Saturday, September 15, 2012

Schumpeterian gales

There are multiple creative destruction happening now.  Also known as Schumpeter's gales, it is common to see new entrant in the market to disrupt the existing leading players and change the game entirely.  When the disruption gains the momentum and crosses the chasm, this disruptive process moves much faster than anyone anticipates.

I saw two examples of this creative destruction discussed in recent articles.

1. Newpaper advertisement

Dr. Mark Perry wrote how precipitously newspaper advertising revenue has nosedived, and shared the graph of how newspaper ads revenue has collapsed.  It's amazing how fast the revenue has declined.  What changed?  Social media and mobile devices.

2. Microsoft-Intel PC

Silicon Alley Insider shared a chart by Horace Dediu of Asymco illustrating how Microsoft-Intel duopoly has  been losing its grip on personal computer market.  Once thought of as the dominant combination of Windows on Intel chips is now rapidly giving its way to Apple iOS and Google Android.  What happened?  iPhone, Android devices and tablet computers.

When market gets disrupted by new player with fresh product and it crosses the chasm, it's often too late for incumbents to defend their position.  Once early majority starts jumping the ship, the creative destruction is already in its full swing.

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