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Helmerâs Razor
Can disruption be simplified?
About 700 years ago, a boy named William was born in an English village called Ockham. When he grew up, he went away to school, and there he devoured theology, logic, and philosophy. His friends called him âWilliam from Ockham.â
As William digested the ideas of his elders, he couldnât resist the thought that they contained many unnecessary elements. He was a skeptic. A free thinker. He felt an irresistible urge to simplify ideas to their essence. He was the Steve Jobs of medieval Franciscan monks.
This of course got William into trouble. He was condemned by the church, and forced to plead for forgiveness in front of a papal court.
But history remembers William more kindly. A couple hundred years after he died, one of his fans coined the phrase ânovacula occamiâ (Occamâs razor) to immortalize his signature move, and now everybody learns Occam's razor in philosophy 101. Take that, pope!
In a nutshell, Occamâs razor says âthe simplest explanation is most likely the right one.â Itâs not always true, but it tends to be true, because the more elements you have in an explanation, the more likely one of them is to be wrong.
Iâm not sure if Hamilton Helmer had Occamâs razor in mind when he was developing the idea of âcounter-positioning,â but I like to think William from Ockham would approve. Like Clay Christensenâs theory of disruptive innovation, counter-positioning tells the story of how powerful incumbents struggle to respond to challenges from new upstarts â but it does so in a much simpler way, shaving off all unnecessary elements.
Of course, Helmer assures us that he is a fan of Christensenâs work, and claims that disruption and counter-positioning are complementary theories. But if you read closely and think his ideas through, itâs hard to avoid concluding that counter-positioning contains a potent critique of disruption.
âŠ
Counter-positioning is, as promised, a simple idea:
Incumbents wait too long to copy startups with superior business models when doing so would damage their existing business. The old adage âif you canât beat them, join themâ turns out to be easier said than done. This happens because of some combination of legitimate uncertainty, cognitive biases, and flawed CEO compensation schemes.
And thatâs it! Thatâs the idea. Here are a few popular examples:
- The iPhone counter-positioned Nokia and Blackberry
- In-N-Out counter-positioned McDonalds
- Netflix counter-positioned HBO
- Tesla counter-positioned pretty much everybody
This is obviously quite similar to disruption theory, but way simpler. No more breakdown from an integrated to modular system. No more cheaper / worse products targeting the low-end or non-consumers. No more âovershooting performance required to satisfy the customerâs job-to-be-doneâ.
Helmerâs razor shaves all these concerns away.
Of course, thereâs value to all those ideas. But one wonders how necessary they are, if your goal is to understand the mechanisms that cause powerful incumbents to stumble when confronted by certain types of startups.
Acolytes of Disruption â myself included đ â like to correct the unenlightened and say things like, âwell actually the iPhone wasnât disruptive, in the Christensonian sense,â but if we take a step back and ask how useful those distinctions are, itâs actually quite hard to give a good answer. Maybe instead of quibbling over which successful upstarts are âactually disruptiveâ or not, we should adopt a more generalizable framework that explains why big companies tend to falter in these types of circumstances, and doesnât conflate a bunch of other related ideas.
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