Gustavo Ballvé on June 11th, 2012
Food for thought, Home, Mental models

Reading the beginning of David Brooks’ article “The Creative Monopoly“, I was immediately drawn to Prof. Clayton Christensen’s work on disruptive innovation. Then the article took an unexpected turn and I have a couple of gripes with his conclusion, but it’s still worth the mention here. I am a fan of David Brooks, by the way (I’ve been posting his articles since 2009). Highlights inside.

The article reminded me of the lectures on disruptive innovation by Prof. Christensen that I attended back in January because of these excerpts:

“(…) [Peter] Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.

(…) Now to be clear: When Thiel is talking about a “monopoly,” he isn’t talking about the illegal eliminate-your-rivals kind. He’s talking about doing something so creative that you establish a distinct market, niche and identity. You’ve established a creative monopoly and everybody has to come to you if they want that service, at least for a time.”

While we definitely recommend our own post on Prof. Christensen, which discusses his latest work as well as his “disruptive innovation” models, this video is a good introduction for the latter. What Peter Thiel, in the excerpts above, seems to be suggesting is precisely the kind of things that lead to a disruptive innovation in a given industry.

The problem is Brook’s conclusion: “Competition has trumped value-creation. In this and other ways, the competitive arena undermines innovation.”

I immediately thought about AB-InBev and the culture of execution that, given the unprecedented ferocity of its implementation and relentless improvement over decades, stands out as an innovation of its own. So, to me, the competitive spirit can foster innovation, at least the non-traditional kind.

I also don’t see how the competitive spirit could somehow be absent from the mind of a “disruptive innovator” such as a Steve Jobs or a… Peter Thiel. It is, at the very least, one of the driving forces behind such innovators.

But again, Buysiders.com is about studying mental models, frameworks and building blocks to be apple to apply them as each situation demands it. That means not “marrying” either side of this debate, if there ever was one.

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