David and Goliath… A Story Of Disruptive Innovation

August 12, 2011

Issac Shi is the CTO and Chief Software Architect for Prognosis Health Information Systems, a portfolio company located in Houston that I work with.

Isaac wrote a blog that I wanted to share with you below. I hope you and your management team enjoy it as much as I did.

August 11th, 2011.  “Without a Sword in His Hand” — How King David Used Disruptive Innovation to Kill the Goliath

 By Isaac Shi – CTO and Chief Software Architect at Prognosis Health Information Systems

Goliath is an incumbent company, no doubt he is a giant, he has muscle and sword (product depth), well fed (high profit margin), and lots of followers (market share). His technology is sword and shield, his strength is brick and mortar.

David knew he couldn’t beat the Philistine if he was to play the rules defined by the enemy; the only way to defeat the Goliath was through his Disruptive Innovation: a precision missile system — Slingshot.

Goliath wasn’t agile enough to deal with disruptive technology; he could not move fast enough to dodge the incoming stone. His downward immobility met David’s upward mobility. The giant came tumbling down.

The Book of Samuel said “without a sword in the hand, David struck down the Philistine”. The end of the story is David pulled Goliath’s own sword and cut his head off.

There are two types of innovations:  Sustaining Innovation (better & sharper sword) and Disruptive Innovation (Slingshot). Goliath was in fact good at sustaining innovation; he sharpened his sword every day, he worked out every day like Conan the Barbarian. Incumbent companies actually are doing well with this type of incremental innovation, but they often miss out on the disruptive one, the one that will change the rules of the game forever.

An entrant company must arm themselves with a disruptive business model with disruptive innovations in order to dethrone the incumbent giant rather than exhaust limited resources to match the incumbent’s every move.

You need to re-define the rules of engagement in a way that favors your own strength, to slay the goliath without a sword in your hand.

Venture Partner

<strong>George Roberts</strong> is a Venture Partner at OpenView. He enjoys partnering with companies and helping them achieve their goals through strategy, focus and operational execution. From 1990 to 2003, George spent 13 years at Oracle Corporation, most recently having served as Executive Vice President of North American Sales. While at Oracle, George was responsible for over $1 billion in revenue and more than 2,000 employees, reporting directly to the company’s CEO and Chairman, Larry Ellison.