The Three Laws of Disruption

Three laws govern all disruption and profitable innovation.  They are like laws of nature; they define the environment in which innovation and competition take place.

The First Law of Disruption describes a core element of life in the Age of Hyper-Innovation:

The 1st Law of Disruption

Disruption Comes to Us All.

The Second Law of Disruption defines the mechanism through which innovation is translated into market share:

The 2nd Law of Disruption

All Disruption is Caused by Changes in Product-Market Fit.

The Third Law of Disruption establishes the foundation for Quantitative Product-Market Fit.  It is a bit of a mouthful:

The 3rd Law of Disruption

The Difference in Value between two products is equal to the sum of the performance differences in each value dimension times the weight of the value dimension.

\Delta V = \Sigma[(P_{x}-P_{y}) \cdot W_{n}]

The key to profitable innovation is understanding these laws and their implications.  The implications include:

  • There are only 3 modes of Product-Market Fit change
  • There are only 3 types of disruptive attack
  • There are only 5 ways that companies can cause changes in market share to occur

These are all part of the Innovator’s Toolkit.  But first, let’s look closely at what Product-Market Fit really is.

NEXT: Q-PMF and the Secret Formula

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