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.