No. 205 · Strategy · Economics
Disruptive Innovations
Giants are often toppled by cheap, simple newcomers they once thought too small to matter.
In the Almanac
“Nucor’s mini-mills”, 1969–1989 · “M-Pesa”, 2007
Both stories in full, three ways to use it and where it misleads.
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Questions
What is Disruptive Innovations?
A disruptive innovation starts at the bottom of a market or creates a new one by being simpler, cheaper or more accessible. Incumbents dismiss it, but it improves and moves upmarket. Nucor's mini-mills began with rebar, and M-Pesa served Kenyans banks ignored.
How do you use Disruptive Innovations?
Use it to spot threats and opportunities that look too small to matter. Learn basic new tools early, test low-cost alternatives to expensive habits, and start your own learning small. Watch the trajectory, not just the starting point.
When does Disruptive Innovations matter?
Disruptive Innovations is one of the 56 mental models for strategy, the situations where you ask: How do I win when others want the same thing? Within that, it belongs to “Staying ahead of change”, alongside Creative Destruction, Cultural Evolution and Generals Fighting the Last War.
What is an example of Disruptive Innovations?
Two stories show it at work: Nucor’s mini-mills (1969–1989) and M-Pesa (2007). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Disruptive Innovations?
Creative Destruction, Niches and Minimum Viable Product. Disruptive Innovations itself comes from economics.