Do disruptive innovations always start as not as good?

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Apr 29, 2010

I had an interesting discussion with Jose Ferreira, the founder of Knewton, a couple weeks ago after a panel that I moderated and on which Jose participated concluded at the Arizona State Education Innovation Network conference. I thought it worth writing about, and Jose was kind enough to let me share the details.

Jose’s point to me after the panel was that it’s not always the case that a disruptive innovation is not as good as the leading products or services along historical dimensions, and in education, because the bar has been so low for so long, it could be that it’s rarely the case (and I should adjust my language accordingly when I describe a disruptive innovation).

It’s a good point, and one with which I don’t entirely disagree. Occasionally we do see an innovation come along that is both demonstrably lower in cost and higher in quality according to traditional metrics, such that the leading organizations have trouble responding and it transforms a sector. It’s just that it’s very rare because those are both generally very high hurdles. Clayton Christensen and Jason Hwang write about this in The Innovator’s Prescription.

The reasons for emphasizing that it’s generally the case that a disruptive innovation is not as good along historical measures of performance are (1) this is generally how it happens; (2) that people often get confused and believe that breakthrough improvements are disruptive, when in fact they are sustaining innovations; and (3) to help people see that just because something doesn’t look good today, they might think twice before dismissing it out of hand, as it could look very different in the future, and they probably want to avoid being like the leaders in the computing industry who didn’t understand the potential of the personal computer.

Indeed, in education, many of the recent disruptive innovations in online learning have been pooh-poohed. Established universities did not lead the transition to online learning, as did the University of Phoenix and others, in part because of concerns over “quality.” Today many continue to dismiss these innovations in that market. Similar things have occurred in the K-12 education space.

Although studies consistently show that, on average, online learning is better than traditional face-to-face classrooms, learning has not historically been the measure of performance that society cared about (perhaps surprisingly), as we discuss in Disrupting Class, and therefore along historical measures (however meaningless those might be), online learning hasn’t necessarily fared particularly well initially, as it hasn’t looked and felt like the old system (which is a good thing in my opinion).

Jose’s follow up point to me on this, however, was also a good one. In his specific initial market of test preparation, where outcomes have always been valued, he said that not only is his service a lot less expensive than a solution from market leaders Kaplan and Princeton Review, it’s also a lot better—and Knewton can guarantee significant improvements as a result. I don’t know enough about the different products or services out there in test preparation to make a judgment here, and I’d be happy to see someone from Kaplan or Princeton Review respond, but the general point here about the low performance bar in education products doesn’t necessarily ring false to me, and I think Jose makes a good point that I should be more careful to say “generally” not as good as and not imply “always.”

Michael is a co-founder and distinguished fellow at the Clayton Christensen Institute. He currently works as a principal consultant for Entangled Solutions.