The_Innovators_Dilemma__Clayton

supply. Understanding these trajectories is the key to their success thus far. But the list of firms that
have consistently done this is disturbingly short. Most well-run companies migrate unconsciously to the
northeast, setting themselves up to be caught by a change in the basis of competition and an attack from
below by disruptive technology.
NOTES
1. In disk drive industry convention, a mean time between failure measure of one million hours means
that if one million disk drives were turned on simultaneously and operated continuously for one hour,
one of those drives would fail within the first hour.
2. Three of the earliest and most influential papers that proposed the existence of product life cycles
were Jay W. Forrester, “Industrial Dynamics,” Harvard Business Review, July–August, 1958, 9–14;
Arch Patton, “Stretch Your Products’ Earning Years—Top Management’s Stake in the Product Life
Cycle,” Management Review (38), June, 1959, 67–79; and William E. Cox, “Product Life Cycles as
Marketing Models,” Journal of Business (40), October, 1967, 375. Papers summarizing the conceptual
and empirical problems surrounding the product life cycle concept include Nariman K. Dhalla and
Sonia Yuspeh, “Forget the Product Life Cycle Concept!” Harvard Business Review, January–February,
1976, 102–112; David R. Rink and John E. Swan, “Product Life Cycle Research: A Literature
Review,” Journal of Business Research, 1979, 219; and George S. Day, ”The Product Life Cycle:
Analysis and Applications Issues,” Journal of Marketing (45), Fall, 1981, 60–67. A paper by Gerard J.
Tellis and C. Merle Crawford, “An Evolutionary Approach to Product Growth Theory,” Journal of
Marketing (45), Fall, 1981, 125–132, contains a cogent critique of the product life cycle concept, and
presents a theory of product evolution that presages many of the ideas presented in this section.
3. Geoffrey A. Moore, Crossing the Chasm (New York: HarperBusiness, 1991).
4. The same behavior characterized the emergence of portable radios. In the early 1950s, Akio Morita,
the chairman of Sony, took up residence in an inexpensive New York City hotel in order to negotiate a
license to AT&T’s patented transistor technology, which its scientists had invented in 1947. Morita
found AT&T to be a less-than-willing negotiator and had to visit the company repeatedly badgering
AT&T to grant the license. Finally AT&T relented. After the meeting ended in which the licensing
documents were signed, an AT&T official asked Morita what Sony planned to do with the license. “We
will build small radios,” Morita replied. “Why would anyone care about smaller radios?” the official
queried. “We’ll see,” was Morita’s answer. Several months later Sony introduced to the U.S. market
the first portable transistor radio. According to the dominant metrics of radio performance in the
mainstream market, these early transistor radios were really bad, offering far lower fidelity and much
more static than the vacuum tube-based tabletop radios that were the dominant design of the time. But
rather than work in his labs until his transistor radios were performance-competitive in the major
market (which is what most of the leading electronics companies did with transistor technology),
Morita instead found a market that valued the attributes of the technology as it existed at the time—the
portable personal radio. Not surprisingly, none of the leading makers of tabletop radios became a
leading producer of portable radios, and all were subsequently driven from the radio market. (This
story was recounted to me by Dr. Sheldon Weinig, retired vice chairman for manufacturing and
technology of Sony Corporation.)
5. John Case, “Customer Service: The Last Word,” Inc. Magazine, April, 1991, 1–5.
6. This information in this section was given to the author by Scott Cook, the founder and chairman of
Intuit Corporation, and by Jay O’Connor, marketing manager for Quickbooks.
7. Cook recounts that in the process of designing a simple and convenient accounting software
package, Intuit’s developers arrived at a profound insight. The double-entry accounting system
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