The Innovator's Dilemma
In his book, The Innovator's Dilemma [3], Professor Clayton Christensen of Harvard Business School describes a theory about how large, outstanding firms can fail "by doing everything right." The Innovator's Dilemma, according to Christensen, describes companies whose successes and capabilities can actually become obstacles in the face of changing markets and technologies. This book takes the radical position that great companies can fail precisely because they do everything right. It demonstrates why outstanding companies that had their competitive antennae up, listened astutely to customers, and invested aggressively in new technologies still lost their market leadership when confronted with disruptive changes in technology and market structure. And it tells how to avoid a similar fate. Using the lessons of successes and failures of leading companies, The Innovator's Dilemma presents a set of rules for capitalizing on the phenomenon of disruptive innovation. These principles will help managers determine when it is right not to listen to customers, when to invest in developing lower-performance products that promise lower margins, and when to pursue small markets at the expense of seemingly larger and more lucrative ones. - Jacket flap.
Stats for nerds
148recommend
522mentions
340people
2007–2026years
40% recommend57% neutral3% critical
Mentions per year
What Hacker News says
- > our culture’s deserved rancor at late stage capitalist
Late stage capitalism was coined over a century ago. It still hasn't happened.
What does happen, however, is a company will grow until it strangles itself with committees and bureaucracy. And then gets replaced with a younger company. A good book on this is "The Innovator's Dilemma".
- > Free markets are also designed around participants of equal or comparable power.
No, they are not. No matter how big your company is, if customers don't like your product, you are going bust. Small companies regularly replace large ones. See the book "The Innovator's Dilemma".
- This is an internal form of the problem described in The Innovator’s Dilemma*: you optimize for what seems to work well and miss the big picture.
I thinkers a natural Hayflick limit for companies.
* you know: one of the 4 or 5 business books actually worth reading, that caused thousands of companies to start cargo-culting the word “innovation”
- Even te business folks know this, at least those who read “The Innovator’s Dilemma”.
All the very successful-yet-failing companies were unable to understand these compromises, and each was overturned by a newcomer that could (usually due to necessity, of course)
- Rather, they're in a somewhat precarious position. Almost all of their revenue is from phones and the services that are tied to those phones, which perform better as a lifestyle product than a productivity product. They are in a position where either a market change in what kind of hardware we use to communicate or a stylistic change in lifestyles people wish to portray could collapse their revenue.
For an excellent view on how established players miss market changes, check out The Innovator's Dilemma, by Clayton Christensen.
- Until it is in prod, it is a proof of concept. Blockchains solve for low trust; if you have trust, you don't need the efficiency loss of a decentralized ledger or blockchain. Central banks provide trust.
As mentioned in one of my other comments, Pix in Brazil costs ~$10M/year. They process ~6-8 billion monthly transactions and roughly $6.7 trillion in payment volume a year [1]. That's roughly ~$0.0015/transaction based on the math in this comment, and we don't know what the ceiling is based on existing capacity (which would drive per transaction costs down further). Choose boring technology, when possible [2].
The innovation in this context is nuking the profits of Visa and Mastercard (their margins are ~45-50% [3] [4] [5]), replacing them with central bank instant payment systems run at cost. The reduction in their revenue is money back in the pockets of everyone paying unnecessarily to move value around. I highly recommend the book "The Innovator's Dilemma" on this topic [6].
[1] https://www.ebanx.com/en/insights/articles/five-years-on-pix...
[2] https://www.elibrary.imf.org/view/journals/002/2023/289/arti...
[3] https://finance.yahoo.com/markets/stocks/articles/visa-vs-ma...
[4] https://finance.yahoo.com/markets/stocks/articles/mastercard...
[5] https://aftabborka.substack.com/p/over-50-profit-margin-how-...
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