I was lucky enough to build on the work of a number of people who had already run laps around this theory-building track. The original classification scheme, years ago, distinguished radical from incremental change. The theory said that established firms managed incremental change well, but would be expected to founder when their industry encountered a radical change.

The answer is the disruptive innovator, an outsider, who creates a product or service for the non-existing consumer in a non-existing market for almost no profit.

The innovations are far more important because the technology itself has now way to impact the world for good until it's embedded in the business model. Innovation it's the combination of the simplifying technology and the business model.

If a company truly wants to resolve the innovator's dilemma, it does need to be able to create wave after wave of disruptive innovation. And those disruptive innovations will typically grow to the point where they do cause some pain for leading companies. But most disruptive innovations create substantial new growth before they cause that pain.

When product performance outstrips the ability of customers to use that performance in an industry, the competitive game changes. Under those circumstances you have to decouple components businesses from assembly businesses.

An innovation will get traction only if it helps people get something that they're already doing in their lives done better.

One reason there are so many short-lived management fads is that their prescriptions were derived and advocated in precisely this way. So managers read about a fad and try it, find that it doesn't work, abandon the effort, and move on to the next thing. In reality, it is usually the case that the faddish prescription was indeed sound advice in certain circumstances, but actually was poor advice in other circumstances.