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Why big companies squander good ideas | Financial Times
In 1990, a young economist named Rebecca Henderson published an article with her supervisor Kim Clark that presented a different view of why it is hard to do new things in old organisations. The relevant word is “organisations”.

Dominant organisations are prone to stumble when the new technology requires a new organisational structure. An innovation might be radical but, if it fits the structure that already existed, an incumbent firm has a good chance of carrying its lead from the old world to the new.
timharford  organisation  innovation  army  apple  disruption  digitaltransformation 
8 days ago by benterrett
Netflix Misunderstandings (Pt. 1 of 4)
In-depth analysis of common musundertanding about Netflix in the media production industry.
netflix  businessmodel  analyse  disruption  production  tv  cinema 
9 days ago by amicalmant
Why big companies squander good ideas
August 6, 2018 | | Financial Times | Tim Harford

.....Organisations from newspapers to oil majors to computing giants have persistently struggled to embrace new technological opportunities, or recognise new technological threats, even when the threats are mortal or the opportunities are golden. Why do some ideas slip out of the grasp of incumbents, then thrive in the hands of upstarts?.....“Disruption describes what happens when firms fail because they keep making the kinds of choices that made them successful,” says Joshua Gans, an economist at the Rotman School of Management in Toronto and author of The Disruption Dilemma. Successful organisations stick to their once-triumphant strategies, even as the world changes around them. More horses! More forage!

Why does this happen? Easily the most famous explanation comes from Clayton Christensen of Harvard Business School. Christensen’s 1997 book, The Innovator’s Dilemma, told a compelling story about how new technologies creep up from below: they are flawed or under-developed at first, so do not appeal to existing customers. Holiday snappers do not want to buy digital cameras the size of a shoebox and the price of a car.

However, Christensen explains, these technologies do find customers: people with unusual needs previously unserved by the incumbent players. The new technology gets better and, one day, the incumbent wakes up to discover that an upstart challenger has several years’ head start — and once-loyal customers have jumped ship.
............Within academia, Rebecca Henderson’s ideas about architectural innovation are widely cited, and she is one of only two academics at Harvard Business School to hold the rank of university professor. The casual observer of business theories, however, is far more likely to have heard of Clayton Christensen, one of the most famous management gurus on the planet.

That may be because Christensen has a single clear theory of how disruption happens — and a solution, too: disrupt yourself before you are disrupted by someone else. That elegance is something we tend to find appealing.

The reality of disruption is less elegant — and harder to solve. Kodak’s position may well have been impossible, no matter what managers had done. If so, the most profitable response would have been to vanish gracefully.

“There are multiple points of failure,” says Henderson. “There’s the problem of reorganisation. There’s the question of whether the new idea will be profitable. There are cognitive filters. There is more than one kind of denial. To navigate successfully through, an incumbent organisation has to overcome every one of these obstacles.”

......Henderson added that the innovators — like Fuller — are often difficult people. “The people who bug large organisations to do new things are socially awkward, slightly fanatical and politically often hopelessly naive.” Another point of failure......The message of Henderson’s work with Kim Clark and others is that when companies or institutions are faced with an organisationally disruptive innovation, there is no simple solution. There may be no solution at all. “I’m sorry it’s not more management guru-ish,” she tells me, laughing. “But anybody who’s really any good at this will tell you that this is hard.”
Apple  blitzkrieg  Clayton_Christensen  disruption  ideas  IBM  innovation  iPod  missed_opportunities  organizational_change  organizational_structure  Rotman  Steve_Jobs  theory  Tim_Harford  upstarts  large_companies  military  Walkman  WWI  Xerox 
10 days ago by jerryking
Steve Blank Is the Lean Startup Dead?
Lessons Learned:
When capital for startups is readily available at scale, it makes more sense to go big, fast and make mistakes than it does to search for product/market fit.
The amount of customer discovery and product-market fit you need to do is inversely proportional to the amount and availability of risk capital.
Still, unless your startup has access to large pools of capital or have a brand name like Katzenberg, Lean still makes sense.
Lean is now essential for companies and government agencies to deliver innovation at speed
The Lean Startup isn’t dead. For companies and government the next generation of Lean – the Innovation Pipeline – is more relevant than ever.
startups  economics  disruption 
11 days ago by euler
Tesla, software and disruption • Benedict Evans
Evans considers what parts of Tesla's IP might give it disruptive power: batteries, motors, software, "experience", or autonomous driving:
<p>Tesla’s first bet is that it will solve the vision-only problem before the [rivals'] other sensors get small and cheap, and that it will solve all the rest of the [self-driving] autonomy problems by then as well. This is strongly counter-consensus. It hopes to do it the harder way before anyone else does it the easier way. That is, it’s entirely possible that [Google's] Waymo, or someone else, gets autonomy to work in 202x with a $1000 or $2000 LIDAR and vision sensor suite and Tesla still doesn’t have it working with vision alone. 

The second bet is that Tesla will be able to get autonomy working with enough of a lead to benefit from a strong winner takes all effect - ‘more cars means more data means better autonomy means more cars’. After all, even if Tesla did get the vision-only approach working, it doesn’t necessarily follow that no-one else would. Hence, the bet is that autonomous capability will not be a commodity. 

This takes us back to the data. Tesla clearly has an asset in the data it can collect from the 200k+ Autopilot 2 cars it’s already sold. On the other hand, Waymo’s cars have driven 8m miles, doubling in the last year or so. Tesla’s have driven more (without LIDAR, but set that aside), but how much do you need? 

This is really a question about all machine learning projects: at what point are there diminishing returns as you add more data, and how many people can get that amount of data? It does seem as though there should be a ceiling for autonomy - if a car can drive in Naples for a year without ever getting confused, how much more is there to improve? At some point you’re effectively finished. So, how many cars do you need before your autonomy is as good as the best on the market? How many companies might be able to reach that? Is this 100 or a thousand cars driving for a year, or 1 million cars? And meanwhile, machine learning itself is changing quickly - one cannot rule out the possibility that the amount of data you need might shrink dramatically. 

So: it’s possible that Tesla gets SLAM working with vision, and gets the rest of autonomy working as well, and its data and its fleet makes it hard for anyone else to catch up for years. But it’s also possible that Waymo gets this working and decides to sell it to everyone.</p>

This article is quite hard to extract from, but that's pretty much the nut. Evans says he started out writing it as a comparison of Tesla and Netflix, but Tesla is too particular in so many ways.
disruption  tesla  innovation 
15 days ago by charlesarthur
Tesla, software and disruption — Benedict Evans
When Nokia people looked at the first iPhone, they saw a not-great phone
with some cool features that they were going to build too, being produced
at a small fraction of the volumes they were selling. They shrugged. “No
3G, and just look at the camera!”

When many car company people look at a Tesla, they see a not-great car with
some cool features that they’re going to build too, being produced at a
small fraction of the volumes they’re selling. “Look at the fit and finish,
tesla  disruption  benedictevans 
16 days ago by ravivyas

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