Proactive Disruption

What drove Apple to invent the iPhone? According to insiders, it was the phenomenal success of the iPod, and the potential vulnerability to disruption that that success presented.

"By 2005 iPod sales were skyrocketing. And astonishing 20 million were sold that year, quadruple the number of the year before. The product was becoming more important to the company's bottom line, accounting for 45% of the revenue that year, and it was also burnishing the hipness of the company's image in a way that drove sales of Macs.

"That is why Jobs was worried. 'He was always obsessing about what could mess us up,' board member Art Levinson recalled. The conclusion he had to come to: 'The device that can eat our lunch is the cell phone.' As he explained to the board, the digital camera market was being decimated now that phones were equipped with cameras. The same could happen to the iPod, if phone manufacturers started to build music players into them. 'Everyone carries a phone, so that could render the iPod unnecessary.'"

(From Water Isaacson's excellent, "Steve Jobs")

This is a fantastic question to ask as an organization: "What could mess us up? What could eat our lunch?" The most important time to ask the question, as the iPhone / iPod story demonstrates, is when we are flying high... Perhaps there's some truth to Andy Grove's adage, "Only the paranoid survive"...

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