The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail

by Clayton M. Christensen

First, I would acknowledge that, by definition, electric vehicles cannot initially be used in mainstream applications because they do not satisfy the basic performance requirements of that market. I would therefore be sure that everybody having anything to do with my program understands this point: Although we don’t have a clue about where the market is, the one thing we know for certain is that it isn’t in an established automobile market segment. Ironically, I would expect most automakers to focus precisely and myopically on the mainstream market because of the principle of resource dependence and the principle that small markets don’t solve the growth and profit needs of big companies. I would not, therefore, follow the lead of other automakers in my search for customers, because I would recognize that their instincts and capabilities are likely to be trained on the wrong target.