Disruptive innovations are underestimated for three reasons

Established organizations tend to conclude that investing aggressively in disruptive technologies is not a rational financial decision for three main reasons:

• First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits.
• Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And
• third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies. By and large, a disruptive technology is initially embraced by the least profitable customers in a market.^[1]

#management #innovation

See also:

• Disruptive innovation is antithetical to good management
• Disruptive innovations underperform at the outset
• Sustaining innovations improve performance