YouSaid · the spoken record

Clayton Christensen

lines on the record: 64
first: 2015-10-24
most recent: 2015-10-24
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Same reasons Actually, I've actually heard from Alvie Ray Smith, the co-founder of Pixar, that they used that exact formula in their head to actually then map out how they would intentionally disrupt the making of animated films because they were able to actually use it to like almost predictive power in a sense.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“Big iron, both literally and metaphorically, those big iron technologies improve relatively slowly. They improve on a mechanical clock speed, and so took 43 years. And then you look at disruptions in the tech space and you say, well, what about the personal computers? So the personal computer is clearly a disruption to mini computers and mainframes for all the same reasons. Started as toys, sold to hobbyists that couldn't do anything. What was the enabling technology there? What was the microprocessor? And the microprocessor, it gets better pretty quick. The difference is not the underlying phenomenon, nor the theory. It's an empirical observation, which is how fast does the enabling technology get better? That will tell you how quickly it will break the trade-offs that preclude it from serving mainstream markets.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I guess what I'd say is that when it comes to things happening faster, that speaks to the rate of change in the underlying enabling technology. Right. So if you look at disruption in the steel industry, right, how long did that take? So New Core is the archetypal disruptor in the steel business. Where did it start? It started with rebar, which is a low volume, low margin segment of the steel business that incumbent steelmakers were not motivated to defend. New Corps built a fundamentally different business around the mini mill. And then it took 43 years for New Core to become the same size as some of the largest integrated mills in the US. So why did it take 43? Well, it took 43 years. What was New Core's enabling technology? Well, it was electric arc furnaces and continuous casting. And those...”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“And begin to serve the mainstream markets that the incumbents do care about. But now it's too late because the incumbents can't respond because you have broken the trade offs that they were depending on, the trade-offs that made it impossible for them to serve the low end, you have never broken.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“So disruptors start in segments of the market that incumbents aren't motivated to fight for or fundamentally don't see. So we refer to that as either the low end or an entirely new market competing with non-consumption. So that's step one. Second is you have to have a fundamentally different business model that allows you to serve profitably the niche that the incumbents don't want. There's a reason the incumbents don't want to serve those niche markets because they can't do it profitably enough, right? And so you have to come up with a way to serve those segments profitably. If they lose money there and you say, well, I'll go lose money there too. That's not going to be a disruption. That's just losing money. So you have to have a different way of serving those segments. Then the last piece is this enabling technology. It's something that allows you to now take that same business model.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think it's a necessary condition. You don't have that, you don't have a disruption. So you pointed to a couple things, which is that a disruptor starts at the low end and a niche market. That's a defining feature. There are really three necessary and sufficient conditions, right? The first one that we pointed to was where you start. So first and foremost, disruption theory is a theory of customer dependence. You tell me who you are selling to, and I'll tell you whether you're embarking on a potentially disruptive trajectory of innovation.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this notion of what you called an accelerator, what I referred to as an enabling technology, what Clayton has referred to as an extensible core. So the fact that the language hasn't quite settled down shows that this is a relatively new addition to the theory. But I think a critically important one is one that a lot of people have walked past and fundamentally ignored.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, if I remember correctly, and actually I remember this learning this from you a few years ago, it's sort of the startup comes in the traditional disruption theory from the lower end of the market, usually with either lesser features Or just reaching a niche customer set that no one is reaching otherwise reaching. And then the other part of it, the second part of it that I remember was really key is that there's some kind of accelerator through technology that then drives them to be able to go up market.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“This small, you know, scrappy little upstart. How is it able to successfully overturn a successful incumbent? And so Clay chose the word disruption to describe that phenomenon. And it captures half of what's going on, right? The disruption is to the incumbent, and it describes a very particular pathway by which a startup and a new entrant more generally is able to enter and establish market.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“So his first book came out in 97. It was called The Innovator's Dilemma. And it started slow. It came out in'97, sold, you know, I'll get these numbers precisely wrong, but close enough, close enough, sold a few thousand copies over the next couple of years, and then it exploded in 1999. I think it was the January issue of, I think it was a cover of Forbes, and it had clay with Andy Grove. Caption read Andy Grove's big thinker and Clay 6'8 for those people who haven't met him and Andy Grove is probably, I don't know, 5'6". So it was a clever turn of phrase. In any event, then the book took off. And what that book described is a particular class of phenomena whereby companies are able, small, under-resourced startups very often are able successfully to enter markets that are dominated by well-managed incumbents. And so that was a puzzle. How's that possible?”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“I totally agree. And I think that's actually a great turn of phrase of verbal inflation. I mean, one could argue it's a disruption bubble. When Clay originally coined the phrase, use the word disruption theory, like what was the intent behind the original meaning”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“That's what people say. People say, oh, you know, this company is disrupting things. And that's supposed to be good. So, when they say that, they're invoking whether they know it or not, they're invoking the connotation that Clayton gave to the word with disruptive innovation and disruption theory. But unfortunately, they're using it then in a way that is, to my way of thinking at least, more often than not entirely disconnected from the specifics of what disruption theory actually describes. So we run into a circumstance where people use the word very frequently to describe all manner of phenomena. And the downside of that, and here's why this matters. The downside of that is that as a consequence of that verbal inflation, we actually lose our grip on the power and the insights that disruption theory brings. And that would be a shame.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's, I guess, in the first instance, they were going after a phenomenon that I think is definitely something worth trying to, I'll say combat at the risk of overstating the case, which is that the term disruption, I think, has come to be used far too frequently with far too little precision. Right. And I think that's unfortunate. I mean, in the first instance, disruption is a well-formed English word. You can look it up in the dictionary, right? But when people use it, especially when it comes in a business context, they forget what the word actually means. So disruption means to hold up something, to slow it down, to interrupt an otherwise smooth and even flow. So a disruptive student is not something that makes class better. That's someone who makes class worse. A disruption in subway service doesn't help you get where you want to go better or faster or cheaper.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, as I read it, I'd say it's even more than part of it. There have been a couple of critiques that have come out. There was a piece just over a year ago in the New Yorker that was very pointedly about Clayton and disruption theory. There's a piece come out recently in the Sloan Management Review that's similarly sort of an attempt to look at the theory and say, so here's where it goes too far, where it makes mistakes, and I think that's important, actually. I mean, that's how we progress, right? Constantly saying we got it right the first time doesn't take you anywhere new conceptually at least, it's easy to embrace that kind of give and take, that kind of discussion.”
2015-10-24 · a16z Podcast · a16z Podcast: Holy Non Sequiturs, Batman: What Disruption Theory Is ... and Isn't · IDENTIFIED FROM THE TRANSCRIPT · source