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Google Techs, Entrepreneurs Match Wits
By MICHAEL LIEDTKE, AP Business Writer Sat Aug 20, 5:37 PM ET
MOUNTAIN VIEW, Calif. - Free-flowing beer, live music, karaoke and arcade games kept the party raging at the Googleplex the other night, but the real action was unfolding inside a sterile conference room at Google Inc.'s headquarters.
That's where the cunning Internet entrepreneurs who constantly try to manipulate Google's search engine results for a competitive edge were trying to make the most of a rare opportunity to match wits face-to-face with the company's top engineers.
Google's code-talking experts, despite putting on a show of being helpful, weren't about to reveal their "secret sauce" — Google's tightly guarded formula for ranking Web sites.
But that didn't zap the energy from the "Google Dance" — an annual summer party that's become a metaphor for the behind-the-scenes twists and turns that can cause Web sites to rise and fall in Google's search results.
For the millions of Web sites without a well-known domain name, those rankings can mean the difference between success or failure because Google's search engine drives so much of the Internet's traffic.
"Being on the first page of Google's results is like gold," said Web site consultant Gordon Liametz, one of the roughly 2,000 guests at this year's party, held earlier this month at Google's colorful corporate campus.
The Web site administrators, known as webmasters, and their consultants paid particularly close attention to Google engineer Matt Cutts, the company's main liaison with the webmaster community and this party's star attraction.
"That's the Mick Jagger of search!" exclaimed e-marketing strategist Seth Wilde as he strolled by Cutts and his audience of webmasters.
Cutts, who has worked at Google for five years, sees it differently.
"I feel more like the Rick Moranis of search because I end up dealing with so many quirky and weird cases," he said.
With so much at stake, low-ranked Web sites spend much time and money trying to elevate their standing, even if they must resort to deception.
The tactics include "keyword stuffing" — peppering a Web page with phrases associated with a specific topic such as "laptop computers" in hopes of duping the software "spiders" that troll the Internet to feed Google's growing search index.
It's a risky strategy because Google and other search engines penalize Web sites that get caught gratuitously repeating the same word. In the worst cases, the offending Web sites are deleted from the index so they don't show up in search results at all.
Sometimes webmasters collude to populate their sites with a large number of incoming links from other sites. This approach makes a site appear more authoritative and popular than it really is and thus rise in rankings.
Such dirty tricks pollute the search results with Web sites that have little to do with a user's request, frustrating consumers, diminishing Google's credibility and threatening to undermine the company's profits by driving users to its rivals.
Not surprisingly, Google works hard to thwart the mischief makers, sometimes branded as "Black Hats" because of their subterfuge.
Engineers frequently tweak the algorithms that determine the rankings, sometimes causing Web sites perched at the top to fall a few notches or, worse, even plunge to the back pages of the results.
Google's reshuffling raised so many anxieties that webmasters in 2002 began to name the changes after hurricanes and infamous events. One particularly unpopular change Google rolled out in 2003 was dubbed "Florida" after the muddled ballot count in the 2000 presidential election.
Hoping to ease the tensions with webmasters, Google hatched the idea of its "dance" party during an annual search engine convention held in Silicon Valley, just a few miles from Google's headquarters. The company invited some of the Black Hats, effectively welcoming the foxes into the hen house.
"Google realized it was never going to get rid of these (Black Hats), so it decided it may as well work with them," Chris Winfield, a Google Dance party veteran who runs 10e20, a search engine marketing firm. "Until then, it always seemed like it was 'us against them.'"
Wilde, who works for Denver-based Web consultant Viewmark Inc., puts it more bluntly: "Google is smart. You always try to keep your enemies close to you."
The guests have mostly behaved themselves, although a couple years ago there was an unsuccessful attempt to steal one of Google's couches.
"We bring in extra security — just in case," Cutts said.
The efforts to outsmart Google gall some webmasters such as Shari Thurow, who believes the best way to increase a site's search engine ranking is to offer valuable content and products. She describes the Black Hats as "pathetic algoholics" because they are so obsessed with trying to figure out Google's algorithms.
"A lot of these people just don't know how to build user-friendly sites," said Thurow, a Google Dance attendee who runs Carpentersville, Ill.-based Grantastic Designs Inc. "If you build a site for human beings, your site naturally gets search engine traffic."
There's also a more direct way to the top of the Google's rankings: Just pay the search engine for the right to have a Web site linked to specific keywords entered into the request box. For instance, a Manhattan hotel might pay top dollar for the words "travel New York" to ensure its site is displayed in the "sponsored links" section on top and to the right of Google's regular results.
But ads can get expensive, and many Web surfers simply refuse to click on them, so being on top of the regular results is key, said Richard Hagerty, chief executive of Impaqt, a Bridgeville, Pa., search engine consultant who wasn't at the party.
Google knows it can't entirely avoid Black Hats.
"There are people who make their entire living off of Google, which is fine, as long as they don't push things too far," said Peter Norvig, Google's director of search quality
But he said webmasters searching for secrets are better off looking elsewhere.
"Everything you ever wanted to know about Google is right there on the (online) forums that the webmasters run," Norvig said. "There is a lot of truth in there, but there's also a lot of crazy stuff. We just don't tell them which is which."
___
On The Net:
http://www.google.com/googledance2005/
http://googleblog.blogspot.com/
By MICHAEL LIEDTKE, AP Business Writer Sat Aug 20, 5:37 PM ET
MOUNTAIN VIEW, Calif. - Free-flowing beer, live music, karaoke and arcade games kept the party raging at the Googleplex the other night, but the real action was unfolding inside a sterile conference room at Google Inc.'s headquarters.
That's where the cunning Internet entrepreneurs who constantly try to manipulate Google's search engine results for a competitive edge were trying to make the most of a rare opportunity to match wits face-to-face with the company's top engineers.
Google's code-talking experts, despite putting on a show of being helpful, weren't about to reveal their "secret sauce" — Google's tightly guarded formula for ranking Web sites.
But that didn't zap the energy from the "Google Dance" — an annual summer party that's become a metaphor for the behind-the-scenes twists and turns that can cause Web sites to rise and fall in Google's search results.
For the millions of Web sites without a well-known domain name, those rankings can mean the difference between success or failure because Google's search engine drives so much of the Internet's traffic.
"Being on the first page of Google's results is like gold," said Web site consultant Gordon Liametz, one of the roughly 2,000 guests at this year's party, held earlier this month at Google's colorful corporate campus.
The Web site administrators, known as webmasters, and their consultants paid particularly close attention to Google engineer Matt Cutts, the company's main liaison with the webmaster community and this party's star attraction.
"That's the Mick Jagger of search!" exclaimed e-marketing strategist Seth Wilde as he strolled by Cutts and his audience of webmasters.
Cutts, who has worked at Google for five years, sees it differently.
"I feel more like the Rick Moranis of search because I end up dealing with so many quirky and weird cases," he said.
With so much at stake, low-ranked Web sites spend much time and money trying to elevate their standing, even if they must resort to deception.
The tactics include "keyword stuffing" — peppering a Web page with phrases associated with a specific topic such as "laptop computers" in hopes of duping the software "spiders" that troll the Internet to feed Google's growing search index.
It's a risky strategy because Google and other search engines penalize Web sites that get caught gratuitously repeating the same word. In the worst cases, the offending Web sites are deleted from the index so they don't show up in search results at all.
Sometimes webmasters collude to populate their sites with a large number of incoming links from other sites. This approach makes a site appear more authoritative and popular than it really is and thus rise in rankings.
Such dirty tricks pollute the search results with Web sites that have little to do with a user's request, frustrating consumers, diminishing Google's credibility and threatening to undermine the company's profits by driving users to its rivals.
Not surprisingly, Google works hard to thwart the mischief makers, sometimes branded as "Black Hats" because of their subterfuge.
Engineers frequently tweak the algorithms that determine the rankings, sometimes causing Web sites perched at the top to fall a few notches or, worse, even plunge to the back pages of the results.
Google's reshuffling raised so many anxieties that webmasters in 2002 began to name the changes after hurricanes and infamous events. One particularly unpopular change Google rolled out in 2003 was dubbed "Florida" after the muddled ballot count in the 2000 presidential election.
Hoping to ease the tensions with webmasters, Google hatched the idea of its "dance" party during an annual search engine convention held in Silicon Valley, just a few miles from Google's headquarters. The company invited some of the Black Hats, effectively welcoming the foxes into the hen house.
"Google realized it was never going to get rid of these (Black Hats), so it decided it may as well work with them," Chris Winfield, a Google Dance party veteran who runs 10e20, a search engine marketing firm. "Until then, it always seemed like it was 'us against them.'"
Wilde, who works for Denver-based Web consultant Viewmark Inc., puts it more bluntly: "Google is smart. You always try to keep your enemies close to you."
The guests have mostly behaved themselves, although a couple years ago there was an unsuccessful attempt to steal one of Google's couches.
"We bring in extra security — just in case," Cutts said.
The efforts to outsmart Google gall some webmasters such as Shari Thurow, who believes the best way to increase a site's search engine ranking is to offer valuable content and products. She describes the Black Hats as "pathetic algoholics" because they are so obsessed with trying to figure out Google's algorithms.
"A lot of these people just don't know how to build user-friendly sites," said Thurow, a Google Dance attendee who runs Carpentersville, Ill.-based Grantastic Designs Inc. "If you build a site for human beings, your site naturally gets search engine traffic."
There's also a more direct way to the top of the Google's rankings: Just pay the search engine for the right to have a Web site linked to specific keywords entered into the request box. For instance, a Manhattan hotel might pay top dollar for the words "travel New York" to ensure its site is displayed in the "sponsored links" section on top and to the right of Google's regular results.
But ads can get expensive, and many Web surfers simply refuse to click on them, so being on top of the regular results is key, said Richard Hagerty, chief executive of Impaqt, a Bridgeville, Pa., search engine consultant who wasn't at the party.
Google knows it can't entirely avoid Black Hats.
"There are people who make their entire living off of Google, which is fine, as long as they don't push things too far," said Peter Norvig, Google's director of search quality
But he said webmasters searching for secrets are better off looking elsewhere.
"Everything you ever wanted to know about Google is right there on the (online) forums that the webmasters run," Norvig said. "There is a lot of truth in there, but there's also a lot of crazy stuff. We just don't tell them which is which."
___
On The Net:
http://www.google.com/googledance2005/
http://googleblog.blogspot.com/
POSTED BY TQMC AT 8:52 PM 2 COMMENTS 
MONDAY, AUGUST 01, 2005
The Innovator's Dilemma,
Editorial Reviews
Amazon.comWhat do the Honda Supercub, Intel's 8088 processor, and hydraulic excavators have in common? They are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator's Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies.
At the heart of The Innovator's Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written, The Innovator's Dilemma is an important book that belongs on every manager's bookshelf. Highly recommended. --Harry C. Edwards From AudioFileWhen new technologies become available, how do established companies take advantage of these innovations without disrupting existing relationships with customers and stockholders? The managerial formula that solves this dilemma is far from simple, but this abridgment of the author's 1997 book will be easily understood by anyone interested in technological revolutions. The clarity of these broad-brush ideas is just plain fascinating. The reader's gravity and dramatic precision will be distracting for many people, but only for the first few minutes. After that, the big ideas in this program take over and captivate the listener's attention. T.W. © AudioFile 2001, Portland, Maine-- Copyright © AudioFile, Portland, Maine--This text refers to the Audio Cassette edition. See all Editorial Reviews
Product Details
Hardcover: 225 pages
Publisher: Harvard Business School Press (June 1, 1997)
Language: English
ISBN: 0875845851
Product Dimensions: 9.6 x 6.4 x 1.1 inches
Shipping Weight: 1.3 pounds. (View shipping rates and policies)
Average Customer Review: based on 131 reviews. (Write a review)
Amazon.com Sales Rank: #17,354 in Books
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Other Editions: Paperback Audio Cassette (Abridged) Audio CD(Abridged) e-book (Adobe Reader) e-book (Microsoft Reader) All Editions
Inside This Book
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Citations: This book cites 14 books 100 books that cite this book
Browse Sample Pages: Front Cover Copyright Table of ContentsExcerpt Index Back Cover
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First Sentence:When I began my search for an answer to the puzzle of why the best firms can fail, a friend offered some sage advice.Read the first page
Statistically Improbable Phrases (SIPs): (learn more) performance oversupply, commercializing disruptive technologies, desktop personal computer market, different value networks, markets for disruptive technologies, market for electric vehicles, disruptive technology change, disruptive products, entrant firms, disk drive companies, technologically straightforward, higher performance products, disk drive makers, integrated steel makers, new component technologies, trajectory map, small emerging markets,sustaining impact, minicomputer market, disruptive innovations,flash chips, excavation contractors, general excavation, price per megabyte, desktop market
Capitalized Phrases (CAPs): (learn more) Trend Report, Harvard Business School, Year Source, North American, Control Data, Match the Size, Can't Go Down, Conner Peripherals, Bucyrus Erie, Harvard Business Review, Research Policy, Digital Equipment, Seagate Technology, Eli Lilly, Administrative Science Quarterly, Western Digital, Allen Bradley, Business History Review, Data General, Joseph Bower, Robert Burgelman, Size of the Market, Summit Books,Technological Discontinuities, The Free Press
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Citations (learn more)
This book cites 14 books:
New and Improved by Richard S. Tedlow on page 59, and page 119
Crossing the Chasm by Geoffrey A. Moore on page 190, and page 201
Inside Corporate Innovation by Robert A. Burgelman on page 28, andpage 58
The Core Competence of the Corporation by C. K. Prahalad on page 181 See all 14 books this book cites
100 books that cite this book:
Managing Innovation: Integrating Technological, Market, and Organizational Change, 2nd Edition by Joe Tidd on 5 pages
Managing Strategic Innovation and Change: A Collection of Readingsby Michael Tushman on page 14, page 31, and page 479
Managing Strategic Innovation and Change: A Collection of Readingsby Michael L. Tushman on page 14, page 31, and page 479
Blockbusters : The Five Keys to Developing GREAT New Products by Gary S. Lynn on page 230, page 234, and page 235 See all 100 books citing this book
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100 of 104 people found the following review helpful:Identifying the horns of the dilemma., January 30, 2000
Reviewer:
Dave Kinnear "the Rational Taoist" (Dana Point, CA USA) - See all my reviews Prior to reading this book, I chalked up the misfortunes of the well run companies of our time to the vagaries of the market place and put them in the same shoulder shrugging category of "bad things happen to good people." But now I have a new way of looking at success and failure due to disruptive technology. I better understand my own frustrations of trying to do new things in a large corporation given the further insight from Christensen that assets are really managed by customers, not our own managers. That is what makes this book scary. There seems little hope of any large corporation staying on top of disruptive technology unless they follow the prescription of segregating those innovations from the usual corporate overhead structure. That means spinning off groups, taking equity positions in start-up firms, and/or completely funding start-ups to grow the new markets. The writing is clear, the data gathered is thorough and fully documented with ample notes, the logic is concise, and the conclusions are entirely logical. Christensen gives us formulas for success including agnostic marketing to help us recognize emerging markets. The case studies are at once interesting and compelling. This is a must read for managers in any industry. Dr. Andrew S. Grove, Chairman and CEO of Intel Corporation had this to say, "This book addresses a tough problem that most successful companies will face eventually. It's lucid, analytical-and scary."Was this review helpful to you?
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81 of 87 people found the following review helpful:A new paradigm, August 11, 1998
Reviewer:
Duwayne Anderson (Saint Helens, Oregon) - See all my reviews We have all seen large, powerful, and successful corporations upstaged and driven out of business by startups using new ideas to grow exponentially and dominate the new business landscape. In his book "The Innovator's Dilemma," Clayton M. Christensen provides a unique and novel theory that explains why entrenched corporations often fail to capitalize on such new ideas, and fall prey to firms with fewer initial resources. With enough data and case histories to make even the skeptic sit up and take notice, Christensen sculpts an argument that demands our attention at once. Step by step he shows that such extinctions come about not necessarily because of arrogance and dogmatism (though these play their parts) but because of the architectural and organizational structures that make good companies good. Like Einstein's theory of relativity, with its concepts of relative time and space, some of Christensen's conclusions seem unintuitive. Others even seem contrary to phy! sical reality. Sometimes it really is wrong to listen to your customers. Sometimes it is better to build a product with low margin and a limited market rather than build a product with high margin and large, virtually guaranteed market.
Christensen builds his thesis upon the notion that technology comes in two broad flavors: sustaining and disruptive. Established product lines use sustaining technology to make incremental improvements. In the language of biology, sustaining technology facilitates gradual Darwinian evolution where incremental improvements coupled with survival of the fittest lead to gradual product improvement. For example, tire manufacturers use sustaining technology to enhance the tread, sidewall, and belt design of automotive tires. Sustaining technology is not trivial, and often involves tremendous expenditures of capital. It is, however, what established companies do best, and these companies have developed very effective organizational and manag! erial structures for dealing with it.
Disruptive technol! ogy, on the other hand, approaches product evolution outside the sustaining envelope. Disruptive technologies typically offer a cheaper solution to a small, often unidentified subgroup. Once established within this small market the disruptive technology evolves through sustaining technology until it eventually satisfies the performance criteria of more traditional markets. When this happens, the disruptive technology bursts onto the scene, attacking the soft underbelly of the established corporations, often with fatalistic consequences. In the parlance of evolutionary biology, disruptive technology is like punctuated evolution; fast with significant changes in the gene pool.
Christensen may be excused for lacking the breadth to discuss similarities between such diverse fields as biology and business management. Still, the book would have benefited immeasurably by a co-author in the field who might have offered greater insight into universal principles governing the evol! ution of complex systems. Repeatedly I found myself going to books by authors such as Richard Dawkins and Stephen Jay Gould to refine my mental image of the multidimensional landscape in which biological organisms and industrial businesses compete for the resources of survival.
The book is well written and persuasive in its arguments. It questions many established ideas and shows that often these ideas fail to apply to disruptive technologies. Often the best corporations are especially susceptible. Defense against disruptive technologies does not come from being smarter and working closer with customers. Paradoxically, working closely with customers and following established rules for corporate investment often make a company more susceptible to harm from disruptive technologies. Companies naturally evolve toward higher-end products with greater margins. Consequently, they find it difficult to enter markets with disruptive technologies that often begin with low margi! ns, are technologically simple, and do not have a clearly d! efined customer base. Such markets are ideal for start-up firms. The author suggests, with several case histories, that one of the best ways for established firms to deal with disruptive technologies is to spin off autonomous organizations that exist within the economic constraints of disruptive technologies.
The author does an excellent job of using examples, drawing most from the disk-drive industry. He also includes examples from the computer, motorcycle, steel, automotive, and earth-moving industries as well. In each case he explains how disruptive technologies emerged and often destroyed well-run companies that were following all the established rules. This drives home the fact that disruptive technologies pose such a great risk precisely because they can destroy industries not only in spite, but because they follow established business practices.
After describing disruptive technologies, with historical cases to illustrate points, the author ends with a case st! udy involving electric vehicles. I found this chapter to be among the weakest, and something of a distraction from the more substantial earlier material. Ironically, in the process of trying to frame electric vehicles as disruptive technology, the author seems to have missed one of the best examples of a disruptive technology, and one that nearly destroyed America's foremost industries: small cars.
Overall, Christensen's work is on a high academic level, though some of the technical material is inconsistent. For example, the ordinates in figures 1.4, 1.5, and 6.1 disagree with each other. The text on page 128 also disagrees with figure 6.1, while the text on page 150 disagrees with figure 7.1. These may be simple examples of typographical errors, but they lessen confidence in the book's technical accuracy. On the positive side, the book has excellent organization and lots of pertinent examples, as well as extensive notes and documentation. The index is also very co! mplete and thorough.
Though Christensen's ideas are new! and radical they are so lucid, logical, and clear that anyone involved in American business cannot afford to ignore them.
Duwayne AndersonWas this review helpful to you?
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1 of 1 people found the following review helpful:A Must-Read!, July 6, 2005
Reviewer:
Rolf Dobelli (Luzern Switzerland) - See all my reviews Professor Clayton M. Christensen's excellent book is a classic of strategy literature. The innovator's dilemma is that doing the right things can lead to failure. Sometimes it is wrong to listen to customers, invest in the highest return opportunities and do all of the things that made a successful company succeed. Clearly written, amply documented, provocative and challenging, this book is indispensable for anyone in business. If it has a shortcoming, it is that it focuses more on the dilemma than on resolving it and it does not offer specific remedial prescriptions. However, Christensen has authored or co-authored two other books that attempt to remedy that deficiency. We heartily recommend this book, which remains the leader of the three. It has the potential to change the way managers think about business - any business.Was this review helpful to you?
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Entrepreneurs - read this & gain the upper hand, May 5, 2005
Reviewer:
Michael Davis "www.byvation.com" (Arlington, TX) - See all my reviews In this revolutionary bestseller, Harvard professor Clayton M. Christensen says outstanding companies can do everything right and still lose their market leadership, or worse, disappear completely. And he not only proves what he says; he tells others how to avoid a similar fate. To be a successful entrepreneur you must be able to capitalize on change. "The Innovator's Dilemma" is all about dealing with change, from the incumbent's point of view. How valuable do you think it would be to understand how your larger competitors think? That's exactly what this book talks about. Most large, established firms are inherently weak in one area - they cling to the status quo with a vengeance. While talk of innovation is commonplace, it is the attacker (entrepreneurs) who holds a definitive advantage. Without legacy systems and overbearing bureaucracy it is the entrepreneur who has the upper hand. "The Innovator's Dilemma" consists of two major parts: Part One: Why Great Companies Fail Part Two: Managing Disruptive Change This is one of the most insightful books on business that I have ever read. It explains a very important concept - how radically new (disruptive) technologies can overtake existing well-established (sustaining) technologies and in the process beat market leaders at their own game. Large companies typically ignore small markets and instead look for growth in established markets. All too often executives of large companies are reluctant to take on challenges in small and unknown terrain since they are always trained to "think big" - which is good news for Aspiring Entrepreneurs. Take heed, read this book and learn how to fully exploit disruptive technologies and become the next "great company." ----------------- Michael Davis - Editor, ByvationWas this review helpful to you?
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1 of 1 people found the following review helpful:Fresh and insightful analysis, March 18, 2005
Reviewer:
Hatem (Los Angeles, CA, USA) - See all my reviewsA great book with some very insightful ideas. Prior to reading this book, the term "disruptive technology" was foreign to me. I always thought that the large company's misfortunes were largely an indication of how short-sided or greedy their management have become. The more I read, the faster my previous assumptions disappear. We have had many companies come out of no-where and become a technological sensation over night, with products that are destined to become main stream. I never viewed those innovations as disruptive technologies but rather as fresh approaches to the same problems that have existed for sometime, which may seem sound to some, but to others who were focused on that core of business, they will see how some new innovations may spell the death-sentence for some companies as well as retire the current de facto products that are in that void. Christensen also discusses how companies can survive disruptive technology attacks and benefit from them to maintain their active participation as well as leadership in their respective industry. Foresight and the courage to invest in those disruptive technologies is key to keep the core business balanced as well as staying in touch with the new competitors.Was this review helpful to you?
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4 of 4 people found the following review helpful:Only the Paranoid Survive, October 5, 2004
Reviewer:
Book eater "Dan" (NYC) - See all my reviewsIn a landmark study, the author argues that the basis of competition among businesses undergoes a paradigm shift everytime a disruptive technology is born. So what is a disruptive technology? Remember what Walmart did to Sears? Of course you do, because disruptive technologies are usually products or services that are faster, cheaper, smaller, and more convinient. Ultimately, good companies must refrain from doing what got them to the top in the first place--listening to their customers and believing everything comes down to superior technology--in order to successfully compete with the onslaught of start-ups redefining both the buying hierarchies and value networks in which they are implicated. This is without a doubt one of the best business books I have ever read.Was this review helpful to you?
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Amazon.comWhat do the Honda Supercub, Intel's 8088 processor, and hydraulic excavators have in common? They are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator's Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies.
At the heart of The Innovator's Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written, The Innovator's Dilemma is an important book that belongs on every manager's bookshelf. Highly recommended. --Harry C. Edwards From AudioFileWhen new technologies become available, how do established companies take advantage of these innovations without disrupting existing relationships with customers and stockholders? The managerial formula that solves this dilemma is far from simple, but this abridgment of the author's 1997 book will be easily understood by anyone interested in technological revolutions. The clarity of these broad-brush ideas is just plain fascinating. The reader's gravity and dramatic precision will be distracting for many people, but only for the first few minutes. After that, the big ideas in this program take over and captivate the listener's attention. T.W. © AudioFile 2001, Portland, Maine-- Copyright © AudioFile, Portland, Maine--This text refers to the Audio Cassette edition. See all Editorial Reviews
Product Details
Hardcover: 225 pages
Publisher: Harvard Business School Press (June 1, 1997)
Language: English
ISBN: 0875845851
Product Dimensions: 9.6 x 6.4 x 1.1 inches
Shipping Weight: 1.3 pounds. (View shipping rates and policies)
Average Customer Review: based on 131 reviews. (Write a review)
Amazon.com Sales Rank: #17,354 in Books
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Other Editions: Paperback Audio Cassette (Abridged) Audio CD(Abridged) e-book (Adobe Reader) e-book (Microsoft Reader) All Editions
Inside This Book
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Citations: This book cites 14 books 100 books that cite this book
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First Sentence:When I began my search for an answer to the puzzle of why the best firms can fail, a friend offered some sage advice.Read the first page
Statistically Improbable Phrases (SIPs): (learn more) performance oversupply, commercializing disruptive technologies, desktop personal computer market, different value networks, markets for disruptive technologies, market for electric vehicles, disruptive technology change, disruptive products, entrant firms, disk drive companies, technologically straightforward, higher performance products, disk drive makers, integrated steel makers, new component technologies, trajectory map, small emerging markets,sustaining impact, minicomputer market, disruptive innovations,flash chips, excavation contractors, general excavation, price per megabyte, desktop market
Capitalized Phrases (CAPs): (learn more) Trend Report, Harvard Business School, Year Source, North American, Control Data, Match the Size, Can't Go Down, Conner Peripherals, Bucyrus Erie, Harvard Business Review, Research Policy, Digital Equipment, Seagate Technology, Eli Lilly, Administrative Science Quarterly, Western Digital, Allen Bradley, Business History Review, Data General, Joseph Bower, Robert Burgelman, Size of the Market, Summit Books,Technological Discontinuities, The Free Press
New! Books on Related Topics Concordance Text Stats
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Citations (learn more)
This book cites 14 books:
New and Improved by Richard S. Tedlow on page 59, and page 119
Crossing the Chasm by Geoffrey A. Moore on page 190, and page 201
Inside Corporate Innovation by Robert A. Burgelman on page 28, andpage 58
The Core Competence of the Corporation by C. K. Prahalad on page 181 See all 14 books this book cites
100 books that cite this book:
Managing Innovation: Integrating Technological, Market, and Organizational Change, 2nd Edition by Joe Tidd on 5 pages
Managing Strategic Innovation and Change: A Collection of Readingsby Michael Tushman on page 14, page 31, and page 479
Managing Strategic Innovation and Change: A Collection of Readingsby Michael L. Tushman on page 14, page 31, and page 479
Blockbusters : The Five Keys to Developing GREAT New Products by Gary S. Lynn on page 230, page 234, and page 235 See all 100 books citing this book
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100 of 104 people found the following review helpful:Identifying the horns of the dilemma., January 30, 2000
Reviewer:
Dave Kinnear "the Rational Taoist" (Dana Point, CA USA) - See all my reviews Prior to reading this book, I chalked up the misfortunes of the well run companies of our time to the vagaries of the market place and put them in the same shoulder shrugging category of "bad things happen to good people." But now I have a new way of looking at success and failure due to disruptive technology. I better understand my own frustrations of trying to do new things in a large corporation given the further insight from Christensen that assets are really managed by customers, not our own managers. That is what makes this book scary. There seems little hope of any large corporation staying on top of disruptive technology unless they follow the prescription of segregating those innovations from the usual corporate overhead structure. That means spinning off groups, taking equity positions in start-up firms, and/or completely funding start-ups to grow the new markets. The writing is clear, the data gathered is thorough and fully documented with ample notes, the logic is concise, and the conclusions are entirely logical. Christensen gives us formulas for success including agnostic marketing to help us recognize emerging markets. The case studies are at once interesting and compelling. This is a must read for managers in any industry. Dr. Andrew S. Grove, Chairman and CEO of Intel Corporation had this to say, "This book addresses a tough problem that most successful companies will face eventually. It's lucid, analytical-and scary."Was this review helpful to you?
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81 of 87 people found the following review helpful:A new paradigm, August 11, 1998
Reviewer:
Duwayne Anderson (Saint Helens, Oregon) - See all my reviews We have all seen large, powerful, and successful corporations upstaged and driven out of business by startups using new ideas to grow exponentially and dominate the new business landscape. In his book "The Innovator's Dilemma," Clayton M. Christensen provides a unique and novel theory that explains why entrenched corporations often fail to capitalize on such new ideas, and fall prey to firms with fewer initial resources. With enough data and case histories to make even the skeptic sit up and take notice, Christensen sculpts an argument that demands our attention at once. Step by step he shows that such extinctions come about not necessarily because of arrogance and dogmatism (though these play their parts) but because of the architectural and organizational structures that make good companies good. Like Einstein's theory of relativity, with its concepts of relative time and space, some of Christensen's conclusions seem unintuitive. Others even seem contrary to phy! sical reality. Sometimes it really is wrong to listen to your customers. Sometimes it is better to build a product with low margin and a limited market rather than build a product with high margin and large, virtually guaranteed market.
Christensen builds his thesis upon the notion that technology comes in two broad flavors: sustaining and disruptive. Established product lines use sustaining technology to make incremental improvements. In the language of biology, sustaining technology facilitates gradual Darwinian evolution where incremental improvements coupled with survival of the fittest lead to gradual product improvement. For example, tire manufacturers use sustaining technology to enhance the tread, sidewall, and belt design of automotive tires. Sustaining technology is not trivial, and often involves tremendous expenditures of capital. It is, however, what established companies do best, and these companies have developed very effective organizational and manag! erial structures for dealing with it.
Disruptive technol! ogy, on the other hand, approaches product evolution outside the sustaining envelope. Disruptive technologies typically offer a cheaper solution to a small, often unidentified subgroup. Once established within this small market the disruptive technology evolves through sustaining technology until it eventually satisfies the performance criteria of more traditional markets. When this happens, the disruptive technology bursts onto the scene, attacking the soft underbelly of the established corporations, often with fatalistic consequences. In the parlance of evolutionary biology, disruptive technology is like punctuated evolution; fast with significant changes in the gene pool.
Christensen may be excused for lacking the breadth to discuss similarities between such diverse fields as biology and business management. Still, the book would have benefited immeasurably by a co-author in the field who might have offered greater insight into universal principles governing the evol! ution of complex systems. Repeatedly I found myself going to books by authors such as Richard Dawkins and Stephen Jay Gould to refine my mental image of the multidimensional landscape in which biological organisms and industrial businesses compete for the resources of survival.
The book is well written and persuasive in its arguments. It questions many established ideas and shows that often these ideas fail to apply to disruptive technologies. Often the best corporations are especially susceptible. Defense against disruptive technologies does not come from being smarter and working closer with customers. Paradoxically, working closely with customers and following established rules for corporate investment often make a company more susceptible to harm from disruptive technologies. Companies naturally evolve toward higher-end products with greater margins. Consequently, they find it difficult to enter markets with disruptive technologies that often begin with low margi! ns, are technologically simple, and do not have a clearly d! efined customer base. Such markets are ideal for start-up firms. The author suggests, with several case histories, that one of the best ways for established firms to deal with disruptive technologies is to spin off autonomous organizations that exist within the economic constraints of disruptive technologies.
The author does an excellent job of using examples, drawing most from the disk-drive industry. He also includes examples from the computer, motorcycle, steel, automotive, and earth-moving industries as well. In each case he explains how disruptive technologies emerged and often destroyed well-run companies that were following all the established rules. This drives home the fact that disruptive technologies pose such a great risk precisely because they can destroy industries not only in spite, but because they follow established business practices.
After describing disruptive technologies, with historical cases to illustrate points, the author ends with a case st! udy involving electric vehicles. I found this chapter to be among the weakest, and something of a distraction from the more substantial earlier material. Ironically, in the process of trying to frame electric vehicles as disruptive technology, the author seems to have missed one of the best examples of a disruptive technology, and one that nearly destroyed America's foremost industries: small cars.
Overall, Christensen's work is on a high academic level, though some of the technical material is inconsistent. For example, the ordinates in figures 1.4, 1.5, and 6.1 disagree with each other. The text on page 128 also disagrees with figure 6.1, while the text on page 150 disagrees with figure 7.1. These may be simple examples of typographical errors, but they lessen confidence in the book's technical accuracy. On the positive side, the book has excellent organization and lots of pertinent examples, as well as extensive notes and documentation. The index is also very co! mplete and thorough.
Though Christensen's ideas are new! and radical they are so lucid, logical, and clear that anyone involved in American business cannot afford to ignore them.
Duwayne AndersonWas this review helpful to you?
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1 of 1 people found the following review helpful:A Must-Read!, July 6, 2005
Reviewer:
Rolf Dobelli (Luzern Switzerland) - See all my reviews Professor Clayton M. Christensen's excellent book is a classic of strategy literature. The innovator's dilemma is that doing the right things can lead to failure. Sometimes it is wrong to listen to customers, invest in the highest return opportunities and do all of the things that made a successful company succeed. Clearly written, amply documented, provocative and challenging, this book is indispensable for anyone in business. If it has a shortcoming, it is that it focuses more on the dilemma than on resolving it and it does not offer specific remedial prescriptions. However, Christensen has authored or co-authored two other books that attempt to remedy that deficiency. We heartily recommend this book, which remains the leader of the three. It has the potential to change the way managers think about business - any business.Was this review helpful to you?
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Entrepreneurs - read this & gain the upper hand, May 5, 2005
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Michael Davis "www.byvation.com" (Arlington, TX) - See all my reviews In this revolutionary bestseller, Harvard professor Clayton M. Christensen says outstanding companies can do everything right and still lose their market leadership, or worse, disappear completely. And he not only proves what he says; he tells others how to avoid a similar fate. To be a successful entrepreneur you must be able to capitalize on change. "The Innovator's Dilemma" is all about dealing with change, from the incumbent's point of view. How valuable do you think it would be to understand how your larger competitors think? That's exactly what this book talks about. Most large, established firms are inherently weak in one area - they cling to the status quo with a vengeance. While talk of innovation is commonplace, it is the attacker (entrepreneurs) who holds a definitive advantage. Without legacy systems and overbearing bureaucracy it is the entrepreneur who has the upper hand. "The Innovator's Dilemma" consists of two major parts: Part One: Why Great Companies Fail Part Two: Managing Disruptive Change This is one of the most insightful books on business that I have ever read. It explains a very important concept - how radically new (disruptive) technologies can overtake existing well-established (sustaining) technologies and in the process beat market leaders at their own game. Large companies typically ignore small markets and instead look for growth in established markets. All too often executives of large companies are reluctant to take on challenges in small and unknown terrain since they are always trained to "think big" - which is good news for Aspiring Entrepreneurs. Take heed, read this book and learn how to fully exploit disruptive technologies and become the next "great company." ----------------- Michael Davis - Editor, ByvationWas this review helpful to you?
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1 of 1 people found the following review helpful:Fresh and insightful analysis, March 18, 2005
Reviewer:
Hatem (Los Angeles, CA, USA) - See all my reviewsA great book with some very insightful ideas. Prior to reading this book, the term "disruptive technology" was foreign to me. I always thought that the large company's misfortunes were largely an indication of how short-sided or greedy their management have become. The more I read, the faster my previous assumptions disappear. We have had many companies come out of no-where and become a technological sensation over night, with products that are destined to become main stream. I never viewed those innovations as disruptive technologies but rather as fresh approaches to the same problems that have existed for sometime, which may seem sound to some, but to others who were focused on that core of business, they will see how some new innovations may spell the death-sentence for some companies as well as retire the current de facto products that are in that void. Christensen also discusses how companies can survive disruptive technology attacks and benefit from them to maintain their active participation as well as leadership in their respective industry. Foresight and the courage to invest in those disruptive technologies is key to keep the core business balanced as well as staying in touch with the new competitors.Was this review helpful to you?
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4 of 4 people found the following review helpful:Only the Paranoid Survive, October 5, 2004
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Book eater "Dan" (NYC) - See all my reviewsIn a landmark study, the author argues that the basis of competition among businesses undergoes a paradigm shift everytime a disruptive technology is born. So what is a disruptive technology? Remember what Walmart did to Sears? Of course you do, because disruptive technologies are usually products or services that are faster, cheaper, smaller, and more convinient. Ultimately, good companies must refrain from doing what got them to the top in the first place--listening to their customers and believing everything comes down to superior technology--in order to successfully compete with the onslaught of start-ups redefining both the buying hierarchies and value networks in which they are implicated. This is without a doubt one of the best business books I have ever read.Was this review helpful to you?
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Inventor of the integrated circuit dies at 81 ....
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