"“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.”"

"The thesis of the book is that incumbents in markets — especially large and well entrenched markets — seldom survive fundamental technology changes in their industries."

"In fact, the incumbent is usually very dismissive of this new competition as our the large buyers of the incumbent’s products."

"And weirdly the buyers of this technology often have a vested interest in buying from the incumbent."

"So the startups tend to focus on totally new customers."

"What is “disruptive” is that is also dramatically less expensive. And the providers take a much lower margin — they have nothing to lose, nothing to protect."

"First, over time Salesforce.com’s technology got better and better yet the price didn’t shoot up dramatically relative to Siebel. And after a few years enterprise customers started looking at the cost disparity and saying, “maybe Salesforce.com is good enough to meet our requirements?”"

"And if the incumbent did dramatically cut costs all they would seemingly do is start following the lead of the new entrant? There you have the innovator’s dilemma."

"So they do the opposite. The increase spending on features / performance / functionality. They gather with their cadre of high-requirement customers and have planning sessions about how they can make even more performant products."

"And as you trace the red line in the graph above as it gets closer and closer over time to the new entrants functional offering there is a huge and rapid sucking sound that pulls the bottom out of the market as waves of customers “trade down.”"

"Disruptive technologies are often those the are less performant and feel “chintzey” relative to their well-heeled competitors. They are radically lower in price. They initially create deflationary pressures in a market. They are nearly impossible to react to. But while the price points are dramatically lower this often encourages more users, more innovation in the eco-system and therefore often a bigger market opportunity than even the incumbents perceived"

"But anecdotal evidence tells me that incumbents eventually struggle to massively disrupt their own large and profitable businesses — that change has got to come from outside."

"Perhaps the best they can do is to help fund their successors."