2023-09-17

Isaac Asimov and Clayton Christensen are two of my favorite authors. Though they write about widely differing subjects, what brings them together is the concept of disruptive change.

In Asimov’s epic Foundation series, Trantor is the dying home of the Empire.

Spoiler alert. Stop here if you haven’t read the Foundation series1, take a week off from work, and go get the books. You can thank me later.

Through the course of Asimov’s saga, Trantor loses its galactic primacy2 to Terminus, the seat of the Foundation.

The Foundation starts small—a hardscrabble group isolated in the deep dark, on a planet with limited physical resources, especially metals. This forces them to innovate within these constraints. So, while Trantor has city-sized shields, Terminus develops portable shields for individual use.

This is classic disruptive innovation—a paradigm introduced by Clay Christensen in “The Innovator’s Dilemma”, and expanded upon in the “The Innovator’s Solution”. Since then, disruption has been loosely (and incorrectly) used to describe just about any kind of business or technological change. Asimov’s writing, though, provides us with a truthful representation of Christensen’s paradigm of disruption.

Alert #2. If you are involved in technology design, development, or sales, read Christensen’s work. Your colleagues can thank me later.

Now, the business of making shields traditionally serves city governments. The Foundation starts serving individuals—a market segment that, thus far, did not have access to this technology. Christensen calls such a market segment, “non-consumers”. The Foundation’s innovation enables non-consumers to become consumers.

In its infancy, a disruptive innovation will be imperfect. However, it gains a foothold because it beats the status quo on dimensions that matter to non-consumers, such as affordability and portability. Non-consumers are willing to make this trade-off3.

Incumbents who are invested in the status quo do not see the power of the new entrant—not because they are blind, but because their incentives push them towards existing markets. Providing after-sales service to a city is likely to be much more lucrative than selling individual shields direct-to-consumers. However, once we fast-forward a few decades, individual shields eventually get so good that there is little incentive to shield entire cities. Incumbents have been disrupted by a new entrant.

Even if the scientific discovery took place in the incumbent’s organization, it is likely to be discarded because it conflicts with their existing business. The digital camera was invented at Kodak, but who would want to harm sales of camera film?

Every scientific discovery, even if it represents a breakthrough, is not disruptive. A better adhesive tape, or a faster laptop chip, are improvements on existing dimensions of performance, for existing markets. Neither do they introduce a new dimension of performance, nor do they reach non-consumers. Christensen terms these types of innovations, “sustaining”. Classifying an innovation as sustaining versus disruptive is not a value judgment4. Disruption describes a particular path to market dominance.

This path is characterized by systemic change—when a new set of actors find new ways to deliver products & services to non-consumers. In doing so, they trigger fundamental shifts, both technological and societal. Christensen articulates this paradigm of disruptive innovation eloquently, and Asimov explores the societal implications beautifully.

Footnotes

  1. Underneath the veneer of science fiction, the Foundation series is masterful socio-political tale. Some say that Asimov was inspired by the rise and fall of the Roman Empire in writing this series. In my humble opinion, he takes it much further—exploring nuances of the nature of power, jurisprudence, economic interdependence, and religion versus the state. ↩

  2. I always wanted to use the phrase “galactic primacy” in a blog post. ↩

  3. How do you know that a non-consumer is willing to make such a tradeoff? One way is to listen to the question they ask you. If they ask, “Why should I use it?”, then the status quo still dominates their choice. However, if they ask “When can I have it?”, then you may just be at the cusp of something great. ↩

  4. Disruptive innovation is held up as the poster child for change. Small, everyday improvements that add up to market-dominating competitive advantage are overlooked. We all prefer drama. ↩