The Innovator's Solution: The 5-Stage Strategy Framework For How Incumbents Survive & Thrive [Part II]

Category Design has a clear playbook and prescription to grow.

Arrrrr! 🏴‍☠️ Welcome to a paid edition of Category Pirates. This foundational series shares category design principles, strategies, and actionable frameworks to help you design new and different categories. Thank you for reading. And, of course, forward this mini-book to anyone you want to invite aboard the Pirate ship.

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Dear Friend, Subscriber, and Category Pirate,

Last week, we published Part I of The Innovator's Delusion, where we took a hard look at Clay Christensen's The Innovator’s Dilemma through a category design lens. 

However, that was just the tip of the iceberg.

ARRRRRR!!!!!

Let's recap what we've discussed so far.

While we respect Clay Christensen’s groundbreaking work, his prescriptive advice — especially for incumbents — has led many businesses straight to failure.

And…the idea that innovations (aka, products & services) disrupt markets is, in a word. Wrong. New markets emerge (or existing ones get re-designed) when Superconsumers are presented with a new/different problem. 

Nobody will buy your solution unless they agree with the problem you claim to solve.

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Want to listen to this mini-book instead? Head to the audiobook version, available to all paid subscribers.

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New ways of thinking about problems or opportunities open people up to considering new categories of solutions.

Yet, The Innovator's Dilemma led multiple generations of startup founders astray by convincing them that products (innovations) change markets. All by themselves. If that was true, it would not have taken the wheel 300 years to be used for transportation, and we’d all be drinking Red Bull Cola, driving our Segways to the Microsoft Store.

In The Innovator’s Delusion mini-book, we shared examples like United Airlines’ "Ted" and the American Express Blue card to show how following the disruptive innovation playbook often backfires. 

The a-ha:

Businesses don’t win by disrupting themselves but by designing entirely new categories. 

If you missed Part 1, catch up before diving into Part 2. Here, we'll continue to lay out the steps for incumbents to thrive in today's market. We'll also break down the "Innovator's Solution" framework (an alternative to Clay's "disruptive innovation" prescription) using the Magnificent 7 companies.

Now, to dive back in.

The Category Five 

Typically, incumbents face five potential responses in the face of a new category on the horizon: