THE TRADE‐OFF STRATEGY OF DISRUPTIVE INNOVATORS by Dr. Rod King
Have you ever wondered how innovators come up with ideas for disruptive products such as
Nintendo’s Wii, YouTube, MP3, and Swatch? I have often wondered too.
Many books have been written about the strategy of disruptive innovation and creative
destruction. The most famous is probably Clayton Christensen’s seminal book, “The Innovator’s
Dilemma.” Although Christensen’s book is comprehensive and insightful, his conceptual
framework appears abstract and not immediately useable in strategic planning. Kevin Maney’s
new book, “Trade‐Off,” also covers disruptive innovation. However, Maney’s book uses a
simpler visual framework and operational language. Subsequent analysis in this article
therefore draws more upon Maney’s Fidelity/Convenience model which puts the trade‐off
concept at the center of disruptive innovation and business success.
‘Good Enough Fidelity’ and ‘High Convenience’ are the defining characteristics of products that
reflect a Disruptive Innovation strategy. Disruptors try not to initially develop high performance
or ‘perfect’ products or services which are usually expensive, complex to use, and inaccessible
for the mass of the population. Successful disruptors know that high performance products and
services often have a high degree of trade‐off and therefore present opportunities for
disruption. By monitoring inherent trade‐offs in customer experiences, disruptors can virtually
smell where opportunities lie for disruptive innovation.
The degree of trade‐off can be considered as a ratio of Customer Pain to Customer Delight (or
ratio of Customer Inconvenience to Customer Fidelity). By focusing on the degree of trade‐off
as a metric, one can get further insights into the trade‐off strategy of disruptors. The main
strategy of a disruptor is to significantly reduce the degree of trade‐off by reducing Customer
Pain or Inconvenience through a decrease of Customer Fidelity. This disruptive approach goes
against the mindset of market leaders who usually focus on providing greater Customer Delight
or Fidelity at higher cost, that is, at the expense of Customer Convenience. The result is that
market leaders develop products that have high performance but are highly inconvenient for
the masses who hardly buy and use the products. Market‐leading and matured products are
therefore good ‘preys’ for disruptors.
Disruptors mainly reduce Customer Fidelity by laser‐focusing on the fundamental functionality,
character, or meaning of a product; “the 20% feature that is used 80% of the time.” Disruptors
have a ‘no frills’ mindset and this helps in trimming excesses or ‘fat’ off market‐leading
products. Disruptors are often aided by emerging technological innovation. However, higher
performance products can be disrupted with little or no innovation in technology; process and
business model innovation do not necessarily require technological innovation. One advantage
of technological innovation is that it enables disruptors to redefine the meaning and value
proposition of the product and thereby create a Blue Ocean of opportunities which sometimes
fundamentally change their ecosystem as well as rules of the game.

Customer Fidelity and Inconvenience are strongly related. Often, by reducing Customer Fidelity
of a market‐leading product and especially by lowering performance, Customer Inconvenience
is also reduced. The product becomes more affordable, easier to use, and accessible
(widespread). No wonder that high performance products subsequently lose market share. The
main risks of disruptive products include product imitation, commoditization, and/or price war
from incumbents that eventually lead to bloody Red Oceans. But for many disruptors, the
benefits of disruption outweigh its costs and risks.
In a world sailing towards greater abundance in products and services, ‘good enough’ may just
be the new ‘Gr8.’ But, for how long? History shows that a ‘good enough’ product eventually
evolves towards a higher performance and more complex product that is “inconvenient” and
alienates the mass of population. And the product – a former predator – becomes a ‘prey’ for a
new generation of disruptors. And the evolutionary spiral continues … with the degree of trade‐
off for the species of product getting smaller, smaller, and smaller … The ideal final result is zero
trade‐off. And that’s exactly what the mass of customers want: Free, Perfect, Now! But for now,
most customers are driven by Cheap, Good Enough, and Now. That’s the mantra of the Good
Enough Economy. But, for how much longer?
Best,
Rod.
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Dr. Rod King
rodkuhnking@sbcglobal.net
http://tradeoffmap.ning.com
http://twitter.com/RodKuhnKing