Clayton Christensen, the author of The Innovator’s Dilemma and The Innovator’s Solution, had developed a framework that explained what I was observing. In a 2004 article in Harvard Business Review, he articulated “the law of conservation of attractive profits” as follows: “When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage.”
