Disruption beats sustaining innovation as a growth strategy

Christensen distinguishes two kinds of innovation: sustaining innovations make an existing product better along the dimensions its current best customers already value, while disruptive innovations introduce something initially worse on those same dimensions but better on some new dimension, like price, simplicity, or convenience. Companies instinctively pour resources into sustaining innovation because their most profitable customers demand it and because it feels like the safer bet.

The trouble is that sustaining innovation is a battle incumbents almost always win, since it plays directly to their existing strengths, resources, and customer relationships. Disruptive innovation is the opposite: incumbents almost always lose these fights, because the disruptive offering doesn't initially threaten their profitable core and they have every institutional incentive to ignore it until it has matured enough to become dangerous.

The strategic conclusion is blunt: if you want durable new growth, don't try to build a better mousetrap for existing customers. Build a worse one that serves people the existing mousetrap never reached.

Takeaway: measure a new idea by whether it opens an ignored market, not by whether it beats the incumbent's current best product.