The_Innovators_Dilemma__Clayton

Having decided that electric vehicles are a potentially disruptive technology, my next challenge would
be to define a marketing strategy that could lead my company to a legitimate, unsubsidized market in
which electric cars might first be used. In formulating this marketing strategy, I would apply three
findings from earlier chapters in this book.
First, I would acknowledge that, by definition, electric vehicles cannot initially be used in mainstream
applications because they do not satisfy the basic performance requirements of that market. I would
therefore be sure that everybody having anything to do with my program understands this point:
Although we don’t have a clue about where the market is, the one thing we know for certain is that it
isn’t in an established automobile market segment. Ironically, I would expect most automakers to focus
precisely and myopically on the mainstream market because of the principle of resource dependence
and the principle that small markets don’t solve the growth and profit needs of big companies. I would
not, therefore, follow the lead of other automakers in my search for customers, because I would
recognize that their instincts and capabilities are likely to be trained on the wrong target. 7
Nonetheless, my task is to find a market in which the vehicles can be used, because the early entrants
into disruptive technology markets develop capabilities that constitute strong advantages over later
entrants. They’re the ones that, from a profitable business base in this beachhead market, will most
successfully throw impetus behind the sustaining innovations required to move the disruptive
technology upmarket, toward the mainstream. Holding back from the market, waiting for laboratory
researchers to develop a breakthrough battery technology, for example, is the path of least resistance
for managers. But this strategy has rarely proven to be a viable route to success with a disruptive
innovation.
Historically, as we have seen, the very attributes that make disruptive technologies uncompetitive in
mainstream markets actually count as positive attributes in their emerging value network. In disk
drives, the smallness of 5.25-inch models made them unusable in large computers but very useful on
the desktop. While the small bucket capacity and short reach of early hydraulic excavators made them
useless in general excavation, their ability to dig precise, narrow trenches made them useful in
residential construction. Odd as it sounds, therefore, I would direct my marketers to focus on
uncovering somewhere a group of buyers who have an undiscovered need for a vehicle that accelerates
relatively slowly and can’t be driven farther than 100 miles!
The second point on which I would base my marketing approach is that no one can learn from market
research what the early market(s) for electric vehicles will be. I can hire consultants, but the only thing
I can know for sure is that their findings will be wrong. Nor can customers tell me whether or how they
might use electric vehicles, because they will discover how they might use the products at the same
time as we discover it—just as Honda’s Supercub opened an unforeseen new application for
motorbiking. The only useful information about the market will be what I create through expeditions
into the market, through testing and probing, trial and error, by selling real products to real people who
pay real money. 8 Government mandates, incidentally, are likely to distort rather than solve the problem
of finding a market. I would, therefore, force my organization to live by its wits rather than to rely on
capricious subsidies or non-economic–based California regulation to fuel my business.
The third point is that my business plan must be a plan for learning, not one for executing a
preconceived strategy. Although I will do my best to hit the right market with the right product and the
right strategy the first time out, there is a high probability that a better direction will emerge as the
business heads toward its initial target. I must therefore plan to be wrong and to learn what is right as
fast as possible. 9 I cannot spend all of my resources or all of my organizational credibility on an all-or-
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