There’s a certain kind of CEO who has done the reading.
They can diagram Christensen’s two types of disruption on a whiteboard. They know the difference between sustaining and disruptive innovation. They’ve built organizational muscle around it—monitoring the low end for cheap entrants, watching non-consumption for new market disruptors, resisting the gravitational pull upmarket.
And it worked. The company hasn’t been disrupted. Competitors who tried to enter from below got countered. The core business is strong, profitable, defensible.
But growth has flattened. The product line hasn’t meaningfully changed in years. The company is safe but not growing. The disruption dashboard is green. The revenue graph is flat.
The question isn’t “did you learn the wrong framework?” It’s “is one framework enough?”
What Christensen Gives You (And Why It Earned Your Confidence) ¶
Clayton Christensen’s contribution to strategy was enormous. Before The Innovator’s Dilemma, disruption was a vague fear—“things are changing and we don’t know what to do.” Christensen turned it into a specific, diagnosable pattern with prescriptive responses.
He identified two distinct types:
Low-end disruption: Incumbents focus on their most demanding and profitable customers, eventually overshooting what mainstream customers need. Disruptors enter at the bottom of the market with a cheaper, simpler product and an enabling technology that lets them march upmarket while maintaining cost advantages. Nucor’s steel minimills eating integrated mills from rebar upward. Toyota and Honda entering the US auto market below Detroit’s notice.
Low-End Disruption Pattern:
Performance
↑
| Incumbent (overshooting)
| /
| /
| / ← Gap: over-served customers
| /
|/ _ _ _ Disruptor enters here, moves up
+————————————————————→ Time
New market disruption: Non-consumers are locked out of existing markets because products are too expensive, complex, or inconvenient. Disruptors create simpler, more accessible products on a different performance dimension, pulling non-consumers in. As the technology improves, it begins pulling lower-end customers from the existing market until the two markets collapse into one. Portable ultrasound devices letting paramedics do what previously required a hospital. Personal computers bringing computing to people who’d never use a minicomputer.
New Market Disruption Pattern:
Performance₁ Performance₂
↑ ↑
| Incumbent | Disruptor
| / | /
| / | /
| / | / ← Non-consumers enter here
+————→ Time +————→ Time
Existing market New market
(eventually these two collapse into one)
The real power of Christensen’s work: it’s prescriptive. Set up a separate organization for disruptive bets. Don’t flee upmarket reflexively. Watch for non-consumption. Monitor whether you’re overshooting. Actionable, not just descriptive.
If you’ve internalized this and built organizational responses around it, you’ve done more than 90% of executives. Give yourself credit. The argument here isn’t that Christensen is wrong. It’s that the map has edges.
The Two Doors You’ve Locked ¶
Think of your company as a building with multiple entry points for competitive threats. The prepared CEO has identified and secured two real doors:
Door 1 — Low-End Entry: LOCKED ✓
"Is anyone offering a cheaper version
to our least profitable customers?"
Door 2 — New Market Entry: LOCKED ✓
"Is anyone serving non-consumers with
a simpler, more convenient alternative?"
Two doors locked is better than most companies manage. Many don’t even know these doors exist.
But the building has more doors.
Schumpeter’s Five Doors ¶
Fifty years before Christensen published The Innovator’s Dilemma, Joseph Schumpeter described something much bigger.
In Capitalism, Socialism and Democracy (1942), Schumpeter argued that creative destruction isn’t a specific pattern to watch for—it’s the fundamental engine of capitalism itself. The “perennial gale” that continuously restructures economies from within.
Where Christensen identified two patterns of disruption, Schumpeter identified five types of “new combinations” that drive creative destruction:
Schumpeter's Five New Combinations:
1. New products
2. New methods of production
3. New markets
4. New sources of supply
5. New forms of organization
Map Christensen onto Schumpeter:
Schumpeter's Doors: Christensen Coverage:
1. New products Partially (low-end only)
2. New methods of production —
3. New markets ✓ (new market disruption)
4. New sources of supply —
5. New forms of organization —
Christensen covers door 3 well and part of door 1. That’s genuine, valuable coverage. But doors 2, 4, and 5 are unguarded.
The deeper difference: Christensen says disruption is a specific pattern you can diagnose and respond to. Schumpeter says destruction is the default state of capitalism. One gives you a monitoring system. The other gives you respect for how much you can’t monitor.
What’s Behind the Other Doors ¶
This isn’t theoretical. Each unguarded door has real failure modes.
Door 1: New Products That Don’t Fit the Pattern ¶
Christensen’s framework handles one type of new product: the cheaper, simpler alternative that enters from below. But some new products don’t enter from below at all. They aren’t cheaper. They aren’t simpler. They don’t target non-consumers or over-served customers. They’re just fundamentally different.
Christensen's new product pattern:
Worse on existing metrics
+ Cheaper or more convenient
+ Targets low-end or non-consumers
= Disruptive innovation
Products that don't fit:
Different on existing metrics (not worse)
+ Not necessarily cheaper
+ Targets the same customers
+ Redefines what "performance" means
= ??? (not disruption by definition)
The prepared CEO’s framework would classify these as sustaining innovations—and Christensen’s research says incumbents almost always win the sustaining innovation race. That’s often true. But “almost always” isn’t “always,” and the exceptions can be existential.
When the performance dimension itself shifts—when customers start valuing something your framework doesn’t even measure—the disruption dashboard stays green while the ground moves under you.
Door 2: New Methods of Production ¶
Nobody attacks your product. The economics of producing it just change underneath you.
Traditional competitive threat:
Competitor → builds similar product → competes for your customers
Door 2 threat:
New technology → makes it 10x cheaper to produce similar value
→ Anyone can now offer what you offer
→ Your cost structure becomes a liability, not an asset
This isn’t disruption in Christensen’s sense. No one is entering from the low end. No one is targeting non-consumers. The product itself hasn’t changed. But when AI, automation, or some other technological shift makes it possible to replicate 80% of your value at 1% of the cost, the effect is the same.
Your monitoring system is watching for competitors. This is a shift in production economics that enables a thousand competitors simultaneously.
Door 4: New Sources of Supply ¶
The inputs to your industry change, and your cost structure becomes obsolete.
Your business model assumes:
Content is expensive to produce
Software requires paid engineers
Data requires expensive collection
Expertise requires credentialed professionals
What if:
Content becomes user-generated
Software becomes open source
Data becomes synthetic or freely available
Expertise gets encoded in AI tools
Open-source software didn’t “disrupt” commercial software in the Christensen sense. It didn’t start worse and get better. In many cases, it started comparable and was free. That doesn’t fit the low-end or new-market pattern. It’s a supply-side shift: the inputs that used to cost money became available at zero marginal cost.
When the supply base changes, every business model built on the old supply economics is at risk—regardless of how well you’re monitoring the traditional competitive landscape.
Door 5: New Forms of Organization ¶
The shape of competition changes, not just the competitors.
Traditional competition:
Company A vs. Company B
(similar structures, different strategies)
Door 5 competition:
Pipeline company vs. Platform
Integrated firm vs. Ecosystem
Corporation vs. Open-source community
Centralized vs. Decentralized
Platform businesses can disrupt pipeline businesses in ways that don’t show up on a disruption S-curve. An ecosystem of loosely coordinated participants can outcompete an integrated incumbent without any single participant being a “disruptor.” Open-source communities can destroy pricing power without having a business model at all.
Christensen’s framework assumes a recognizable competitor entering your market. Door 5 threats often don’t look like a competitor. They look like a shift in how the game is played.
The Peripheral Vision Problem ¶
This isn’t a failure of intelligence or diligence. It’s a feature of frameworks.
Any coherent model creates clarity within its scope and peripheral vision loss outside it. Christensen’s framework is so internally coherent—two disruption types, clear diagnostic questions, prescriptive responses—that it feels complete. It has the satisfying structure of a finished theory.
That satisfaction is the risk. Three ways it shows up:
The classification reflex. New threats get forced into “is this low-end or new market?” If it’s neither, the instinct is to classify it as “not disruption”—which is technically correct within Christensen’s definitions but strategically dangerous. “Not disruption” doesn’t mean “not a threat.”
Defense crowds out offense. The organizational energy goes to monitoring, securing, responding. The company becomes excellent at not-dying—and forgets how to grow. Survival is necessary but not sufficient.
Confidence substitutes for curiosity. “I understand how companies die” starts feeling equivalent to “I understand how to stay alive.” But knowing the two most common causes of death doesn’t mean you know all of them. And it certainly doesn’t tell you how to thrive.
None of this is a criticism of the prepared CEO. It’s a limitation inherent in relying on any single lens, no matter how good that lens is.
Building on the Map ¶
The point isn’t to replace Christensen. It’s to add coverage. The two doors stay locked. We’re guarding the other three.
For new products (door 1): Jobs to Be Done as an early warning system. If the job your customers hire you for starts fragmenting across other products—even products that aren’t “disruptive” in the technical sense—that’s the signal. A competitor doesn’t need to enter from below if they redefine what “below” and “above” mean.
Monitor:
Not just "is someone entering our market from the low end?"
But "is the job we're hired for being done differently elsewhere?"
For new production methods (door 2): Watch cost structure shifts, not just competitive entries. When a technology makes it dramatically cheaper to produce similar value in adjacent industries, it’s coming for yours next. The threat isn’t a specific competitor—it’s an economic shift that enables many competitors at once.
Monitor:
Not just "who is competing with us?"
But "what does it cost to produce what we produce,
and is that changing?"
For new sources of supply (door 4): Track where your inputs come from and what happens if they become free or commoditized. If your business model depends on expensive content, expensive software, expensive data, or expensive expertise—and any of those are trending toward zero marginal cost—the clock is ticking regardless of your competitive position.
Monitor:
Not just "who are our competitors?"
But "what are our inputs, and are they being
commoditized or made free?"
For new organizational forms (door 5): Study platform and ecosystem models, especially outside your industry. If your industry is structured as pipelines and someone figures out the platform version, the competitive dynamics change entirely. This doesn’t show up as a low-end entrant. It shows up as a different game.
Monitor:
Not just "who is entering our market?"
But "is someone restructuring how this market works?"
Across all doors: Maintain the capacity for exploration. The CEO who only exploits the current business—even brilliantly, even with perfect disruption defense—is optimizing for a world that doesn’t change. Schumpeter’s core message is that it always does. The best defense against creative destruction isn’t better monitoring. It’s creating new combinations yourself.
The Flashlight and the Hurricane ¶
Christensen gave you a flashlight. It’s a good one. It illuminates a specific, important pattern—two patterns, actually—with remarkable clarity. It lets you see threats that would otherwise be invisible. The prepared CEO who uses it well has earned their confidence.
Schumpeter saw the hurricane.
Creative destruction isn’t a pattern you can monitor. It’s the weather. New combinations emerge from everywhere—new products, new production methods, new markets, new supply sources, new organizational forms. The flashlight helps you see what’s directly in front of you. The hurricane is everything else.
The Innovator’s Dilemma is a great book. Learning it and acting on it puts you ahead of most executives. The next step isn’t to abandon it. It’s to recognize that it illuminates two of five doors, and the storm comes through all of them.
Lock all five. And accept that in Schumpeter’s world, there’s always a sixth door you haven’t found yet.