EBUSINESS
Accepting an award at a recent banquet, Donna Dubinsky, once CEO of Palm Computing and now head of rival handheld outfit Handspring, offered the following maxim: "Incumbency can be a disadvantage." In other words, a market leader often falls prey to an emerging technology.
This is precisely the cautionary tale in Clayton Christensen's 1997 The Innovator's Dilemma (Harvard Business School Press). He illustrates how difficult it is for managers at established companies to optimize business while adapting to new - the Harvard professor calls them "disruptive" - technologies like the Net.
Of course, tech startups like Handspring live for this dilemma - they aim for disruption. Yet, as the unruly upstarts mature, they too become subject to the dilemma, which explains why CEOs such as Amazon's Jeff Bezos recommend the book. Wired checked in with Christensen to ask how new companies can avoid old mistakes.
How can startups stay out front?
No one's an Internet expert yet, but the only way to compete today is to be faster to market with more targeted services, and to do that you want your business to have a modular architecture so you can mix and match functions.
So, focus on consumer choice?
The world is shifting from one-size-fits-all to what's right for each customer. Take the Harvard Business School. We have a one-size-fits-all MBA. But there's huge growth in universities that have a modular curriculum so students build their own MBA.
In a sense, you advise developing an online business as a kit of parts?
Yes. You see everywhere that the product design cycle is accelerating. Even in the automotive industry, the cycle has gone from 6 years to 18 months. The way they've done that is analogous to what Net companies need to do: They have many, many modular parts that can be reconfigured to make a car in less time.
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