To focus capital and entrepreneurship into empowering innovation, we should change is the capital gains tax rate. We would be better served by a regressive tax rate, that would become progressively smaller the longer the investment is held.
— Clayton M. Christensen
Efficiency innovations arise in industries that already exist. They provide existing goods and services at much lower costs. They are not empowering. Efficiency innovators become the low cost providers within an existing framework.
A great book seeks to explain causality, not correlation. It works to point out the circumstances in which it works, and where it doesn't. And in so doing, it is broadly applicable.
There is no single right answer or path forward, but there is one right way to frame the problem.
If you're successful and growing, you can manage any way you want to. Growth makes so many dimensions of management easier. It's when growth stops that things get tough.
People under-invest in family because it doesn't pay off until the long term.
Many of the factors that we think will cause motivation, such as fair pay and a good manager, won't make you love your job. Even if you eliminate what makes you dissatisfied, that doesn't make you motivated. It doesn't make your work rewarding. You just are less bothered by things.
The mistake that makes launching a venture expensive is when you try to make a disruptive technology so good that it can compete on a quality basis with an established product.
Management is getting people together to figure out how to transform inputs into outputs. In the process of figuring out the process of how people work together, you've got to figure out who's got what responsibilities, and how do they work together.
People in private equity complain that they have so much capital and so few places to invest. But you have lots of entrepreneurs trying to raise money at the low end and find that they can't get funding because of this mismatch. I think that there is an opportunity there.
If you understand cause and effect, it brings about a set of insights that leads you to a very different place. The knowledge will persuade you that the market isn't organized by customer category or by product category. If you understand the job that consumers need to complete, you can articulate all of the experiences in that job.
The iPod is a proprietary integrated product, although that is becoming quite modular. You can download your music from Amazon as easily as you can from iTunes. You also see modularity organized around the Android operating system that is growing much faster than the iPhone. So I worry that modularity will do its work on Apple.
I'm an optimistic person.
Universities think people come up with great ideas by closing the door. The academic tenure process, where you have to publish to journals which are very narrow, stands in the way of great research.
Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and consequently, the world is awash in capital, but the innovations we need to advance aren't there.
Every city and town in America would be bankrupt if they kept their books the way private-sector companies keep their books - because of the obligation cities and towns have taken upon themselves to provide health care for their retirees.
There are direct paths to a successful career. But there are plenty of indirect paths, too.
Efficiency innovations provide return on investment in 12-18 months. Empowering innovations take 5-10 years to yield a return. We have ample capital - oceans of capital - that is being reinvested into efficiency innovation.
A sustaining innovation makes better products that you can sell for better profits to your best customers.
The process of writing 'The Innovator's Dilemma' entailed the developing a new theory. My colleagues, students and I have been improving that theory, and adding others to it, since that time.
There just isn't anything more invigorating than to read an article or hear about an entrepreneur using the term 'disruptive technology' that makes no reference to me as the source. When it's clear they really got the idea and they use it as if it were in everyday parlance, that's the ultimate triumph.
Eighty percent of the cases used in the typical MBA program are about successful companies. Students graduate with this notion that 'If I do everything that the people in those cases did, then my organization will grow and be successful, too.'
The way I ought to measure my life is in terms of the others I helped to become better and happier people. That's the biggest thing to think about if you're not happy.
In organizations, once you articulate how success will be measured, everybody tries to game the system so that they are measured in the best possible way.
I don't feel that this concept of disruptive technology is the solution for everybody. But I think it's very important for innovators to understand what we've learned about established companies' motivation to target obvious profitable markets - and about their inability to find emerging ones. The evidence is just overwhelming.
People don't actually want to think about their own health and don't take action until they are sick. Yet employers are very motivated to get their employees healthy, since they bear most of the burden of their health care costs.
Venture capital is always wanting to go up market.
We all have jobs in our lives that we must get done. We reach out and bring products into our lives to get these jobs done. Marketing is all about asking, 'What job is the customer trying to accomplish?'
I talk to our kids now that they are grown up, and I ask them about the experiences that had growing up that really had a powerful influence on the way they view the purpose of life. The experiences that really shaped their values - my wife and I have no memory of those experiences!
Diabetes is a great example whereby, giving the patient the tools, you can manage yourself very well.
For online universities, like Liverpool and the University of Phoenix, if prices drop by 60%, they still make money. But for the vast majority of traditional universities, if the prices fall by 10%, they are bankrupt; they have no wriggle room.
The only way all people can have the opportunity to choose or reject the gospel of Jesus Christ is for us, without judgment, to invite them to follow the Savior.
The breakthrough innovations come when the tension is greatest and the resources are most limited. That's when people are actually a lot more open to rethinking the fundamental way they do business.
I wouldn't say there isn't a direct path to a successful career. There are people who knew exactly what they wanted to do from a very young age, weren't going to be diverted, and then they just went out and achieved it.
Efficiency innovations are a natural part of the economic cycle, but these are the innovations that streamline process and actually reduce the number of available jobs.
Empowering innovations transform something that is complicated and expensive into something that is so much more simple and affordable that a much larger population can enjoy it.
During the early stages of an industry, when the functionality and reliability of a product isn't yet adequate to meet customer's needs, a proprietary solution is almost always the right solution - because it allows you to knit all the pieces together in an optimized way.
Managers are already voracious consumers of theory. Every time they make a decision or take action, it's based on some theory that leads them to believe that action will lead to the right result. The problem is, most managers aren't aware of the theories they're using, and they often use the wrong theories for the situation.
People have an idol they want to be like and try to follow what the idols did. But when you do, you find out you're not very successful and you're not very happy. You try to copy these models, and it doesn't yield successful results.
We need to have a better balance between a deliberate strategy and staying open. Because in the end, most of us end up being successful in a career that we never imagined we would be in at the beginning.
In an environment where you've got to push innovations out the door fast and keep the cost of innovation low, the probability that you'll be successful is actually much higher.
I promise my students that if they take the time to figure out their life purpose, they'll look back on it as the most important thing they discovered while at school. If they don't figure it out, they will just sail off without a rudder and get buffeted in the very rough seas of life.
While I wouldn't say that most entrepreneurs find it easy to get funding, there are certainly more people out there funding technology and healthcare companies than in other areas.
The parents of teenagers would love to have a car that won't go very far or go very fast. They could just cruise around the neighborhood, drive it to school, see their friends, plug it in overnight.
The basic idea that marketing is wrong at its core is one of the main reasons why innovation seems blocked and unpredictable.
Children are ready to learn when they are ready to learn, not necessarily when their parents are ready to teach them.
I got Type 1 diabetes at 30. It hit me in 1982 when I was a White House Fellow in Washington. I had viral pneumonia. I lost 35 pounds in six weeks. And I couldn't see anything. Everything was blurry. I was always thirsty.
Management is the opportunity to help people become better people. Practiced that way, it's a magnificent profession.
The ability to share the gospel isn't a 'gift' that has been given to only a few Latter-day Saints and denied to the rest.
One of the banes of successful innovation is that companies may be so committed to innovation that they will give the innovators a lot of money to spend.
