Do “disruptive technologies” have to be cheaper than the thing they are disrupting? It’s may seem a silly question, but it cuts to the heart of an anomaly in Clay Christensen’s widely-loved theory. After all, Clay argues compellingly that many businesses are caught napping by cheaper, toy-like technologies that rapidly mature and eventually unseat market incumbents.
So, can more expensive technologies be disruptive too? Under the orthodox version of Christensen’s model the answer is seemingly “No”. All of his favored examples, from hard-drives to milkshakes, are of cheaper technologies that increased rapidly in price-performance and quality and eventually won the day.
Consider, by way of counterpoint, the case of overhead projectors. The old-style overhead projector, the sort of thing you used to see in almost any classroom, is $700 or so — and it is rapidly disappearing. It is being replaced, however, by the LCD beam projector, whether portable or ceiling mounted.
But here is the issue. The LCD projector is much more expensive than the 3M-style thing it is replacing. A good LCD projector can easily cost $10,000. It is, nevertheless, rapidly replacing acetate-requiring overheads in many classrooms, and in almost all boardrooms.
So what does it mean? Is the LCD beam projector not disruptive? Would Clay call it instead a sustaining innovation? It would be hard to argue the latter point, given how different such machines are from the old units they are replacing. It seems intead that there is an anomaly at the core of disruptive innovation, one that threatens to disrupt disruption by turning its basic price principle upside-down.