Blockbuster didn’t fail from lack of innovation. Neither did Kodak.

“Innovation is the ability to see change as an opportunity – not a threat.” — Steve Jobs

THE QUESTION

Why do market leaders often fail at innovation?

It seems counterintuitive, right? The companies that dominate their industries should be the best at adapting, evolving, and staying ahead. After all, they have the resources, the talent, and the experience.

But history tells a different story. Blockbuster. Kodak. Nokia. Blackberry.

Once industry giants, they all fell victim to The Innovator’s Dilemma—a paradox where following best practices leads to failure.

The issue isn’t a lack of innovation—it’s innovating in the wrong direction. Leaders become so focused on improving what already exists that they fail to see where the market is heading.

As a leader, are you reinforcing outdated models, or are you positioning your team to be ahead of the curve? Are you leveraging your agility to pivot when needed, or are you sticking to strategies that feel safe but could lead to stagnation?

THE RESEARCH

Clayton Christensen’s The Innovator’s Dilemma changed the way we think about market disruption. His research revealed that industry leaders don’t fail because they ignore customers or refuse to innovate. They fail because they focus too much on their best customers. Here’s how it happens:

• Established companies listen to their highest-paying customers and focus on perfecting existing products.
• Meanwhile, startups enter the market with “inferior” but more accessible solutions, serving overlooked customers.
• Over time, these “low-end” solutions improve and eventually take over the industry.

Think about these examples:

• Kodak ignored digital photography because it wasn’t as high-quality as film. But consumers valued convenience over quality—and the smartphone camera revolutionized photography.
• IBM built better mainframes for large corporations, while Apple made personal computers for everyday users.
• Blockbuster optimized late fees while Netflix eliminated them, betting on a streaming future no one saw coming.

Each of these companies followed traditional business wisdom: listen to your best customers, refine your best products, and protect your core market. Yet, that’s exactly what made them blind to disruption.

SOME ADVICE

Most managers and leaders assume that innovation means improving what already exists. But real disruption often comes from creating something entirely different for an underserved market. Here’s the mindset shift:

• Instead of just optimizing for current customers, look for the gaps in the market.
• Instead of waiting for technology to be perfect, bet on where it’s going.
• Instead of dismissing “low-end” solutions, pay attention to what early adopters are excited about.

Great leadership isn’t just about building better teams and products—it’s about challenging the status quo and creating new possibilities.

YOUR HACK

Want to spot disruption opportunities before they happen?

Try this framework:

1. Identify the Overlooked User – Who in your industry is underserved? Where do traditional companies say, “There’s no real market for that”?

2. Find the “Good Enough” Alternative – What solutions already exist that may not be “best in class” but are cheaper, more convenient, or more accessible?

3. Ask What Happens If It Improves – Imagine if that “good enough” alternative became 2x better in five years. Would it threaten the industry?

4. Follow Where the Friction Is – Disruption often comes from eliminating pain points. Where are customers frustrated but have no alternatives?

5. Bet on Accessibility Over Perfection – The most successful innovations aren’t always the highest quality. They’re the ones that make something widely available.

PARTING THOUGHTS

Leaders and managers don’t fail because they stop innovating. They fail because they innovate in the wrong direction—focusing on what’s comfortable instead of what’s next.

Disruptive ideas rarely start with perfection. They start by serving the people others ignore and improving over time.

So here’s your challenge:

Are you focused on refining what exists, or are you positioning yourself and your team to spot and create the future?

The best leaders don’t just adapt to change—they drive it.

Lead boldly. The future belongs to those who see opportunities before the rest of the world catches up.

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Sincerely,

The Unicorn Labs Team

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THANKS FOR YOUR SUPPORT!