Business School professor Clayton Christensen says, “has a question that retrieves it.”11 The answer is often embedded within the question itself, so the framing of the question becomes crucial to the solution. Charles Darwin would agree. “Looking back,” he wrote in a letter to a friend, “I think it was more difficult to see what the problems were than to solve them.”12 Think of questions as different camera lenses. Put on a wide-angle lens, and you’ll capture the entire scene.


pages: 413 words: 119,587

Machines of Loving Grace: The Quest for Common Ground Between Humans and Robots by John Markoff

"Robert Solow", A Declaration of the Independence of Cyberspace, AI winter, airport security, Apple II, artificial general intelligence, Asilomar, augmented reality, autonomous vehicles, basic income, Baxter: Rethink Robotics, Bill Duvall, bioinformatics, Brewster Kahle, Burning Man, call centre, cellular automata, Chris Urmson, Claude Shannon: information theory, Clayton Christensen, clean water, cloud computing, collective bargaining, computer age, computer vision, crowdsourcing, Danny Hillis, DARPA: Urban Challenge, data acquisition, Dean Kamen, deskilling, don't be evil, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dynabook, Edward Snowden, Elon Musk, Erik Brynjolfsson, factory automation, From Mathematics to the Technologies of Life and Death, future of work, Galaxy Zoo, Google Glasses, Google X / Alphabet X, Grace Hopper, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, haute couture, hive mind, hypertext link, indoor plumbing, industrial robot, information retrieval, Internet Archive, Internet of things, invention of the wheel, Jacques de Vaucanson, Jaron Lanier, Jeff Bezos, job automation, John Conway, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, knowledge worker, Kodak vs Instagram, labor-force participation, loose coupling, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, medical residency, Menlo Park, Mitch Kapor, Mother of all demos, natural language processing, new economy, Norbert Wiener, PageRank, pattern recognition, pre–internet, RAND corporation, Ray Kurzweil, Richard Stallman, Robert Gordon, Rodney Brooks, Sand Hill Road, Second Machine Age, self-driving car, semantic web, shareholder value, side project, Silicon Valley, Silicon Valley startup, Singularitarianism, skunkworks, Skype, social software, speech recognition, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, strong AI, superintelligent machines, technological singularity, Ted Nelson, telemarketer, telepresence, telepresence robot, Tenerife airport disaster, The Coming Technological Singularity, the medium is the message, Thorstein Veblen, Turing test, Vannevar Bush, Vernor Vinge, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, William Shockley: the traitorous eight, zero-sum game

Like many of the “Singularitarians,” he points to a portfolio of social engineering options for softening the impact. Brynjolfsson and McAfee in The Second Machine Age sketch out a broad set of policy options that have the flavor of a new New Deal, with examples like “teach the children well,” “support our scientists,” “upgrade infrastructure.” Others like Harvard Business School professor Clayton Christensen have argued for focusing on technologies that create rather than destroy jobs (a very clear IA versus AI position). At the same time, while many who believe in accelerating change agonize about its potential impact, others have a more optimistic perspective. In a series of reports issued beginning in 2013, the International Federation of Robotics (IFR), established in 1987 with headquarters in Frankfurt, Germany, self-servingly argued that manufacturing robots actually increased economic activity and therefore, instead of causing unemployment, both directly and indirectly increased the total number of human jobs.


pages: 382 words: 120,064

Bank 3.0: Why Banking Is No Longer Somewhere You Go but Something You Do by Brett King

3D printing, additive manufacturing, Airbus A320, Albert Einstein, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, asset-backed security, augmented reality, barriers to entry, bitcoin, bounce rate, business intelligence, business process, business process outsourcing, call centre, capital controls, citizen journalism, Clayton Christensen, cloud computing, credit crunch, crowdsourcing, disintermediation, en.wikipedia.org, fixed income, George Gilder, Google Glasses, high net worth, I think there is a world market for maybe five computers, Infrastructure as a Service, invention of the printing press, Jeff Bezos, jimmy wales, Kickstarter, London Interbank Offered Rate, M-Pesa, Mark Zuckerberg, mass affluent, Metcalfe’s law, microcredit, mobile money, more computing power than Apollo, Northern Rock, Occupy movement, optical character recognition, peer-to-peer, performance metric, Pingit, platform as a service, QR code, QWERTY keyboard, Ray Kurzweil, recommendation engine, RFID, risk tolerance, Robert Metcalfe, self-driving car, Skype, speech recognition, stem cell, telepresence, Tim Cook: Apple, transaction costs, underbanked, US Airways Flight 1549, web application

So what did you do? You told customers, “Don’t reply to this email because we won’t answer it,” or, when they did email, you just ignored them. This still goes on today. I’m not going to embark on a lengthy discussion around customer service, culture and how you need to build that. There is a plethora of reference works on that subject, including the work of Ron Kaufman (Up Your Service), Micah Solomon, Clayton Christensen, Ken Blanchard, and Gary Vaynerchuk, which are amongst my favourites. However, I will attempt to describe the problem and an organisational fix to the silos that frustrate service and sales within the retail financial services space. “I genuinely believe that any business can create a competitive advantage through giving outstanding customer care.” —Gary Vaynerchuk (@garyvee) This is a great quote.


pages: 402 words: 126,835

The Job: The Future of Work in the Modern Era by Ellen Ruppel Shell

3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, basic income, Baxter: Rethink Robotics, big-box store, blue-collar work, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer vision, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, deskilling, disruptive innovation, Donald Trump, Downton Abbey, Elon Musk, Erik Brynjolfsson, factory automation, follow your passion, Frederick Winslow Taylor, future of work, game design, glass ceiling, hiring and firing, immigration reform, income inequality, industrial robot, invisible hand, Jeff Bezos, job automation, job satisfaction, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labor-force participation, low skilled workers, Lyft, manufacturing employment, Marc Andreessen, Mark Zuckerberg, means of production, move fast and break things, move fast and break things, new economy, Norbert Wiener, obamacare, offshore financial centre, Paul Samuelson, precariat, Ralph Waldo Emerson, risk tolerance, Robert Gordon, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, Steve Jobs, The Chicago School, Thomas L Friedman, Thorstein Veblen, Tim Cook: Apple, Uber and Lyft, uber lyft, universal basic income, urban renewal, white picket fence, working poor, Y Combinator, young professional, zero-sum game

This adjustment clearly correlates with top brass making more money (at this writing, Gabe Newell has a reported net worth of $5.5 billion), but its success at spawning innovation is less clear. “Flat hierarchies are supposed to result in disruptive innovation,” Ellsworth said. “But what happened at Valve wasn’t innovative. It was just disruptive.” The concept of “disruptive innovation,” popularized by Harvard Business School economist Clayton Christensen in his 1997 best seller The Innovator’s Dilemma, is all but de rigeur in business circles, particularly in the tech industry. Yet while it’s common for employers to encourage staff to be “disruptive,” what they actually mean by this is uncertain, even, one suspects, to the employers themselves. What it seems to imply is the expectation that employees function like entrepreneurs within their organizations, fearlessly innovating and taking risks to solve company problems.


pages: 400 words: 124,678

The Investment Checklist: The Art of In-Depth Research by Michael Shearn

Asian financial crisis, barriers to entry, business cycle, call centre, Clayton Christensen, collective bargaining, commoditize, compound rate of return, Credit Default Swap, estate planning, intangible asset, Jeff Bezos, London Interbank Offered Rate, margin call, Mark Zuckerberg, money market fund, Network effects, pink-collar, risk tolerance, shareholder value, six sigma, Skype, Steve Jobs, supply-chain management, technology bubble, time value of money, transaction costs, urban planning, women in the workforce, young professional

This enables the business to continually improve the quality of its veterinary diagnostics and to continually widen its competitive advantage. In fact, IDEXX controls more than 65 percent of its market, and it’s now the largest global player in the reference lab market.9 Are R&D Efforts Successful? Just because a business spends a large percentage of revenue on R&D does not mean that it will create successful products. Clayton Christensen, a professor at Harvard who has studied innovation extensively, reminds us of two rather subtle things about R&D spending. First, most innovation starts out in the wrong direction: Therefore, spending more money upfront can mean more wasted money. Second, breakthroughs tend to happen when resources are most scarce. Christensen estimates that 93 percent of ultimately successful innovations actually start out in the wrong direction: The probability that you’ll get it right the first time out of the gate is very low.


pages: 418 words: 128,965

The Master Switch: The Rise and Fall of Information Empires by Tim Wu

accounting loophole / creative accounting, Alfred Russel Wallace, Apple II, barriers to entry, British Empire, Burning Man, business cycle, Cass Sunstein, Clayton Christensen, commoditize, corporate raider, creative destruction, disruptive innovation, don't be evil, Douglas Engelbart, Douglas Engelbart, Howard Rheingold, Hush-A-Phone, informal economy, intermodal, Internet Archive, invention of movable type, invention of the telephone, invisible hand, Jane Jacobs, John Markoff, Joseph Schumpeter, Menlo Park, open economy, packet switching, PageRank, profit motive, road to serfdom, Robert Bork, Robert Metcalfe, Ronald Coase, sexual politics, shareholder value, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Telecommunications Act of 1996, The Chicago School, The Death and Life of Great American Cities, the market place, The Wisdom of Crowds, too big to fail, Upton Sinclair, urban planning, zero-sum game

That distance affords a perspective close enough to understand the problem, yet far enough for greater freedom of thought, freedom from, as it were, the cognitive distortion of what is as opposed to what could be. This innovative distance explains why so many of those who turn an industry upside down are outsiders, even outcasts. To understand this point we need grasp the difference between two types of innovation: “sustaining” and “disruptive,” the distinction best described by innovation theorist Clayton Christensen. Sustaining innovations are improvements that make the product better, but do not threaten its market. The disruptive innovation, conversely, threatens to displace a product altogether. It is the difference between the electric typewriter, which improved on the typewriter, and the word processor, which supplanted it.5 Another advantage of the outside inventor is less a matter of the imagination than of his being a disinterested party.


pages: 588 words: 131,025

The Patient Will See You Now: The Future of Medicine Is in Your Hands by Eric Topol

23andMe, 3D printing, Affordable Care Act / Obamacare, Anne Wojcicki, Atul Gawande, augmented reality, bioinformatics, call centre, Clayton Christensen, clean water, cloud computing, commoditize, computer vision, conceptual framework, connected car, correlation does not imply causation, creative destruction, crowdsourcing, dark matter, data acquisition, disintermediation, disruptive innovation, don't be evil, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Firefox, global village, Google Glasses, Google X / Alphabet X, Ignaz Semmelweis: hand washing, information asymmetry, interchangeable parts, Internet of things, Isaac Newton, job automation, Julian Assange, Kevin Kelly, license plate recognition, lifelogging, Lyft, Mark Zuckerberg, Marshall McLuhan, meta analysis, meta-analysis, microbiome, Nate Silver, natural language processing, Network effects, Nicholas Carr, obamacare, pattern recognition, personalized medicine, phenotype, placebo effect, RAND corporation, randomized controlled trial, Second Machine Age, self-driving car, Silicon Valley, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, Snapchat, social graph, speech recognition, stealth mode startup, Steve Jobs, the scientific method, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Turing test, Uber for X, uber lyft, Watson beat the top human players on Jeopardy!, WikiLeaks, X Prize

—GEORGE HALVORSON, FORMER CEO OF KAISER PERMANENTE1 “The hospital of the future will not be a hospital at all.” —DEBORAH DISANZO, FORMER CEO OF PHILIPS HEALTHCARE2,3 “In a typical hospital, overheads account for 85 to 90 percent of total costs because of the complexity of offering a ‘one size fits none’ offering. It turns out there are three different business models inside a hospital, and those three business models are incompatible.” —CLAYTON CHRISTENSEN When I was training to be a cardiologist in the 1980s at Johns Hopkins, it took three hospital days for a patient to undergo a cardiac catheterization. Each patient was admitted the day before the procedure to have a full evaluation, which consisted of a history and physical, chest X-ray, an electrocardiogram, and the routine laboratories. An intravenous line was placed to give fluid in preparation for the exposure of contrast dye, which can harm the kidneys if a patient is dehydrated.


pages: 444 words: 127,259

Super Pumped: The Battle for Uber by Mike Isaac

"side hustle", activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, always be closing, Amazon Web Services, Andy Kessler, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Bay Area Rapid Transit, Burning Man, call centre, Chris Urmson, Chuck Templeton: OpenTable:, citizen journalism, Clayton Christensen, cloud computing, corporate governance, creative destruction, don't be evil, Donald Trump, Elon Musk, family office, gig economy, Google Glasses, Google X / Alphabet X, high net worth, Jeff Bezos, John Markoff, Kickstarter, Lyft, Marc Andreessen, Mark Zuckerberg, mass immigration, Menlo Park, Mitch Kapor, money market fund, moral hazard, move fast and break things, move fast and break things, Network effects, new economy, off grid, peer-to-peer, pets.com, Richard Florida, ride hailing / ride sharing, Sand Hill Road, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley startup, skunkworks, Snapchat, software as a service, software is eating the world, South China Sea, South of Market, San Francisco, sovereign wealth fund, special economic zone, Steve Jobs, TaskRabbit, the payments system, Tim Cook: Apple, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, ubercab, union organizing, upwardly mobile, Y Combinator

The amount of global venture capital invested soared from tens of billions in 2005 into the hundreds of billions invested post-2010. San Francisco emerged as the world’s epicenter of such deals. But then the balance of power began to shift. As startups upended global infrastructure at an unprecedented pace, entrepreneurs found that old power centers had eroded and been replaced in some cases by the upstarts that sprung up around them. Clayton Christensen’s “Innovator’s Dilemma” articulated the perils that awaited any company that grew so large that it no longer saw threats coming from more nimble competitors. The venture-backed startups became the new establishment. Something else happened: Founders realized they liked being in control. They wanted freedom from meddling by outsiders like shareholders, investors, or the general public.


pages: 467 words: 154,960

Trend Following: How Great Traders Make Millions in Up or Down Markets by Michael W. Covel

Albert Einstein, Atul Gawande, backtesting, beat the dealer, Bernie Madoff, Black Swan, buy and hold, buy low sell high, capital asset pricing model, Clayton Christensen, commodity trading advisor, computerized trading, correlation coefficient, Daniel Kahneman / Amos Tversky, delayed gratification, deliberate practice, diversification, diversified portfolio, Edward Thorp, Elliott wave, Emanuel Derman, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, fiat currency, fixed income, game design, hindsight bias, housing crisis, index fund, Isaac Newton, John Meriwether, John Nash: game theory, linear programming, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, market fundamentalism, market microstructure, mental accounting, money market fund, Myron Scholes, Nash equilibrium, new economy, Nick Leeson, Ponzi scheme, prediction markets, random walk, Renaissance Technologies, Richard Feynman, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, shareholder value, Sharpe ratio, short selling, South Sea Bubble, Stephen Hawking, survivorship bias, systematic trading, the scientific method, Thomas L Friedman, too big to fail, transaction costs, upwardly mobile, value at risk, Vanguard fund, William of Occam, zero-sum game

And thank you to the following publications and writers who generously allowed me to quote from their work: Sol Waksman and Barclay Managed Futures Report, Futures Magazine, Managed Account Reports, Michael Rulle of Graham Capital Management, and Technical Analysis of Stocks and Commodities Magazine. I am also indebted to the following authors whose works continue to be treasure troves of information and insight: Morton Baratz, Peter Bernstein, Clayton Christensen, Jim Collins, Jay Forrester, Tom Friedman, Gerd Gigerenzer, Daniel Goleman, Stephen Jay Gould, Alan Greenberg, Larry Harris, Robert Koppel, Edwin Lefevere, Michael Lewis, Jesse Livermore, Roger Lowenstein, Acknowledgments Ludwig von Mises, Lois Peltz, Ayn Rand, Jack Schwager, Denise Shekerjian, Robert Shiller, Van Tharp, Edward Thorp, Peter Todd, Brenda Ueland, and Dickson Watts. This book could only have come to fruition with the editorial guidance of Jim Boyd at FT Press, as well as the able assistance and attention to detail of Dennis Higbee.


pages: 629 words: 142,393

The Future of the Internet: And How to Stop It by Jonathan Zittrain

A Declaration of the Independence of Cyberspace, Amazon Mechanical Turk, Andy Kessler, barriers to entry, book scanning, Brewster Kahle, Burning Man, c2.com, call centre, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, commoditize, corporate governance, Daniel Kahneman / Amos Tversky, disruptive innovation, distributed generation, en.wikipedia.org, Firefox, game design, Hacker Ethic, Howard Rheingold, Hush-A-Phone, illegal immigration, index card, informal economy, Internet Archive, jimmy wales, John Markoff, license plate recognition, loose coupling, mail merge, national security letter, old-boy network, packet switching, peer-to-peer, post-materialism, pre–internet, price discrimination, profit maximization, Ralph Nader, RFC: Request For Comment, RFID, Richard Stallman, Richard Thaler, risk tolerance, Robert Bork, Robert X Cringely, SETI@home, Silicon Valley, Skype, slashdot, software patent, Steve Ballmer, Steve Jobs, Ted Nelson, Telecommunications Act of 1996, The Nature of the Firm, The Wisdom of Crowds, web application, wikimedia commons, zero-sum game

Once you reach the top of the hierarchy, you acquire status and benefits that can soon be lost—the nice cars, the home in Brentwood, the private schools…. It doesn’t make sense to jeopardize any of that by adopting a reckless attitude towards new technologies, new markets. Moving slow, and making clear, safe progress is the mantra.23 The puzzle of why big firms exhibit such innovative inertia was placed into a theoretical framework by Clayton Christensen in his pioneering book The Innovator’s Dilemma.24 Christensen found the hard disk drive industry representative. In it, market leaders tended to be very good at quickly and successfully adopting some technological advancements, yet were entirely left behind by upstarts. To explain the discrepancy, he created a taxonomy of “sustaining” and “disruptive” innovations. When technological innovations are consistent with the performance trajectory of established market leaders—that is, when they are a more efficient way of doing what they already do—alert leaders will be quick to develop and utilize such “sustaining” innovations.


pages: 518 words: 147,036

The Fissured Workplace by David Weil

accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, banking crisis, barriers to entry, business cycle, business process, buy and hold, call centre, Carmen Reinhart, Cass Sunstein, Clayton Christensen, clean water, collective bargaining, commoditize, corporate governance, corporate raider, Corrections Corporation of America, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, declining real wages, employer provided health coverage, Frank Levy and Richard Murnane: The New Division of Labor, George Akerlof, global supply chain, global value chain, hiring and firing, income inequality, information asymmetry, intermodal, inventory management, Jane Jacobs, Kenneth Rogoff, law of one price, loss aversion, low skilled workers, minimum wage unemployment, moral hazard, Network effects, new economy, occupational segregation, Paul Samuelson, performance metric, pre–internet, price discrimination, principal–agent problem, Rana Plaza, Richard Florida, Richard Thaler, Ronald Coase, shareholder value, Silicon Valley, statistical model, Steve Jobs, supply-chain management, The Death and Life of Great American Cities, The Nature of the Firm, transaction costs, ultimatum game, union organizing, women in the workforce, yield management

In short, the lawyer is present only to serve the lender’s need for a lawyer to be present to witness the closing, and provides no services or benefits to the borrower. 14. This has long been a practice of law firms who historically would bill work at rates reflective of more specialized staff, but would staff that work with lower-cost (but internally provided) junior lawyers and paralegals. 15. A provocative discussion of the potential impact of LPOs is provided by Bruce MacEwen, drawing on Clayton Christensen’s idea of the innovator’s dilemma (Christensen 2006). See Bruce MacEwen, “Innovators at the Barricades,” Adam Smith, Esq. (blog), July 10, 2010 (available at http://www.adamsmithesq.com/2010/07/innovators_at_the_barricades/, accessed February 18, 2013). 16. This three-level market breakdown appears on a number of law blog analyses of the changing legal market. See, for example, Jordan Furlong, “The Stratified Legal Market and Its Implications,” Law21 (blog), March 25, 2011 (available at http://www.law21.ca/2011/03/the-stratified-legal-market-and-its-implications/, accessed February 12, 2013). 17.


pages: 554 words: 149,489

The Content Trap: A Strategist's Guide to Digital Change by Bharat Anand

Airbnb, Benjamin Mako Hill, Bernie Sanders, Clayton Christensen, cloud computing, commoditize, correlation does not imply causation, creative destruction, crowdsourcing, death of newspapers, disruptive innovation, Donald Trump, Google Glasses, Google X / Alphabet X, information asymmetry, Internet of things, inventory management, Jean Tirole, Jeff Bezos, John Markoff, Just-in-time delivery, Khan Academy, Kickstarter, late fees, Mark Zuckerberg, market design, Minecraft, multi-sided market, Network effects, post-work, price discrimination, publish or perish, QR code, recommendation engine, ride hailing / ride sharing, selection bias, self-driving car, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, social graph, social web, special economic zone, Stephen Hawking, Steve Jobs, Steven Levy, Thomas L Friedman, transaction costs, two-sided market, ubercab, WikiLeaks, winner-take-all economy, zero-sum game

Online wasn’t considered journalism; it was considered copy-and-paste from the paper. So when we started, Torry and I realized we had to take the team elsewhere. So we literally went to another floor. Separating digital from traditional by one floor was hardly a bold move. Nor was the separation of new and old businesses particularly novel. Just a few years earlier Harvard Business School’s Clayton Christensen had advocated that approach to innovation in his bestselling book, The Innovator’s Dilemma . What was novel was what transpired next at VG —a result of instinct, experience, and accident. During the next year and a half, two events occurred that were entirely outside the managers’ control but would change their entire approach and philosophy. The first was the explosion and sinking of the Russian submarine Kursk .


pages: 552 words: 168,518

MacroWikinomics: Rebooting Business and the World by Don Tapscott, Anthony D. Williams

accounting loophole / creative accounting, airport security, Andrew Keen, augmented reality, Ayatollah Khomeini, barriers to entry, Ben Horowitz, bioinformatics, Bretton Woods, business climate, business process, buy and hold, car-free, carbon footprint, Charles Lindbergh, citizen journalism, Clayton Christensen, clean water, Climategate, Climatic Research Unit, cloud computing, collaborative editing, collapse of Lehman Brothers, collateralized debt obligation, colonial rule, commoditize, corporate governance, corporate social responsibility, creative destruction, crowdsourcing, death of newspapers, demographic transition, disruptive innovation, distributed generation, don't be evil, en.wikipedia.org, energy security, energy transition, Exxon Valdez, failed state, fault tolerance, financial innovation, Galaxy Zoo, game design, global village, Google Earth, Hans Rosling, hive mind, Home mortgage interest deduction, information asymmetry, interchangeable parts, Internet of things, invention of movable type, Isaac Newton, James Watt: steam engine, Jaron Lanier, jimmy wales, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Marc Andreessen, Marshall McLuhan, mass immigration, medical bankruptcy, megacity, mortgage tax deduction, Netflix Prize, new economy, Nicholas Carr, oil shock, old-boy network, online collectivism, open borders, open economy, pattern recognition, peer-to-peer lending, personalized medicine, Ray Kurzweil, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, scientific mainstream, shareholder value, Silicon Valley, Skype, smart grid, smart meter, social graph, social web, software patent, Steve Jobs, text mining, the scientific method, The Wisdom of Crowds, transaction costs, transfer pricing, University of East Anglia, urban sprawl, value at risk, WikiLeaks, X Prize, young professional, Zipcar

Making radical changes in the product’s capabilities, underlying architecture, or associated business models could cannibalize sales or lead to costly realignments of strategy and business infrastructure. It’s as though popular and widely adopted products become ossified, hardened by the inherent incentive to build on their own successes. The result is that entrenched industry players are generally not motivated to develop or deploy disruptive technologies, as Harvard Business School professor Clayton Christensen has pointed out. So success breeds complacency. R&D departments are discouraged from investigating alternative technologies and so channel their resources into refining components, adding new features, or tweaking their existing product architectures. This strategy of marching down a well-defined product road map may pay dividends for some time. But complacency creates enormous vulnerability when disruptive innovations emerge that may threaten the product road map itself.


pages: 615 words: 168,775

Troublemakers: Silicon Valley's Coming of Age by Leslie Berlin

AltaVista, Apple II, Asilomar, Asilomar Conference on Recombinant DNA, beat the dealer, Bill Gates: Altair 8800, Bob Noyce, Byte Shop, Clayton Christensen, cloud computing, computer age, discovery of DNA, don't be evil, Donald Knuth, double helix, Douglas Engelbart, Douglas Engelbart, Dynabook, Edward Thorp, El Camino Real, fear of failure, Fellow of the Royal Society, financial independence, game design, Haight Ashbury, hiring and firing, industrial robot, informal economy, Internet of things, inventory management, John Markoff, Kickstarter, Kitchen Debate, Leonard Kleinrock, manufacturing employment, Mark Zuckerberg, Menlo Park, Minecraft, Mother of all demos, packet switching, Ralph Nader, Robert Metcalfe, rolodex, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Snapchat, software as a service, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, Ted Nelson, union organizing, upwardly mobile, William Shockley: the traitorous eight, women in the workforce

Intel had already tried selling digital watches built around its chips, and National had done the same with calculators; both efforts had been expensive failures. “The technology is going to move faster than we can be sensible in applying it,” one National executive admitted when asked about moving into consumer markets.24 Large computer companies such as Hewlett-Packard and DEC, meanwhile, were caught in what Harvard Business School professor Clayton Christensen has called the “innovator’s dilemma”: they had committed resources to an existing market (minicomputers) and could not see, or did not want to see, an emerging market for smaller, cheaper, less powerful machines that could one day destroy the established market. Xerox, where Bob Taylor’s group and the systems science lab had designed the accessible, user-friendly Alto, was similarly stymied.


pages: 603 words: 182,781

Aerotropolis by John D. Kasarda, Greg Lindsay

3D printing, air freight, airline deregulation, airport security, Akira Okazaki, Asian financial crisis, back-to-the-land, barriers to entry, Berlin Wall, big-box store, blood diamonds, borderless world, Boris Johnson, British Empire, business cycle, call centre, carbon footprint, Cesare Marchetti: Marchetti’s constant, Charles Lindbergh, Clayton Christensen, cleantech, cognitive dissonance, commoditize, conceptual framework, credit crunch, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, deskilling, digital map, disruptive innovation, edge city, Edward Glaeser, failed state, food miles, Ford paid five dollars a day, Frank Gehry, fudge factor, full employment, future of work, Geoffrey West, Santa Fe Institute, George Gilder, global supply chain, global village, gravity well, Haber-Bosch Process, Hernando de Soto, hive mind, if you build it, they will come, illegal immigration, inflight wifi, intangible asset, interchangeable parts, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of the telephone, inventory management, invisible hand, Jane Jacobs, Jeff Bezos, Joan Didion, Kangaroo Route, Kickstarter, knowledge worker, kremlinology, low cost airline, Marchetti’s constant, Marshall McLuhan, Masdar, mass immigration, McMansion, megacity, Menlo Park, microcredit, Network effects, New Economic Geography, new economy, New Urbanism, oil shale / tar sands, oil shock, peak oil, Pearl River Delta, Peter Calthorpe, Peter Thiel, pets.com, pink-collar, pre–internet, RFID, Richard Florida, Ronald Coase, Ronald Reagan, Rubik’s Cube, savings glut, Seaside, Florida, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart cities, smart grid, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, spinning jenny, starchitect, stem cell, Steve Jobs, supply-chain management, sustainable-tourism, telepresence, the built environment, The Chicago School, The Death and Life of Great American Cities, The Nature of the Firm, thinkpad, Thomas L Friedman, Thomas Malthus, Tony Hsieh, trade route, transcontinental railway, transit-oriented development, traveling salesman, trickle-down economics, upwardly mobile, urban planning, urban renewal, urban sprawl, walkable city, white flight, white picket fence, Yogi Berra, zero-sum game

In a single year, netbooks captured 7 percent of the world’s entire laptop market; the next year they doubled that, as laptops outsold desktops for the first time ever. In Europe, wireless carriers began giving them away for free to lure new customers. Without meaning to, netbooks had paved the way for the PC’s extinction. ASUSTeK didn’t take it upon itself to invent just a new product; they invented a new category. It’s a classic example of the disruptive innovations Clayton Christensen describes in The Innovator’s Dilemma—a cheap, seemingly inferior imitator appears to gut the incumbents’ business models. In this case, their only response was to hire the insurgents to slap their names on the same models. Suddenly, the Taiwanese firms and their mainland factories were dictating terms to the rest of the industry. Netbooks are old hat—tablets are where the action is. By one estimate, tablets will outsell netbooks as early as next year, and desktop computers the year after that, rising to twenty million a year by 2015.


pages: 602 words: 177,874

Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations by Thomas L. Friedman

3D printing, additive manufacturing, affirmative action, Airbnb, AltaVista, Amazon Web Services, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Bob Noyce, business cycle, business process, call centre, centre right, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, corporate social responsibility, creative destruction, crowdsourcing, David Brooks, demand response, demographic dividend, demographic transition, Deng Xiaoping, Donald Trump, Erik Brynjolfsson, failed state, Fall of the Berlin Wall, Ferguson, Missouri, first square of the chessboard / second half of the chessboard, Flash crash, game design, gig economy, global pandemic, global supply chain, illegal immigration, immigration reform, income inequality, indoor plumbing, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the steam engine, inventory management, Irwin Jacobs: Qualcomm, Jeff Bezos, job automation, John Markoff, John von Neumann, Khan Academy, Kickstarter, knowledge economy, knowledge worker, land tenure, linear programming, Live Aid, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, mass immigration, Maui Hawaii, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Nelson Mandela, pattern recognition, planetary scale, pull request, Ralph Waldo Emerson, ransomware, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, South China Sea, Steve Jobs, supercomputer in your pocket, TaskRabbit, The Rise and Fall of American Growth, Thomas L Friedman, transaction costs, Transnistria, uber lyft, undersea cable, urban decay, urban planning, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y2K, Yogi Berra, zero-sum game

And the only occupations that have shown consistent wage growth since 2000 require both cognitive and social skills … Yet to prepare students for the change in the way we work, the skills that schools teach may need to change. Social skills are rarely emphasized in traditional education. “Machines are automating a whole bunch of these things, so having the softer skills, knowing the human touch and how to complement technology, is critical, and our education system is not set up for that,” said Michael Horn, co-founder of the Clayton Christensen Institute, where he studies education. Miller consulted David Deming, an associate professor of education and economics at Harvard University and author of a new study on this subject. As Miller explained, Deming’s research shows that in the tech industry “it’s the jobs that combine technical and interpersonal skills that are booming, like being a computer scientist working on a group project.”


pages: 579 words: 183,063

Tribe of Mentors: Short Life Advice From the Best in the World by Timothy Ferriss

23andMe, A Pattern Language, agricultural Revolution, Airbnb, Albert Einstein, Bayesian statistics, bitcoin, Black Swan, blockchain, Brownian motion, Buckminster Fuller, Clayton Christensen, cloud computing, cognitive dissonance, Colonization of Mars, corporate social responsibility, cryptocurrency, David Heinemeier Hansson, dematerialisation, don't be evil, double helix, effective altruism, Elon Musk, Ethereum, ethereum blockchain, family office, fear of failure, Gary Taubes, Geoffrey West, Santa Fe Institute, Google Hangouts, Gödel, Escher, Bach, haute couture, helicopter parent, high net worth, In Cold Blood by Truman Capote, income inequality, index fund, Jeff Bezos, job satisfaction, Johann Wolfgang von Goethe, Kevin Kelly, Lao Tzu, Law of Accelerating Returns, Lyft, Mahatma Gandhi, Marc Andreessen, Marshall McLuhan, Mikhail Gorbachev, minimum viable product, move fast and break things, move fast and break things, Naomi Klein, non-fiction novel, Peter Thiel, profit motive, Ralph Waldo Emerson, Ray Kurzweil, Saturday Night Live, side project, Silicon Valley, Skype, smart cities, smart contracts, Snapchat, Steve Jobs, Steven Pinker, Stewart Brand, TaskRabbit, Tesla Model S, too big to fail, Turing machine, uber lyft, web application, Whole Earth Catalog, Y Combinator

Forethought is a virtue; remember that one day, that distant future will be now, and the choices you make today will have shaped the choices you are able to make then. This obviously has wide applications to social and environmental issues (ahem, climate change or income inequality) as well. What are bad recommendations you hear in your profession or area of expertise? “Disrupt!” When Clayton Christensen introduced the term “disruptive technology” in his 1997 business classic, The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail, he was asking a very different question than “How can I get funded by convincing VCs that there’s a huge market I can blow up?” He wanted to know why existing companies fail to take advantage of new opportunities. He discovered that breakthrough technologies that are not yet mature first succeed by finding radically new markets, and only later disrupt existing markets.


pages: 720 words: 197,129

The Innovators: How a Group of Inventors, Hackers, Geniuses and Geeks Created the Digital Revolution by Walter Isaacson

1960s counterculture, Ada Lovelace, AI winter, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, AltaVista, Apple II, augmented reality, back-to-the-land, beat the dealer, Bill Gates: Altair 8800, bitcoin, Bob Noyce, Buckminster Fuller, Byte Shop, c2.com, call centre, citizen journalism, Claude Shannon: information theory, Clayton Christensen, commoditize, computer age, crowdsourcing, cryptocurrency, Debian, desegregation, Donald Davies, Douglas Engelbart, Douglas Engelbart, Douglas Hofstadter, Dynabook, El Camino Real, Electric Kool-Aid Acid Test, en.wikipedia.org, Firefox, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Hacker Ethic, Haight Ashbury, Howard Rheingold, Hush-A-Phone, HyperCard, hypertext link, index card, Internet Archive, Jacquard loom, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John von Neumann, Joseph-Marie Jacquard, Leonard Kleinrock, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Mitch Kapor, Mother of all demos, new economy, New Journalism, Norbert Wiener, Norman Macrae, packet switching, PageRank, Paul Terrell, pirate software, popular electronics, pre–internet, RAND corporation, Ray Kurzweil, RFC: Request For Comment, Richard Feynman, Richard Stallman, Robert Metcalfe, Rubik’s Cube, Sand Hill Road, Saturday Night Live, self-driving car, Silicon Valley, Silicon Valley startup, Skype, slashdot, speech recognition, Steve Ballmer, Steve Crocker, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, technological singularity, technoutopianism, Ted Nelson, The Coming Technological Singularity, The Nature of the Firm, The Wisdom of Crowds, Turing complete, Turing machine, Turing test, Vannevar Bush, Vernor Vinge, Von Neumann architecture, Watson beat the top human players on Jeopardy!, Whole Earth Catalog, Whole Earth Review, wikimedia commons, William Shockley: the traitorous eight

Paul Baran interview, in James Pelkey, “Entrepreneurial Capitalism and Innovation,” http://www.historyofcomputercommunications.info/Book/2/2.4-Paul%20Baran-59-65.html#_ftn9. 57. Paul Baran oral history, “How the Web Was Won,” Vanity Fair, July 2008; interview with Paul Baran, by Stewart Brand, Wired, Mar. 2001; Paul Baran oral history, conducted by David Hochfelder, Oct. 24, 1999, IEEE History Center; Clayton Christensen, The Innovator’s Dilemma (Harper, 1997). 58. Donald Davies, “A Historical Study of the Beginnings of Packet Switching,” Computer Journal, British Computer Society, 2001; Abbate, Inventing the Internet, 558; author’s interview with Larry Roberts; Trevor Harris, “Who Is the Father of the Internet? The Case for Donald Davies,” http://www.academia.edu. 59. Author’s interview with Leonard Kleinrock; Leonard Kleinrock oral history, conducted by John Vardalas, IEEE History Center, Feb. 21, 2004. 60.