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Clayton Christensen asks, “What is it that kills successful companies?” His answer might surprise you.
According to Christensen, “It’s the principles of good management that we teach at the harvard business school that sow the seeds of every company’s ultimate failure.” Christensen wrote a book on this called The Innovators Dilemma, who’s central message was that if you become wildly successful because you do everything right—you’re doomed.
In the video’s below Christensen argues that disruptive technologies are often products that are not as good but are more affordable and simpler to use. These companies employ a business model that can make money at very low prices — they start at the bottom and move up.
“If the innovation in question is one that will help the leaders in the industry make better products they can sell for better profits to their best customers, in fact, I will always bet that the leaders will win that and if an entrant comes in they will get killed. But when a disruption comes in at the bottom of the market I will always bet against the leaders.”