![]() In other words, disruptive competition kills profitability. Disrupting existing markets with a better, faster, easier or cheaper product increases competition and has a rationalising effect on a market – reducing the ability to extract value. Zero to One also argues that ‘disruptive innovation’ is bad innovation because it is rarely profitable. In practice, what all this means is that every innovation project should be begin with the question “how can we build a monopoly” – a question upon which PayPal and Google were built. Together, extracting (sustainable) value and delivering value make up the double helix DNA of great innovation. Protecting yourself from future competition so you can continue to extract value, as well as deliver value is key to great innovation. But great innovation does something more – it also maximises profitability by preventing competitors from entering the fray – through a mix of unique understanding, proprietary technology, network effects, economies of scales and compelling branding. Good innovation focuses on delivering value by solving peoples’ problems better, faster, cheaper or more easily. ![]() That’s the central tenet of this season’s bestselling must-read blockbuster on innovation, Zero to One, from PayPal creator and innovation investor Peter Thiel (#4 on Forbes Midas List of 2014 worth $2.2 billion). Real innovation should be about creating monopolies. ![]()
0 Comments
Leave a Reply. |