Wednesday, October 14, 2015

The Prius Approach

FURR Nathan, SNOW Daniel
The Prius Approach Harvard Business Review 93, 11 (2015) 102-109

Thomas Edison’s lightbulb ushered out the gaslight era as completely as it ushered in the age of electric power. But the gas companies didn’t fall victim to disruption immediately, and it could be argued they never entirely succumbed.When Edison’s invention first threatened gas lighting, incumbent firms borrowed the filament technology from the electric bulb to improve the efficiency of their gas lighting fivefold, starving Edison’s new company of profits for 12 years and nearly bankrupting him. Experts in disruptive innovation point to that kind of move to bolster a doomed technology as the last gasp of a dying industry, and of course they’re right: Edison and electric lighting prevailed in the end. But by the time the disruption was complete, gas companies, having bought themselves more than a decade of breathing room with their gas-powered lightbulb, had prepared a profitable exit into the adjacent heating business.