Three laws govern all disruption and profitable innovation. They are like laws of nature; they define the environment in which innovation and competition take place.
The First Law of Disruption describes a core element of life in the Age of Hyper-Innovation:
Disruption Comes to Us All.
The Second Law of Disruption defines the mechanism through which innovation is translated into market share:
All Disruption is Caused by Changes in Product-Market Fit.
The Third Law of Disruption establishes the foundation for Quantitative Product-Market Fit. It is a bit of a mouthful:
The Difference in Value between two products is equal to the sum of the performance differences in each value dimension times the weight of the value dimension.
$latex \Delta V = \Sigma[(P_{x}-P_{y}) \cdot W_{n}]&s=4$
The key to profitable innovation is understanding these laws and their implications. The implications include:
- There are only 3 modes of Product-Market Fit change
- There are only 3 types of disruptive attack
- There are only 5 ways that companies can cause changes in market share to occur
These are all part of the Innovator’s Toolkit. But first, let’s look closely at what Product-Market Fit really is.
NEXT: Q-PMF and the Secret Formula
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