What is So Good About Disruption?

 

Ever since the publication of Clayton Christensen’s 1997 book, “The Innovator’s Dilemma”,  the conventional wisdom in both business school classrooms and corporate boardrooms was that “disruptive innovation” from a new entrant selling a cheaper, lower quality product, would inevitably eat the lunch of the incumbent’s more expensive, higher quality product. Christensen had drawn on the earlier work of Joseph Schumpeter, who coined the phrase “creative destruction” in the 1940’s. In this week’s New Yorker, Harvard historian Jill Lepore writes an epic take down of Christensen’s theory, but for my money she doesn’t go far enough.

Christensen used the disk drive industry to show how new entrants, making cheaper, smaller drives supposedly destroyed the business of the incumbents. But as Lepore points out, it turns out that the incumbents adapted well and a company like Seagate managed to hold on to its market share lead and all the supposed disruptors are gone. What is so wonderful about Lepore’s essay is that it puts the relatively recent concept of disruption in an historical context.

The eighteenth century embraced the idea of progress; the nineteenth century had evolution; the twentieth century had growth and then innovation. Our era has disruption, which, despite its futurism, is atavistic. It’s a theory of history founded on a profound anxiety about financial collapse, an apocalyptic fear of global devastation, and shaky evidence.

When applied to technology companies the notion of disruption has a kind of soulless darwinian feel to it. Who cares if Digital Equipment Company no longer exists? But for those of us involved in the culture business, the gleeful chuckles of the disruptors are disturbing; as they destroy first the music business, then journalism and now turn their sights on the movie and TV business (the one place of continuing cultural innovation). Lepore touches on this.

They are told that they should be reckless and ruthless. Their investors, if they’re like Josh Linkner, tell them that the world is a terrifying place, moving at a devastating pace. “Today I run a venture capital firm and back the next generation of innovators who are, as I was throughout my earlier career, dead-focused on eating your lunch,” Linkner writes. His job appears to be to convince a generation of people who want to do good and do well to learn, instead, remorselessness. Forget rules, obligations, your conscience, loyalty, a sense of the commonweal. If you start a business and it succeeds, Linkner advises, sell it and take the cash. Don’t look back. Never pause. Disrupt or be disrupted.

I am reminded of all of this as I watch You Tube destroy the music business. You Tube has decided to put up a paid music streaming service, but they won’t pay the indie artists like Jack White and Adele what they think is fair and so they will take down the artist’s official free videos, rendering them (just like Amazon’s treatment of J.K. Rowling) invisible. As David Newhoff notes,

 But because the company is all about you and all about free expression, of course, any unofficial videos that make use of these artists’ works as soundtracks will not be targeted for removal by Google.  You’ve got to love a company that can put the screws to an artist and exploit her at the same time while the “fans” applaud the whole stinking mess.  I mean that is some whack stupid evil genius shit right there.

As I have been writing recently, the tendency in the digital world is towards monopoly capitalism. If you were to ask me to invest in a start up competitor to Google or Amazon, I would tell you to not waste your time. All this talk about the wondrous benefits of creative destruction when applied to our culture is a sham. When Lana Del Rey spoke about her creative inspirations recently, it summed up what the disruptors have wrought.

Ms. Del Rey freely cites inspirations including Frank Sinatra, Bob Dylan, Cat Power, Nirvana and Eminem, but none of them emerged in this century. “Think of what’s going on now,” she said. “Where am I going to get my inspiration? I couldn’t think of a thing today that I would really genuinely want to be a part of.”

The greed heads of Silicon Valley may think that the past has nothing to teach them, but they are wrong. In their craving to disrupt everything, they are leaving us a soulless cultural desert.

 

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5 Responses to What is So Good About Disruption?

  1. len says:

    Consider a classroom setting. It is one thing to disrupt the class with a thought-provoking question. It is quite another to disrupt it with an armpit fart.

    What has been done to the music business is not innovative disruption. Nothing was improved or made better. A new means of delivery and replication of degraded sound files was created and promoted. Otherwise it is simply theft.

  2. Fentex says:

    I have long thought that the “disruptive innovation” concept was a simple observation about one or tow unique incidents and not a very useful objective for people seeking business.

    Doing something people know they want better than others are doing it is the way most people must seek profit in business, those that can change a market by finding something entirely new are rarities that cannot be forced and usually rely on moments when long brewing components come to the boil and make the new thing obvious to many.

    The Internet however is an innovation and it is disruptive with it’s repercussions – the removal of distribution barriers for anything digitizable is a unavoidable disruption. One should not confuse the reality of it’s nature with discussions about the way businesses must need adapt to it.

    The Internet is a disrupting innovation, that cannot be denied. It does not follow from it’s overwhelming influence and intrusion into every life that disruptive innovation occurs often and is a successful means when it does to increase profits.

  3. Fentex says:

    Ms. Del Rey freely cites inspirations including Frank Sinatra, Bob Dylan, Cat Power, Nirvana and Eminem, but none of them emerged in this century. “Think of what’s going on now,” she said. “Where am I going to get my inspiration? I couldn’t think of a thing today that I would really genuinely want to be a part of.”

    Exactly what is being complained about here? That we are not directed by gatekeepers to concentrate on the same entertainment?

    What if people, now free to seek any entertainment they please from around the world, do not concentrate their attention and wealth on a popular few exploited by even fewer but now spread their attention wider in more pursuits sprinkling their attention and wealth more widely and less obviously to monitors?

    How could you tell that from a total absence of quality that I imagine was meant to be implied?

    I am not convinced that talent has vanished from the world or that it’s holders and practitioners are unavailable to those who seek them merely because no corporate identity exists for everyone to be compelled to observe.

    I have no reason to believe that Ms. Del Rey (of whose work I bought two CD’s) isn’t simply whining that the world has changed without favouring her, which deserves no more sympathy than anyone having to scratch to survive. I certainly see no reason to think the absence of concentrated attention on a few successes recommends a studio model that thieved wealth from many.

  4. Alex Bowles says:

    The basic message for start-ups and self-styled innovators was that their best bet was not to be found in making something better. Rather it was to be found in making something noticeably worse but much, much cheaper in order to clear the market of the incumbents. This would allowing the challenger to evolve towards quality once the competition had been checked.

    Implicit in this is the realization that high quality and fierce competition are mutually exclusive. To achieve something great you really do need to be left in peace. If we can’t count on markets to provide this reflective space (because obviously) then it seems like we need a counterweight in the state, and specifically in the form of a universal basic income (UBI).

    This solves a fundamental problem for artists of all stripes, but culture doesn’t stop there. It encompasses all the norms and conventions that keep people together. For instance, giving new mothers zero paid time off reflects a culture of mindless overwork and the exploitation of labor that goes largely without question in the United States. In this case, the culture has nothing to do with the arts. It’s simply an expression of raw fear and domination.

    But to the extent that artistic culture offers a prism for examining the broader culture and its discontents, it turns out that what’s good for the arts is good for everyone. Admittedly, a UBI provides an oblique response to the problem to tech-driven rapacity in the creative sphere, and may lack the moral satisfaction of a more direct confrontation. But it’s sound policy in a larger world where the tech sector is simply one of the more obvious drivers of escalating inequality (that, and eye-popping levels of tax evasion).

    In this context, a UBI really means stripping those with the most control of their ability to freely erase another individual’s economic well-being. Sure, give employers the power to hire and fire. But dampen the dehumanizing effects by limiting the (presently terrifying) consequences. And make opting out of directly-compensated employment an entirely a viable, if limited, possibility.

    This freedom is an extension of the democratic principle that places individual rights beyond the range of debatable policy. After all, nobody would allow the peaceful transfer of power if such transfers included the power to murder one’s opponents. Inalienable human rights keep democracy safe. By the same token, participation in a market economy should be predicated on retaining an inalienable baseline of economic security. If we add to this progress by taking the possibility of total economic ruin off the table, our entire system improves considerably. Artists can return to their muses, and the rest of us can find the time to actually pay them some attention.

  5. Alex Bowles says:

    So I’m not the only one thinking this through and settling on the UBI. But what’s interesting is that the idea is gaining traction at the top end of Silicon Valley.

    http://techcrunch.com/2014/06/21/welcome-to-extremistan/

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