Technology Disrupts at Two Different Speeds
Ten years ago I spoke at a Marketing Technology (aka “martech”) event that was held at the fancy New York Times auditorium; a famous Harvard economist was the keynote speaker.
Although his remarks weren’t long, they certainly made an impression on me. I’ve held onto what he said and have tried to find the source material for the points he raised, with no success. It went something like this (please excuse my paraphrasing that is likely not proper Harvard economist-speak):
Imagine you are the greatest country in the world. You can manufacture and deliver any kind or size of object anywhere in the world at a speed and level of quality better than any other. It’s the late 1800s, and you are Great Britain. You’re so confident of your amazingness that you’ve branded yourself as “Great!” And that’s because you have achieved unprecedented scale in industrializing yourself by harnessing steam power in your factories, textiles, and transportation capabilities. This makes other countries cower in the shadow of your awesomeness.
Then, just as you’re headed into the new century, this thing called “electricity” starts to take off. And because you’re so great, you completely wave it off as a bad idea that can never take hold because steam power is here to stay! But this upstart country called the USA doesn’t have the same sunk investment in steam power greatness, and instead adopts electricity to power its factories. And for an extended period in the USA, if you include the word “electric” in your company name, your market valuation is guaranteed to sizzle and grow.
This riveting story of how technology disruptions take a long time — for reasons that aren’t about the superior qualities of the technology, necessarily, but about the critical mass and timing for the technology to finally take hold — stuck to the roof of my brain, instantly, like peanut butter does in your mouth. Because the story that the economist told was slightly different from the then-predominant take in business circles for how technologies take over, i.e. so-called “disruptive innovation” as advanced by the late Harvard Business School guru Clayton Christensen. I learned Christensen’s take…