Book notes and extracts
These are some of the books that have had positive impact on me, I have accumulated some notes about them while reading them - Use this as a guide to be inspired, or to simply get hold of the book and read it in full.
Disclaimer: This page was created with inspirations from Derek Sivers
What does this mean?
People with a fixed mindset believe that their abilities are basically static whereas people with a growth mindset believe abilities are like muscles that can be built up with practice. With a growth mindset you tend to accept more challenges despite the risk of failure, therefore if you are of a growth mindset you seek to get better all the time; which usually means learning from mistakes.What does this have to do with innovation?
“He who has a Why to live for can bear almost any How.”
==========
"Forces beyond your control can take away everything you possess except one thing, your freedom to choose how you will respond to the situation. You cannot control what happens to you in life, but you can always control what you will feel and do about what happens to you."
==========
“It is a peculiarity of man that he can only live by looking to the future - sub specie aeternitatis. And this is his salvation in the most difficult moments of his existence, although he sometimes has to force his mind to the task.”
Emotion, which is suffering, ceases to be suffering as soon as we form a clear and precise picture of it.
==========
"That is why I speak of a will to meaning in contrast to the pleasure principle (or, as we could also term it, the will to pleasure) on which Freudian psychoanalysis is centered, as well as in contrast to the will to power on which Adlerian psychology, using the term “striving for superiority,” is focused."
==========
Instead, he either wishes to do what other people do (conformism) or he does what other people wish him to do (totalitarianism).
==========
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change) (Clayton M. Christensen)
how disruption is so devastating to even well managed companies, this particular point made is very scary
==========
If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies’ problems—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem. Sound execution, speed-to-market, total quality management, and process reengineering are similarly ineffective. Needless to say, this is disquieting news to people who teach future managers!
==========
Value of an organization:
An organization’s capabilities reside in two places. The first is in its processes—the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. The second is in the organization’s values, which are the criteria that managers and employees in the organization use when making prioritization decisions.
==========
Today small can be extremely large and monstrous tomorrow:
Disruptive technologies, though they initially can only be used in small markets remote from the mainstream, are disruptive because they subsequently can become fully performance-competitive within the mainstream market against established products. As depicted in Figure I.1 (on page xvi), this happens because the pace of technological progress in products frequently exceeds the rate of performance improvement that mainstream customers demand or can absorb. As a consequence, products whose features and functionality closely match market needs today often follow a trajectory of improvement by which they overshoot mainstream market needs tomorrow. And products that seriously underperform today, relative to customer expectations in mainstream markets, may become directly performance-competitive tomorrow.
==========
Disruptive products lifecycle & disruptive products choice from customers:
Performance-reliability-usability-price
The basis of product choice often evolves from functionality to reliability, then to convenience, and, ultimately, to price.
==========
Reason why startups are successful
==========
the problem established firms seem unable to confront successfully is that of downward vision and mobility, in terms of the trajectory map. Finding new applications and markets for these new products seems to be a capability that each of these firms exhibited once, upon entry, and then apparently lost. It
==========
The issue with having a sub organization in product dev not being involved in overall decision process causes a drastic issue to the sub org when a major change comes by:
Organizational structures typically facilitate component-level innovations, because most product development organizations consist of subgroups that correspond to a product’s components. Such systems work very well as long as the product’s fundamental architecture does not require change. But, say the authors, when architectural technology change is required, this type of structure impedes innovations that require people and groups to communicate and work together in new ways.
==========
Value network:
The concept of the value network—the context within which a firm identifies and responds to customers’ needs, solves problems, procures input, reacts to competitors, and strives for profit—is central to this synthesis.
==========
How disruptive tech kicks ass the incumbents:
Disruptive technologies emerge and progress on their own, uniquely defined trajectories, in a home value network. If and when they progress to the point that they can satisfy the level and nature of performance demanded in another value network, the disruptive technology can then invade it, knocking out the established technology and its established practitioners, with stunning speed.
==========
The key concept behind why large companies cannot be disruptive on heir own:
Seagate are not likely to build market-leading positions in flash memory. This is not because the technology is too difficult or their organizational structures impede effective development, but because their resources will become absorbed in fighting for and defending larger chunks of business in the mainstream disk drive value networks in which they currently make their money.
==========
the biggest entry barrier for large companies:
“the most formidable barrier the established firms faced is that they did not want to do this: important point of how to look at prioritizing features
==========
Hence, middle managers—acting in both their own and the company’s interest—tend to back those projects for which market demand seems most assured. They then work to package the proposals for their chosen projects in ways geared to win senior management approval.
Do startups succeed because they don’t have good management at lead to begin with
==========
The reason is that good management itself was the root cause:
==========
The hunger and grit that once drives a startup towards a vision needs to be replicated and reengineered again and again for a startup to become a visionary
Nurturing disruptive technologies—to focus resources on proposals that customers reject, that offer lower profit, that underperform existing technologies and can only be sold in insignificant markets—is akin to flapping one’s arms with wings strapped to them in an attempt to fly. Such expectations involve fighting some fundamental tendencies about the way successful organizations work and about how their performance is evaluated.
==========
Key take aways from this book:
Resource dependence: Customers effectively control the patterns of resource allocation in well-run companies. Small markets don’t solve the growth needs of large companies. The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an intrinsic step toward success. Organizations have capabilities that exist independently of the capabilities of the people who work within them. Organizations’ capabilities reside in their processes and their
values—and the very processes and values that constitute their core capabilities within the current business model also define their disabilities when confronted with disruption. Technology supply may not equal market demand. The attributes that make disruptive technologies unattractive in established markets often are the very ones that constitute their greatest value in emerging markets.
==========
Aligning oneself after a thorough understanding of the physical and psychological laws is critical.
At a more serious level, the desirability of aligning our actions with the amore powerful laws of nature, society, and psychology, in order to lead a productive life, is a central theme in many works, particularly the ancient Chinese classic, Tao te Ching.
==========
Resource allocation influences innovation
==========
Customers don’t want a product, it won’t get funded; if they do want it, it will. This is how things must work in great companies.
==========
A key aspect that determines the success
Managers who confront disruptive technological change must be leaders, not followers, in commercializing disruptive technologies.
==========
For disruptive technologies - this determines success
Whether a firm was a start-up or a diversified firm had little impact on its success rate. What mattered appears not to have been its organizational form, but whether it was a leader in introducing disruptive products and creating the markets in which they were sold.
==========
Strategies to make disruption real
Try to affect the growth rate of the emerging market, so that it becomes big enough, fast enough, to make a meaningful dent on the trajectory of profit and revenue growth of a large company. Wait until the market has emerged and become better defined, and then enter after it “has become large enough to be interesting.” Place responsibility to commercialize disruptive technologies in organizations small enough that their performance will be meaningfully affected by the revenues, profits, and small orders flowing from the disruptive business in its earliest years.
==========
How disruption starts and how it grows
Apple Computer introduced its Apple I in 1976. It was at best a preliminary product with limited functionality, and the company sold a total of 200 units at $666 each before withdrawing it from the market. But the Apple I wasn’t a financial disaster. Apple had spent modestly on its development, and both Apple and its customers learned a lot about how desktop personal computers might be used. Apple incorporated this learning into its Apple II computer, introduced in 1977, which was highly successful. Apple sold 43,000 Apple II computers in the first two years they were on the market, 11 and the product’s success positioned the company as the leader in the personal computer industry. On the basis of the Apple II’s success Apple went public in 1980.
==========
Are you at the same place?
Was a market-creating, disruptive product targeted at an undefinable set of users whose needs were unknown to either themselves or Apple.
==========
the key challenge with disruptive products
Disruptive technologies often enable something to be done that previously had been deemed impossible. Because of this, when they initially emerge, neither manufacturers nor customers know how or why the products will be used, and hence do not know what specific features of the product will and will not ultimately be valued.
==========
This is why at times startups feel slow
==========
Building such markets entails a process of mutual discovery by customers and manufacturers—and this simply takes time.
Beliefis are so important:
Every innovation is difficult. That difficulty is compounded immeasurably, however, when a project is embedded in an organization in which most people are continually questioning why the project is being done at all.
==========
The startups are privileged compare to large firms
This recommendation is not new, of course; a host of other management scholars have also argued that smallness and independence confer certain advantages in innovation.
==========
The most important thing for an entrepreneur to know - investors hardly can understand this
Markets that do not exist cannot be analyzed: Suppliers and customers must discover them together.
==========
Not only are the market applications for disruptive technologies unknown at the time of their development, they are unknowable.
==========
Its so critical to be agile esecially in the early stages of starting sokmething new
Research has shown, in fact, that the vast majority of successful new business ventures abandoned their original business strategies when they began implementing their initial plans and learned what would and would not work in the market.
==========
Discovering markets for emerging technologies inherently involves failure, and most individual decision makers find it very difficult to risk backing a project that might fail because the market is not there.
==========
Plans to Learn versus Plans to Execute
However, managers confronting disruptive technologies need to get out of their laboratories and focus groups and directly create knowledge about new customers and new applications through discovery-driven expeditions into the marketplace.
==========
Hit the road as early as possible
However, managers confronting disruptive technologies need to get out of their laboratories and focus groups and directly create knowledge about new customers and new applications through discovery-driven expeditions into the marketplace.
==========
Managers will also assess the employee’s values—the criteria by which he or she tends to decide what should and shouldn’t be done.
Managers will also assess the employee’s values—the criteria by which he or she tends to decide what should and shouldn’t be done. Indeed, the hallmark of a great manager is the ability to identify the right person for the right job, and to train his or her employees so that they have the capabilities to succeed at the jobs they are given.
==========
Key critical item for expanding capabilities
To succeed consistently, good managers need to be skilled not just in choosing, training, and motivating the right people for the right job, but in choosing, building, and preparing the right organization for the job as well.
==========
why focus is the key:
The reason good managers strive for focus in their organizations is that processes and tasks can be readily aligned. 5
==========
The processes that render good companies incapable of responding to change are often those that define how market research is habitually done; how such analysis is translated into financial projections; how plans and budgets are negotiated and how those numbers are delivered; and so on. These typically inflexible processes are where many organizations’ most serious disabilities in coping with change reside.
==========
Some of the most crucial processes to examine as capabilities or disabilities aren’t the obvious value-adding processes involved in logistics, development, manufacturing, and customer service. Rather, they are the enabling or background processes
==========
One of the fundamental criteria for any company that is often not accounted for in early stages esp. startups
==========
But within the Resources-Processes-Values (RPV) framework, values have a broader meaning. An organization’s values are the standards by which employees make prioritization decisions—by which they judge whether an order is attractive or unattractive;
==========
In fact, one reason that many soaring young companies flame out after they go public based upon a hot initial product is that whereas their initial success was grounded in resources— the founding group of engineers—they fail to create processes that can create a sequence of hot products.
==========
But the company is able to crank out high-quality work year after year because its core capabilities are rooted in its processes and values rather than in its resources. I sense, however, that these capabilities of McKinsey also constitute its disabilities. The rigorously analytical, data-driven processes that help it create value for its clients in existing, relatively stable markets render it much less capable of building a strong client base among the rapidly growing companies in dynamic technology markets.
==========
Founder's guidelines
The founder often has strong opinions about the way employees ought to work together to reach decisions and get things done.
==========
Second guideline
Founders similarly impose their views of what the organization’s priorities need to be.
==========
This is a critical point and every manager has to be aware of this:
Hence, the location of the most powerful factors that define the capabilities and disabilities of organizations migrates over time —from resources toward visible, conscious processes and values, and then toward culture.
==========
Acquire a different organization whose processes and values are a close match with the new task Try to change the processes and values of the current organization Separate out an independent organization and develop within it the new processes and values that are required to solve the new problem
==========
Things organization can do when having to deal with building capabilities for a change
& The summary of the frame work
Managers whose organizations are confronting change must first determine that they have the resources required to succeed. They then need to ask a separate question: does the organization have the processes and values to succeed? Asking this second question is not as instinctive for most managers because the processes by which work is done and the values by which employees make their decisions have served them well.
==========
Solving starts with identification
If the answer to these questions is no, it’s okay. Understanding problems is the most crucial step in solving them.
==========
Buying hierarchy:
buying hierarchy by its creators, Windermere Associates of San Francisco, California, which describes as typical the following four phases: functionality, reliability, convenience, and price.
==========
Moore suggests that products are initially used by innovators and early adopters in an industry—customers who base their choice solely on the product’s functionality.
==========
During this phase the top-performing products command significant price premiums.
==========
this is where the influx happens
==========
Moore observes that markets then expand dramatically after the demand for functionality in the mainstream market has been met, and vendors begin to address the need for reliability among what he terms early majority customers.
==========
This is the growth
==========
A third wave of growth occurs when product and vendor reliability issues have been resolved, and the basis of innovation and competition shifts to convenience, thus pulling in the late majority customers.
==========
First, the attributes that make disruptive products worthless in mainstream markets typically become their strongest selling points in emerging markets;
==========
a key selling item
disruptive products tend to be simpler, cheaper, and more reliable and convenient than established products.
==========
If history is any guide, companies that keep disruptive technologies bottled up in their labs, working to improve them until they suit mainstream markets, will not be nearly as successful as firms that find markets that embrace the attributes of disruptive technologies as they initially stand.
==========
The strategic alternatives available to companies facing performance oversupply and the consequent likelihood that disruptive approaches will change the nature of competition in their industry. The first general option, labeled strategy 1 and the one most commonly pursued in the industries explored in this book, is to ascend the trajectory of sustaining technologies into ever-higher tiers of the market, ultimately abandoning lower-tier customers when simpler, more convenient, or less costly disruptive approaches emerge.
==========
Second alternative, labeled strategy 2, is to march in lock-step with the needs of customers in a given tier of the market, catching successive waves of change in the basis of competition. Historically, this appears to have been difficult to do,
==========
The third strategic option for dealing with these dynamics is to use marketing initiatives to steepen the slopes of the market trajectories so that customers demand the performance improvements that the technologists provide. Since a necessary condition for the playing out of these dynamics is that the slope of the technology trajectory be steeper than the market’s trajectory, when the two slopes are parallel, performance oversupply—and the progression from one stage of the product life cycle to the next—does not occur or is at least postponed.
==========
Point one: First step to identify whether a technology is disruptive and can affect existing tech
The first step in making this chart involves defining current mainstream market needs and comparing them with the current capacity of electric vehicles.
==========
To measure market needs, I would watch carefully what customers do, not simply listen to what they say. Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.
==========
Point two - to take note of:
They will only be disruptive if we find that they are also on a trajectory of improvement that might someday make them competitive in parts of the mainstream market.
==========
the technology will progress faster than the pace of improvement demanded in the market, then the threat of disruption is real.
==========
if the technology will progress faster than the pace of improvement demanded in the market, then the threat of disruption is real.
==========
Defining market flor disruptive tech:
First, I would acknowledge that, by definition, electric vehicles cannot initially be used in mainstream applications because they do not satisfy the basic performance requirements of that market.
==========
Point three to take note of:
Government mandates, incidentally, are likely to distort rather than solve the problem of finding a market. I would, therefore, force my organization to live by its wits rather than to rely on capricious subsidies or noneconomic–based California regulation to fuel my business.
==========
another crucial point
The second point on which I would base my marketing approach is that no one can learn from market research what the early market(s) for electric vehicles will be.
Another key point
==========
The third point is that business plan must be a plan for learning, not one for executing a preconceived strategy.
==========
Markets are developed with fine products that customers desire to own. No salesman can take marginal product into the marketplace and have any hope of establishing a sustainable consumer base. Consumers will not be forced into a purchase that they do not want. Mandates will not work in a consumer-driven, free market economy.
==========
Hence disruptive products or technology is not invented but is innovated
Historically, disruptive technologies involve no new technologies; rather, they consist of components built around proven technologies and put together in a novel product architecture that offers the customer a set of attributes never before available.
==========
First, the pace of progress that markets demand or can absorb may be different from the progress offered by technology.
==========
Second, managing innovation mirrors the resource allocation process: Innovation proposals that get the funding and manpower they require may succeed; those given lower priority, whether formally or de facto, will starve for lack of resources and have little chance of success.
==========
Third, just as there is a resource allocation side to every innovation problem, matching the market to the technology is another.
==========
Fourth, the capabilities of most organizations are far more specialized and context-specific than most managers are inclined to believe.
==========
Fifth, in many instances, the information required to make large and decisive investments in the face of disruptive technology simply does not exist.
==========
Sixth, it is not wise to adopt a blanket technology strategy to be always a leader or always a follower.
==========
Seventh, and last, the research summarized in this book suggests that there are powerful barriers to entry and mobility that differ significantly from the types defined and historically focused on by economists.
"they won’t just get better at the kinds of things people already do; they’ll help us to do what was previously unimaginable"
==========
What should a new startup be thinking about when he starts some thing new?
==========
The Engineering Question 1. Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question Is now the right time to start your particular business? 3. The Monopoly Question Are you starting with a big share of a small market? 4. The People Question Do you have the right team? 5. The Distribution Question Do you have a way to not just create but deliver your product? 6. The Durability Question Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question Have you identified a unique opportunity that others don’t see?
==========
"WHENEVER I INTERVIEW someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”
“Even if the probability for success is fairly low, if the objective is really important, it’s still worth doing. Conversely, if the objective is less important, then the probability needs to be much greater. How I decide which projects to take on depends on probability multiplied by the importance of the objective.”
==========
The adoption of new technology finally occurs when ease of use, economic savings, and trust all come together to work toward change.
==========
Disclaimer: This page was created with inspirations from Derek Sivers
Switch (Chip, Heath)
Great tool for workshops
Read the following four sentences, and write down whether you agree or disagree with each of them: You are a certain kind of person, and there is not much that can be done to really change that. No matter what kind of person you are, you can always change substantially. You can do things differently, but the important parts of who you are can’t really be changed. You can always change basic things about the kind of person you are.If you agree with items 1 and 3, you’re someone who has a ’fixed mindset’. If you agreed with items 2 and 4, you tend to have a ‘growth mindset’.
What does this mean?
People with a fixed mindset believe that their abilities are basically static whereas people with a growth mindset believe abilities are like muscles that can be built up with practice. With a growth mindset you tend to accept more challenges despite the risk of failure, therefore if you are of a growth mindset you seek to get better all the time; which usually means learning from mistakes.What does this have to do with innovation?
As the authors of the article say, fear of failure makes growing, getting smarter, and becoming a learning organization all but impossible. So if we are to cultivate ‘innovativeness’ in our organizations we must first instill the growth mindset in our team and then work to change how we perceive failure by coming to a collective understanding that failure will happen along the way of any new initiative we pursue.
==========
As Carol Dweck says: People will persevere only if they perceive failure as learning rather than as failing.
==========
They think if something is simple enough to be put in a checklist, a monkey can do it. Well, if that’s true, grab a pilot’s checklist and try your luck with a 747.
==========
on line tracking and public transparency leads to compliance
==========
Cachon’s game plan provides a great review of the Switch framework. First, he spoke to his constituents’ Riders by pointing to the destination. “I knew there was a collective goal that I could appeal to,” he said. “Every author wants fast cycle time and is willing to provide it if everyone else does. But no one wants to be the one sucker who provides the fast lead time, and then when they submit their papers it takes forever.” Cachon announced that MSOM would review papers within sixty-five days—that was 72 percent faster than its previous average! Second, he appealed to identity. We’re operations people, for Pete’s sake. We should be leading the way on efficiency and turnaround time! Third, he defined a clear behavior: Every reviewer had to submit feedback within five weeks. Cachon got the reviewers to commit up front that they could meet the deadline. Finally, Cachon found a way to rally the herd. Every Friday, he posted an Excel spreadsheet on the internet that showed the status of every paper submitted to the journal. Every reviewer could see what the other reviewers had done (and when). If they violated their five-week commitment, the tracking sheet created powerful pressure, especially when Cachon called them and said, “Look, other people are doing this on time, and, by the way, here’s the data.” When people saw the data, they realized, Whoops, I’m the bottleneck.
==========
moving the herd is all about communicating to the herd positively
==========
With the online tracking sheet, Cachon was using the hotel-towel strategy. He was publicizing the group norm. Other people are getting their work done on time. Why won’t you? Cachon set out to make good behavior contagious, and he succeeded. As a result of Cachon’s brilliant plan, MSOM now has the fastest turnaround time of any journal in the field of management science. And, because of his work, Cachon was asked to take over the flagship journal of the whole field, Management Science. Cachon said, “Now, when people get their reviews in fifty days, they come back and say, ‘Wow! I can still remember the paper!’”
==========
addiction = elephant is the culprit,
Jerry Sternin died in November 2008. His work lives on through the work of Monique Sternin and the Positive Deviance Initiative at Tufts University. For an overview of the large number of domains in which positive deviance methods have produced substantial change, see the bibliography of work at http://www.positivedeviance.org/materials/bib_subj.html. Positive deviance was one of the “Ideas of the Year” highlighted by New York Times Magazine in 2008.
In any addiction situation, the Elephant is the culprit.
path is sometimes the bigger issue than the person orbhis or her mindset. changing the path is crucial to make the person to tbink about changing his mindset
==========
If the right Path can turn a jerk into a saint, then the right Path can also turn a change enemy into an ally.
==========
yes, a long journey starts with a single step, but a single step doesn’t guarantee the long journey. How do you keep those steps coming?
==========
Learning to spot and celebrate approximations requires us to scan the environment constantly, looking for little rays of sunshine, and it isn’t easy. Our Riders, by nature, focus on the negative. Problems are easy to spot; progress, much harder.
==========
Change isn’t an event; it’s a process.
==========
Also, cognitive dissonance works in your favor. People don’t like to act in one way and think in another. So once a small step has been taken, and people have begun to act in a new way, it will be increasingly difficult for them to dislike the way they’re acting. Similarly, as people begin to act differently, they’ll start to think of themselves differently, and as their identity evolves, it will reinforce the new way of doing things.
==========
==========
Mindset, by Carol Dweck [Psychology, Individual change]. If you found our discussion of the growth mindset (in Chapter 7) interesting, then please go to the source. Everyone should own this book.
==========
“Solution-focused therapy"
“He who has a Why to live for can bear almost any How.”
==========
"Forces beyond your control can take away everything you possess except one thing, your freedom to choose how you will respond to the situation. You cannot control what happens to you in life, but you can always control what you will feel and do about what happens to you."
==========
“It is a peculiarity of man that he can only live by looking to the future - sub specie aeternitatis. And this is his salvation in the most difficult moments of his existence, although he sometimes has to force his mind to the task.”
==========
Emotion, which is suffering, ceases to be suffering as soon as we form a clear and precise picture of it.==========
"That is why I speak of a will to meaning in contrast to the pleasure principle (or, as we could also term it, the will to pleasure) on which Freudian psychoanalysis is centered, as well as in contrast to the will to power on which Adlerian psychology, using the term “striving for superiority,” is focused."
==========
Instead, he either wishes to do what other people do (conformism) or he does what other people wish him to do (totalitarianism).
==========
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change) (Clayton M. Christensen)
how disruption is so devastating to even well managed companies, this particular point made is very scary
==========
If good management practice drives the failure of successful firms faced with disruptive technological change, then the usual answers to companies’ problems—planning better, working harder, becoming more customer-driven, and taking a longer-term perspective—all exacerbate the problem. Sound execution, speed-to-market, total quality management, and process reengineering are similarly ineffective. Needless to say, this is disquieting news to people who teach future managers!
==========
Value of an organization:
An organization’s capabilities reside in two places. The first is in its processes—the methods by which people have learned to transform inputs of labor, energy, materials, information, cash, and technology into outputs of higher value. The second is in the organization’s values, which are the criteria that managers and employees in the organization use when making prioritization decisions.
==========
Today small can be extremely large and monstrous tomorrow:
Disruptive technologies, though they initially can only be used in small markets remote from the mainstream, are disruptive because they subsequently can become fully performance-competitive within the mainstream market against established products. As depicted in Figure I.1 (on page xvi), this happens because the pace of technological progress in products frequently exceeds the rate of performance improvement that mainstream customers demand or can absorb. As a consequence, products whose features and functionality closely match market needs today often follow a trajectory of improvement by which they overshoot mainstream market needs tomorrow. And products that seriously underperform today, relative to customer expectations in mainstream markets, may become directly performance-competitive tomorrow.
==========
Disruptive products lifecycle & disruptive products choice from customers:
Performance-reliability-usability-price
The basis of product choice often evolves from functionality to reliability, then to convenience, and, ultimately, to price.
==========
Reason why startups are successful
==========
the problem established firms seem unable to confront successfully is that of downward vision and mobility, in terms of the trajectory map. Finding new applications and markets for these new products seems to be a capability that each of these firms exhibited once, upon entry, and then apparently lost. It
==========
The issue with having a sub organization in product dev not being involved in overall decision process causes a drastic issue to the sub org when a major change comes by:
Organizational structures typically facilitate component-level innovations, because most product development organizations consist of subgroups that correspond to a product’s components. Such systems work very well as long as the product’s fundamental architecture does not require change. But, say the authors, when architectural technology change is required, this type of structure impedes innovations that require people and groups to communicate and work together in new ways.
==========
Value network:
The concept of the value network—the context within which a firm identifies and responds to customers’ needs, solves problems, procures input, reacts to competitors, and strives for profit—is central to this synthesis.
==========
How disruptive tech kicks ass the incumbents:
Disruptive technologies emerge and progress on their own, uniquely defined trajectories, in a home value network. If and when they progress to the point that they can satisfy the level and nature of performance demanded in another value network, the disruptive technology can then invade it, knocking out the established technology and its established practitioners, with stunning speed.
==========
The key concept behind why large companies cannot be disruptive on heir own:
Seagate are not likely to build market-leading positions in flash memory. This is not because the technology is too difficult or their organizational structures impede effective development, but because their resources will become absorbed in fighting for and defending larger chunks of business in the mainstream disk drive value networks in which they currently make their money.
==========
the biggest entry barrier for large companies:
“the most formidable barrier the established firms faced is that they did not want to do this: important point of how to look at prioritizing features
==========
Hence, middle managers—acting in both their own and the company’s interest—tend to back those projects for which market demand seems most assured. They then work to package the proposals for their chosen projects in ways geared to win senior management approval.
Do startups succeed because they don’t have good management at lead to begin with
==========
The reason is that good management itself was the root cause:
==========
The hunger and grit that once drives a startup towards a vision needs to be replicated and reengineered again and again for a startup to become a visionary
Nurturing disruptive technologies—to focus resources on proposals that customers reject, that offer lower profit, that underperform existing technologies and can only be sold in insignificant markets—is akin to flapping one’s arms with wings strapped to them in an attempt to fly. Such expectations involve fighting some fundamental tendencies about the way successful organizations work and about how their performance is evaluated.
==========
Key take aways from this book:
Resource dependence: Customers effectively control the patterns of resource allocation in well-run companies. Small markets don’t solve the growth needs of large companies. The ultimate uses or applications for disruptive technologies are unknowable in advance. Failure is an intrinsic step toward success. Organizations have capabilities that exist independently of the capabilities of the people who work within them. Organizations’ capabilities reside in their processes and their
values—and the very processes and values that constitute their core capabilities within the current business model also define their disabilities when confronted with disruption. Technology supply may not equal market demand. The attributes that make disruptive technologies unattractive in established markets often are the very ones that constitute their greatest value in emerging markets.
==========
Aligning oneself after a thorough understanding of the physical and psychological laws is critical.
At a more serious level, the desirability of aligning our actions with the amore powerful laws of nature, society, and psychology, in order to lead a productive life, is a central theme in many works, particularly the ancient Chinese classic, Tao te Ching.
==========
Resource allocation influences innovation
==========
Customers don’t want a product, it won’t get funded; if they do want it, it will. This is how things must work in great companies.
==========
A key aspect that determines the success
Managers who confront disruptive technological change must be leaders, not followers, in commercializing disruptive technologies.
==========
For disruptive technologies - this determines success
Whether a firm was a start-up or a diversified firm had little impact on its success rate. What mattered appears not to have been its organizational form, but whether it was a leader in introducing disruptive products and creating the markets in which they were sold.
==========
Strategies to make disruption real
Try to affect the growth rate of the emerging market, so that it becomes big enough, fast enough, to make a meaningful dent on the trajectory of profit and revenue growth of a large company. Wait until the market has emerged and become better defined, and then enter after it “has become large enough to be interesting.” Place responsibility to commercialize disruptive technologies in organizations small enough that their performance will be meaningfully affected by the revenues, profits, and small orders flowing from the disruptive business in its earliest years.
==========
How disruption starts and how it grows
Apple Computer introduced its Apple I in 1976. It was at best a preliminary product with limited functionality, and the company sold a total of 200 units at $666 each before withdrawing it from the market. But the Apple I wasn’t a financial disaster. Apple had spent modestly on its development, and both Apple and its customers learned a lot about how desktop personal computers might be used. Apple incorporated this learning into its Apple II computer, introduced in 1977, which was highly successful. Apple sold 43,000 Apple II computers in the first two years they were on the market, 11 and the product’s success positioned the company as the leader in the personal computer industry. On the basis of the Apple II’s success Apple went public in 1980.
==========
Are you at the same place?
Was a market-creating, disruptive product targeted at an undefinable set of users whose needs were unknown to either themselves or Apple.
==========
the key challenge with disruptive products
Disruptive technologies often enable something to be done that previously had been deemed impossible. Because of this, when they initially emerge, neither manufacturers nor customers know how or why the products will be used, and hence do not know what specific features of the product will and will not ultimately be valued.
==========
This is why at times startups feel slow
==========
Building such markets entails a process of mutual discovery by customers and manufacturers—and this simply takes time.
Beliefis are so important:
Every innovation is difficult. That difficulty is compounded immeasurably, however, when a project is embedded in an organization in which most people are continually questioning why the project is being done at all.
==========
The startups are privileged compare to large firms
This recommendation is not new, of course; a host of other management scholars have also argued that smallness and independence confer certain advantages in innovation.
==========
The most important thing for an entrepreneur to know - investors hardly can understand this
Markets that do not exist cannot be analyzed: Suppliers and customers must discover them together.
==========
Not only are the market applications for disruptive technologies unknown at the time of their development, they are unknowable.
==========
Its so critical to be agile esecially in the early stages of starting sokmething new
Research has shown, in fact, that the vast majority of successful new business ventures abandoned their original business strategies when they began implementing their initial plans and learned what would and would not work in the market.
==========
Discovering markets for emerging technologies inherently involves failure, and most individual decision makers find it very difficult to risk backing a project that might fail because the market is not there.
==========
Plans to Learn versus Plans to Execute
However, managers confronting disruptive technologies need to get out of their laboratories and focus groups and directly create knowledge about new customers and new applications through discovery-driven expeditions into the marketplace.
==========
Hit the road as early as possible
However, managers confronting disruptive technologies need to get out of their laboratories and focus groups and directly create knowledge about new customers and new applications through discovery-driven expeditions into the marketplace.
==========
Managers will also assess the employee’s values—the criteria by which he or she tends to decide what should and shouldn’t be done.
Managers will also assess the employee’s values—the criteria by which he or she tends to decide what should and shouldn’t be done. Indeed, the hallmark of a great manager is the ability to identify the right person for the right job, and to train his or her employees so that they have the capabilities to succeed at the jobs they are given.
==========
Key critical item for expanding capabilities
To succeed consistently, good managers need to be skilled not just in choosing, training, and motivating the right people for the right job, but in choosing, building, and preparing the right organization for the job as well.
==========
why focus is the key:
The reason good managers strive for focus in their organizations is that processes and tasks can be readily aligned. 5
==========
The processes that render good companies incapable of responding to change are often those that define how market research is habitually done; how such analysis is translated into financial projections; how plans and budgets are negotiated and how those numbers are delivered; and so on. These typically inflexible processes are where many organizations’ most serious disabilities in coping with change reside.
==========
Some of the most crucial processes to examine as capabilities or disabilities aren’t the obvious value-adding processes involved in logistics, development, manufacturing, and customer service. Rather, they are the enabling or background processes
==========
One of the fundamental criteria for any company that is often not accounted for in early stages esp. startups
==========
But within the Resources-Processes-Values (RPV) framework, values have a broader meaning. An organization’s values are the standards by which employees make prioritization decisions—by which they judge whether an order is attractive or unattractive;
==========
In fact, one reason that many soaring young companies flame out after they go public based upon a hot initial product is that whereas their initial success was grounded in resources— the founding group of engineers—they fail to create processes that can create a sequence of hot products.
==========
But the company is able to crank out high-quality work year after year because its core capabilities are rooted in its processes and values rather than in its resources. I sense, however, that these capabilities of McKinsey also constitute its disabilities. The rigorously analytical, data-driven processes that help it create value for its clients in existing, relatively stable markets render it much less capable of building a strong client base among the rapidly growing companies in dynamic technology markets.
==========
Founder's guidelines
The founder often has strong opinions about the way employees ought to work together to reach decisions and get things done.
==========
Second guideline
Founders similarly impose their views of what the organization’s priorities need to be.
==========
This is a critical point and every manager has to be aware of this:
Hence, the location of the most powerful factors that define the capabilities and disabilities of organizations migrates over time —from resources toward visible, conscious processes and values, and then toward culture.
==========
Acquire a different organization whose processes and values are a close match with the new task Try to change the processes and values of the current organization Separate out an independent organization and develop within it the new processes and values that are required to solve the new problem
==========
Things organization can do when having to deal with building capabilities for a change
& The summary of the frame work
Managers whose organizations are confronting change must first determine that they have the resources required to succeed. They then need to ask a separate question: does the organization have the processes and values to succeed? Asking this second question is not as instinctive for most managers because the processes by which work is done and the values by which employees make their decisions have served them well.
==========
Solving starts with identification
If the answer to these questions is no, it’s okay. Understanding problems is the most crucial step in solving them.
==========
Buying hierarchy:
buying hierarchy by its creators, Windermere Associates of San Francisco, California, which describes as typical the following four phases: functionality, reliability, convenience, and price.
==========
Moore suggests that products are initially used by innovators and early adopters in an industry—customers who base their choice solely on the product’s functionality.
==========
During this phase the top-performing products command significant price premiums.
==========
this is where the influx happens
==========
Moore observes that markets then expand dramatically after the demand for functionality in the mainstream market has been met, and vendors begin to address the need for reliability among what he terms early majority customers.
==========
This is the growth
==========
A third wave of growth occurs when product and vendor reliability issues have been resolved, and the basis of innovation and competition shifts to convenience, thus pulling in the late majority customers.
==========
First, the attributes that make disruptive products worthless in mainstream markets typically become their strongest selling points in emerging markets;
==========
a key selling item
disruptive products tend to be simpler, cheaper, and more reliable and convenient than established products.
==========
If history is any guide, companies that keep disruptive technologies bottled up in their labs, working to improve them until they suit mainstream markets, will not be nearly as successful as firms that find markets that embrace the attributes of disruptive technologies as they initially stand.
==========
The strategic alternatives available to companies facing performance oversupply and the consequent likelihood that disruptive approaches will change the nature of competition in their industry. The first general option, labeled strategy 1 and the one most commonly pursued in the industries explored in this book, is to ascend the trajectory of sustaining technologies into ever-higher tiers of the market, ultimately abandoning lower-tier customers when simpler, more convenient, or less costly disruptive approaches emerge.
==========
Second alternative, labeled strategy 2, is to march in lock-step with the needs of customers in a given tier of the market, catching successive waves of change in the basis of competition. Historically, this appears to have been difficult to do,
==========
The third strategic option for dealing with these dynamics is to use marketing initiatives to steepen the slopes of the market trajectories so that customers demand the performance improvements that the technologists provide. Since a necessary condition for the playing out of these dynamics is that the slope of the technology trajectory be steeper than the market’s trajectory, when the two slopes are parallel, performance oversupply—and the progression from one stage of the product life cycle to the next—does not occur or is at least postponed.
==========
Point one: First step to identify whether a technology is disruptive and can affect existing tech
The first step in making this chart involves defining current mainstream market needs and comparing them with the current capacity of electric vehicles.
==========
To measure market needs, I would watch carefully what customers do, not simply listen to what they say. Watching how customers actually use a product provides much more reliable information than can be gleaned from a verbal interview or a focus group.
==========
Point two - to take note of:
They will only be disruptive if we find that they are also on a trajectory of improvement that might someday make them competitive in parts of the mainstream market.
==========
the technology will progress faster than the pace of improvement demanded in the market, then the threat of disruption is real.
==========
if the technology will progress faster than the pace of improvement demanded in the market, then the threat of disruption is real.
==========
Defining market flor disruptive tech:
First, I would acknowledge that, by definition, electric vehicles cannot initially be used in mainstream applications because they do not satisfy the basic performance requirements of that market.
==========
Point three to take note of:
Government mandates, incidentally, are likely to distort rather than solve the problem of finding a market. I would, therefore, force my organization to live by its wits rather than to rely on capricious subsidies or noneconomic–based California regulation to fuel my business.
==========
another crucial point
The second point on which I would base my marketing approach is that no one can learn from market research what the early market(s) for electric vehicles will be.
Another key point
==========
The third point is that business plan must be a plan for learning, not one for executing a preconceived strategy.
==========
Markets are developed with fine products that customers desire to own. No salesman can take marginal product into the marketplace and have any hope of establishing a sustainable consumer base. Consumers will not be forced into a purchase that they do not want. Mandates will not work in a consumer-driven, free market economy.
==========
Hence disruptive products or technology is not invented but is innovated
Historically, disruptive technologies involve no new technologies; rather, they consist of components built around proven technologies and put together in a novel product architecture that offers the customer a set of attributes never before available.
==========
First, the pace of progress that markets demand or can absorb may be different from the progress offered by technology.
==========
Second, managing innovation mirrors the resource allocation process: Innovation proposals that get the funding and manpower they require may succeed; those given lower priority, whether formally or de facto, will starve for lack of resources and have little chance of success.
==========
Third, just as there is a resource allocation side to every innovation problem, matching the market to the technology is another.
==========
Fourth, the capabilities of most organizations are far more specialized and context-specific than most managers are inclined to believe.
==========
Fifth, in many instances, the information required to make large and decisive investments in the face of disruptive technology simply does not exist.
==========
Sixth, it is not wise to adopt a blanket technology strategy to be always a leader or always a follower.
==========
Seventh, and last, the research summarized in this book suggests that there are powerful barriers to entry and mobility that differ significantly from the types defined and historically focused on by economists.
Zero to One (Peter Thiel)
"they won’t just get better at the kinds of things people already do; they’ll help us to do what was previously unimaginable"
==========
What should a new startup be thinking about when he starts some thing new?
==========
The Engineering Question 1. Can you create breakthrough technology instead of incremental improvements? 2. The Timing Question Is now the right time to start your particular business? 3. The Monopoly Question Are you starting with a big share of a small market? 4. The People Question Do you have the right team? 5. The Distribution Question Do you have a way to not just create but deliver your product? 6. The Durability Question Will your market position be defensible 10 and 20 years into the future? 7. The Secret Question Have you identified a unique opportunity that others don’t see?
==========
"WHENEVER I INTERVIEW someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”
How to Fly a Horse: The Secret History of Creation, Invention, and Discovery (Kevin Ashton)
"We have imagined our creations finished but never begun."
==========
"The courage of creation is making bad beginnings."
==========
"Much of what happens in internal meetings is called “planning,” but planning is of limited value, because nothing ever goes according to plan. "
==========
"The power of population is indefinitely greater than the power in the earth to produce subsistence for man. Population, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio. A slight acquaintance with numbers will show the immensity of the first power in comparison of the second. By that law of our nature which makes food necessary to the life of man, the effects of these two unequal powers must be kept equal. This implies a strong and constantly operating check on population from the difficulty of subsistence. This difficulty must fall some where, and must necessarily be severely felt by a large portion of mankind."
==========
Bold (Peter H. Diamandis)
"Ten years from now, according to research done at the Babson School of Business, more than 40 percent of today’s top companies will no longer exist.15 “By 2020, more than three quarters of the S&P 500 will be companies that we have not heard of yet.”
==========
There are seventeen flow triggers in total—three environmental, three psychological, ten social, and one creative.
==========
If you can’t measure it, you can’t improve
==========
“Even if the probability for success is fairly low, if the objective is really important, it’s still worth doing. Conversely, if the objective is less important, then the probability needs to be much greater. How I decide which projects to take on depends on probability multiplied by the importance of the objective.”
==========
The Industries of the Future (Alec Ross)
The adoption of new technology finally occurs when ease of use, economic savings, and trust all come together to work toward change.
==========
Never Split the Difference: Negotiating as if Your Life Depended on It (Chris Voss;Tahl Raz)
It was an iterative process, not an intellectual one, as we refined the tools we used day after day.
==========
