The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail

In The Innovator’s Dilemma, Clayton Christensen argues that firms often fail by focusing too much on what they do well and failing to embrace disruptive innovations that ultimately overtake their current business model. The problem is: how do companies spot potentially disruptive innovations early enough, and know which disruptions to take seriously as potential threats (without distracting the firm's time and attention)? This is the kind of theory that sounds great on paper but is generally impractical in real life. Nonetheless, Christensen's general point that innovators themselves will get disrupted is essential and true, and something that all firms (and especially investors in such firms) should remember.