Innovator's dilemma
·1 min
Key takeaways:
- It’s incorrect to assume that big & successful companies don’t innovate or their managers are incompetent & lazy. However, they still fail.
- Such companies innovate to make their existing products better. For e.g., improve sound quality of giant radios that sit in their own cabinets in living rooms of rich people.
- They even innovate to create new products, just that they fail to capitalize on these innovations.
- Because these products are initially crappy, the companies don’t release them to end customers. For e.g., small-sized radios that can fit in pockets.
- Scrappy startups are less stringent about the quality of the products they release, so iterate faster. By the time companies realize profitability of new products, they are already too late.
- Dilemma for big companies: they can’t invest in every dumb new idea. However, if they only invest in what works for them right now and wait for others to realize the profitability of new ideas, it’ll be too late by the time the latter happens.
- I think the proposed solution is to build startups within big companies, give them the autonomy to operate as they see fit and allow them to fail.