What is disruptive innovation?

Disruptive innovation, Clayton Christensen’s theory, describes how simpler, cheaper products overtake incumbents: the entrant starts at the low end or in a new market segment incumbents ignore, improves faster than customer needs grow, and eventually satisfies the mainstream — at which point the incumbent’s advantages stop mattering. Incumbents rationally ignore the threat early because it serves their worst customers at worse margins.

The word is used far more loosely than the theory allows — most “disruption” is just competition. The practical lesson survives the dilution, in both directions: as an entrant, attack the segment your big rival is structurally unwilling to defend; as an incumbent, watch the cheap, “toy-like” alternatives your sales team laughs at.