Today we want to look at a body of work that is categorized under the general topic of sustaining versus disrupting technologies. This work has primarily been done in the area of product, new product design, new development, and sales. And a sustaining technology here is defined as one that enhances the characteristics of an existing product. It's an improvement and mainstream customers and markets really appreciate it, so that they continue to have loyalty to this product and to purchase it. What then is the disruptive technology? Again, from a product view, it's a technology that underperforms the current marketplace at first but a few fringe customers value the product. We can see the traces of the innovator's dilemma in this, where the new product at first isn't very interesting to mainstream customers, but to a few fringe customers. And by the time that the incumbent realizes that something is going on, it's too late to recover and the innovator has come in and captured not just fringe, but also mainstream customers as well. Now, if you go back to our earlier discussion, I like to associate sustaining technology with competence enhancing innovations and disruptive technologies with those that can be competence destroying. If you think about innovations that are competence enhancing, again we can use our example of iproducts because each generation of iPhone, iPod, iPad has been an incremental improvement that has appealed to customers. And, therefore, has been a very much a sustaining technology for Apple. For a little variety let's take a quiz now that anticipates what we willl be talking about in the rest of this video. [SOUND]. Well, what is the internet? Is the internet a sustaining or disruptive technology? So, does the internet sustain? Or does it? [INAUDIBLE] That's the question for today. First of all, as we've mentioned in the past, a lot of the technology based disruptions are not about products. They're about services or products and services. I think the other thing that we want to look at is something called second order and beyond impacts. So, an impact, it is the first order, is something you expect. A second order impact is one that you really didn't anticipate and sometimes there's a happy surprise or an unhappy surprise. The other interesting effect of the internet or characteristic of the internet is it's exponential growth. Coursera, in less than a year, had over two million people registered to take courses. That is phenomenal. Facebook has grown to about a billion users. Population of the world is a little under seven billion people. So, 1 7th of the world's population has has a page or is a user of Facebook. Now they're not all acting, but that's still an awful lot of people to have in one service. So, let's look at the incredible reach of the internet. At the United States, it looks like we're almost at 80% of the population using the internet. We don't know how long they use it. We don't know what they use it for. But again imagine 80% of the population using a phenomenon that's been around for maybe 20 years and compare that to say radio and television which have ubiquitous use in the United States. If you throw the world in here, again, the results are pretty impressive. So, we have, what does that look like on the graph? A little over 30% of the world's population using the internet. Here's some actual statistics on use. even Africa, which has had sparse communications capabilities, has 167 million users. Asia has a billion users. Europe, 500 million. North America where, of course, I'm located, has 273 million users. And if we go by country, well as you would expect, because the population is so large, we find China with 538 million users. We find United States second at 245, and India at 137 million, so on. And by the way in, in presenting this video I asked Siri on my iPhone what the world population was, and she replied that it's 6.8 billion people. So, about 35% of the world accesses the internet. And for the United States, she told me we have 309 million people, and our estimate of 79% from the graph is pretty accurate. About 79% of the U.S. population uses the internet. So, the implications of all of this is that the technology has incredible leverage to bring people together. A sustaining technology can reach a large proportion of the world's population, and the speed at which this disruptive technology moves magnifies its impact. A technology that is sustaining for one person may be disruptive for another. So, later on, we're going to look at the Arab spring and we'll see that certainly for the, the, the citizens in Egypt and Tunisia, the internet was a sustaining technology. It sustained their movement for the dictators who ran those countries and their associates, there was clearly a disruptive technology. So, to answer our earlier question, is the internet sustaining or is it disruptive? And the answer here is that it's clearly both. So, the take aways from this? Sustaining and thus, disruptive technologies go beyond product improvements and new products. They clearly extend to services, and even beyond services into social movements. This big penetration and large number of users make change happen fast. And it makes them more impactful than they have been in the past. So, we don't have a verdict that the Internet goes one way or the other, it is a phenomenon, it is a communications medium an information source, many different ways to describe it. And because it is so rich, there are many different ways in which it can be used.