Sometimes the new innovative, disruptive technology lacks the quality of the incumbent system. Does that mean you should ingore it? No.
Disruptive innovation, graphically represented, has got these s-curve characteristics between time and performance and essentially, it creates a new market that starts off being rather low quality.
A good example is when the mobile phone sector began. Mobile phone connections were often spotty depending on where cell towers were. And AT&T, the incumbent giant, essentially said there's no way that their mobile phones are ever going to match the quality of what we call our twisted-pair networks or copper wire networks. And the definition for quality at AT&T was beyond that which could be provided by mobile phones. However, over time, mobile phones began to get to gain in performance. They also dropped in cost and dropped in size to the point where AT&T was getting left behind.
Over the last decade most people used their mobile phone at home and did not have a land line phone even if it was through the cable provider. And so the disruption happens because this sort of low quality, very agile, type of technology comes along and the incumbents and can't change fast enough. So what AT&T had to do was buy McCaw mobile in order to catch up by acquiring it. If you have deep pockets, that can be an effective strategy. However, humility costs less. And so does experimentation. |