The answer is NO! Creative Destruction is NOT, nor will ever be, DEAD. So what about Nondisruptive creation?
After reading Kim and Mauborgne’s “Beyond Disruption,” I got my answer: NO. Creative Destruction is not only not dead, it is, as was venerated from antiquity and by Schumpeter, the way of all flesh. It may wear different clothes in this age of technology, or the Fourth Industrial Revolution, as the authors call it.
My answer did not come from anything they said, but partially from my own head, and partially by what they originally wrote about in Blue Ocean Strategy.
The authors make a good case for what they call the third path to growth, after:
• Complete disruption in the zero-sum world of conventional strategy within the boundaries of an industry. As an example, we can use Netflix streaming vs. DVD as a good example (hmm…let’s consider for a while that Netflix started in the DVD rental business). The social consequences of this type of disruption are massive in scale, like they were for everyone who worked for Blockbuster.
• Partial disruption as exemplified by Blue Ocean Strategy. Uber caused havoc and great social consequences, even suicide, in the taxi industry; but there are still taxis today,
• Then there comes nondisruptive creation, which the authors position as an innovation that has no social consequences, because it is something totally new which adds growth without something else dying or having to reinvent itself to survive. Examples they give are Viagra, Sanitary Napkins, and Prescription Eyeglasses.
Then it occurred to me, wait—the above examples were nondisruptive creation when they first came on the market, but are they now? So let’s look:
• Viagra- Pfizer’s patent expired in 2017. Immediately afterward and until now, a new industry was born- generic ED and other drugs. Hims, Roman etc. all selling generic sildenafil at a small fraction of the price of Viagra (still today). Not only could former users who could afford the outrageous price of Viagra replace it with a cheaper alternative, but a whole new marketplace was born. Think about it—ED, which occurs to something like half the men over 40, does not restrict itself to the rich. Now an even bigger market was born, all those who had ED but not the means to buy Viagra.
Somebody said, not sure who, “if you fail to prepare, prepare to fail.” Pfizer had literally 20 years to think about what would happen after the patent expired. Maybe they thought about it, but they did nothing. Of course, as a result, their business has declined.
Sales peaked at $2 billion and now the graphic has them at $0.5. It is difficult to estimate the market size today because of the price difference (generic around $.37/pill vs. $5.75 for the supposed real deal), but my guess is that the market is growing for the generic providers.
2. Sanitary Napkins
Were first marketed by Johnson & Johnson in 1888 as “Lister’s Towels.” The nondisruptive creation didn’t last long as you can find ads for other brands as far back as 1900
The current market size is huge- $23.6 Billion in 2022 projected to grow to $34.03 billion by 2030. But this market has never, in real life, been a nondisruptive market. It is a conventional market and a zero-sum game. Most women will continually use the same item and, if they switch, it will not be a partial switch.
3. Prescription glasses- This is the most ridiculous citation of “nondisruptive creation.” Some sort of corrective lens goes back until latest the 15th century (1430) and the first protoype of modern eyeglasses with arms was invented in 1727 and made its debut in 1750. Here is Warby Parker’s timeline:
Looking at the timeline, exactly when was prescription eyeglasses a nondisruptive creation and when did it become a zero-sum game?
So is there no such thing as “nondisruptive creation?” I believe there is, but not only is it not enduring, it is the beginning, the birth, of Creative Destruction and its original iteration leads to a disruptive marketplace. Will it be total disruption or partial disruption a la Blue Ocean Strategy?
Depends on what? Depends on what the product is and its usage, as we can see from the above. IF it is simply an innovation of an existing product that calls for substitution if adopted, then it fits the total destruction mode.
IF it is a product that crosses markets, as in Blue Ocean Strategy, it will be more difficult to copy and will not total destroy the disrupted product.
But in no case that I can see will a non-disruptive creation be in the garden of eden for long.
It can be a bit of a scary thought that, no matter what you do or invent, that you can be disrupted sooner or later. And, in today’s crowed marketplace, how do you prevent that from happening?
GO DISRUPT YOURSELF.
My best example of this business strategy is Apple. I am sure it was well known that the smartphone would replace the iPod, likewise with all the other trends Apple has captured since. Philosophy should be, I have to act like I work for another company and figure out how I would disrupt the current products. Then do it yourself- or someone else will. This entails waking up every day thinking about how you are going to improve or take the next step, not going to sleep or living in a bubble of denial as so many have done (think Nokia).
So, in conclusion, my position on Creative Destruction now is that it is not replaced by Nondisruptive Creation; it is, in fact, the beginning of that cycle.
So I won’t change my classes—totally. But, thanks to Kim and Mauborgne, I can present them with the most complete picture of product strategy.
AND, I understand that there is no answer for disruption. Just a matter of who, when, and how.
Wikipedia, “Menstrual Pad,” https://en.wikipedia.org/wiki/Menstrual_pad#:~:text=The%20first%20commercially%20available%20American,by%20Johnson%20%26%20Johnson%20in%201888.
Verified Market Research, https://www.verifiedmarketresearch.com/product/sanitary-napkin-market/
Warby Parker, "When were glasses invented?" https://www.warbyparker.com/learn/when-were-glasses-invented#:~:text=The%20invention%20of%20the%20printing,and%20sold%20by%20street%20vendors.