Clay Christensen Speaks at Technology Alliance on Disruptive Innovations in Education, Health, VC

5/18/10Follow @gthuang

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skilled,” he says. “Healthcare is expensive because almost everything you do has to be done by very skilled people. Because lives are on the line, you can’t release buggy software. More than other industries, healthcare is particularly prone to ‘sustaining’ [non-disruptive] innovation. That’s why there are these monopolies; only a few pharmaceutical firms, only a few [medical] device firms. They’re better at sustaining innovation. Startups need to help the less skilled. The shortest way to disrupt healthcare is to pick off a piece of the hospital—something a nurse practitioner can do instead of a cardiologist [for example].”

Other emerging areas are prosthetics, which Thurston says is disrupting some surgeons’ practices because new prosthetic limbs take a lot less skill to attach; and drug repurposing, whereby a company will take an old drug and find new applications for it, which is much cheaper than developing a drug from scratch. An example of that is cyclobenzaprine (Flexeril), originally designed as a muscle relaxant, being used to treat insomnia.

In education, Thurston says, “Disruptive innovation tends to start at the periphery of the market, not in the center…Where you’re seeing disruption in education is not with the core curriculum, but a few students interested [in fringe courses like Russian]. There’s an awful lot of people and interests, more of those than the base curriculum, collectively. So people are adopting computer-based learning in trade schools, for instance…One Laptop Per Child, that’s fine, but the most prevalent computing technology in the classroom is the cell phone, and that’s growing by leaps and bounds. Some day kids will show up with their little tablet [computer].”

As for Christensen’s comments on VC and early-stage startups, Thurston advises, “You often want to look at the periphery for good deals. For entrepreneurs, you should be looking for your go-to-market at the periphery. But to not go for the big market is a horrifying thing for an investor and an entrepreneur…You start in the periphery and go towards the mainstream. But if you start in the mainstream, you’re dead.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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