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Today's WSJ has an article by Taylor Dinerman (registration required) on how two partner companies, US-based Space Adventures and Russian-based RSC Energia, are plan to provide $100 million sightseeing trips to the moon by 2009. The effort will leverage proven Russian rockets and space vehicles. The article contrasts this relatively low-cost, modular approach with the much more expensive, much more complicated NASA plans to return to the moon. Much like a different article describing how a small Pentagon office led an effort outside of normal acquisition channels to produce "good enough" satellites for military purposes (see my June 17 Innoblog post), the WSJ piece explicitly cites Clay Christensen and Disruptive Innovation theory. The Pentagon office used DI theory to guide its efforts, while Dinerman refers to DI to describe and explain this latest space tourism venture.

Challengers to the existing US government space program (including NASA, the military, and subsidies) are popping up everywhere, even inside the government. Burt Rutan's SpaceShipOne, the Pentagon's TacSat One, and the coming private moon trips may be part of an emerging wave of space ventures. These challengers all embrace--consciously or not--the principles of disruptive innovation. How should NASA respond?

It is probably too early to proclaim that NASA is doomed to be disrupted by innovators from below. The possibility no longer seems far-fetched, however. NASA would be well served to think through its mission and consider how it is going to cope with lower-cost challengers. These challengers provide limited, simple space services that NASA's leaders don't want to perform. If NASA wants to stay relevant, however, it would be unwise for the agency to only look to grander things while ceding these low-end space services to the private sector.

Disruptive Innovation theory tells us that space tourism is the kind of foothold market that challengers use to gain traction before moving up market to capture more and more of the available value. As space tourism companies march up market, they will perform more and more complicated tasks. Soon, the best rocket scientists may rather work for the Burt Rutans of the world, who may be doing the most interesting research and development, than for NASA, no matter the brilliance of that agency's past achievements.

Leafing through this weeks BusinessWeek with the disruptive hat on

Cell Phones for the Sandlot on page 20 Chris Carter has been tracking developments in the kid-focused handset market. It is interesting to see how different companies are going after the space. From a jobs-to-be-done perspective, neither the Firefly nor the TicTalk have it quite right. The Firefly seems to have approached it from a kids-job perspective (easy to use) while the TicTalk comes at it from a parents job perspective (easy to program). It sure would be good to have the best of both worlds

Dark Days at Daimler on page 31 The cover story. Remember what has happened with this merger the next type you see hype about how the next mega-merger is going to help company X + Y do something interesting.

Drugmakers are Changing Channels on page 44 One of my favorite sayings is I know half of my marketing budget is wasted. I just dont know which half. Believe it or not, pharmaceutical companies are discovering that spending huge amounts of money on consumer-direct advertising doesnt work. Thankfully, this might mean fewer Cialis, Viagra, etc. ads. If one of these companies could take 50 percent of the brain power they focus on coming up with clever but meaningless ads and think about the broader value chain issues that might inhibit consumption, they could find themselves with an interesting business on their hands. As a teaser, Clayton Christensens next Harvard Business Review article is going to take on brand-building. The last version I saw was titled Marketing Malpractice: Its Causes and Cures. Coming later this year.

Podcast: David vs. Goliath on page 47. An interesting thing is happening in the Podcast space. Existing giants are racing into the space. Once Apple incorporated Podcasts onto its iTunes platform, existing media companies realized that a Podcast could be a great way to increase the distribution of existing content. Emerging, fringe players seem to be getting pushed aside. As is always the case, where the individual will triumph is in doing the things the media giants arent interested in doing. Trying to out-Epert Epert just isnt going to do it.

From the Brink to the Big Leagues on page 60. Data storage giant EMC has set its sites on moving up market to compete more directly against IBM and Hewlett-Packard. Can it disrupt the goliaths? Or will it be swatted back down into its niche?

"The Right Stuff for GIs of the Future on page 74 Another article asking whether it really makes sense for the Army to be spending $125 billion for a system predicated on the assumption that future wars will be fought on open battlefields against conventional enemies. Hmmm seems to be some evidence against that assumption. Weve written about this issue before, a couple of times. Mastering the resource-allocation process is one of the biggest challenges facing companies encountering disruptive threats.

I've recently been toying around with the idea of picking up one of Ambient Device's orbs or beacons. The devices are undeniably cool. You plug it in, and within 15 minutes it picks up a wireless signal. It then tracks a piece of data, reflecting that data through color.

The first application was a seemingly obvious one: the stock market. Stocks are soaring through the roof? The device glows green. A market rout? The device glows red. Weather is another obvious application.

In researching the device, I stumbled across an interesting BusinessWeek article ("An Orb With a Galaxy of Uses"). Early adopters picked up the device because it is cool. But surprisingly, people are finding it to useful in unanticipated ways. A hospital administrator uses it to track the number of people in his facility. If the color changes, he knows he needs to pay closer attention. Blockbuster is interested in potentially using the device to remind customers when they need to return their movies.

Once you think about it, there are seemingly limitless applications for so-called "glanceable" data. In today's world, we're overwhelmed by information. Solutions that make it easier to understand when something important is happening can help separate the signal from the noise. All that, and it looks great on your desk!

Of course, the BusinessWeek article correctly notes that there is a general lesson in this. When there is a new technological invention, the market-winning application for that invention is often unknown and unknowable (this is discussed in detail in Chapter 8 of The Innovator's Solution). We believe the disruptive principles can help guide that journey, but ultimately sometimes the only way to know is to know. What's great is that Ambient Devices threw its product onto the marketplace and has learned from its customers in ways that allow it to optimize its service.

A reader passed on a recent NYT story discussing how the cable companies are beginning to compete for business customers ("Not Just TV, Cable Competes for the Office Domain"). For a long time, it was difficult for cable companies to effectively serve business customers. For one thing, their coaxial cables didn't pass by many office locations. Even worse, their best offering (video) wasn't exactly what business customers needed.

Technological innovations have altered the landscape. Businesses now of course are looking for the high-speed data connections that cable companies provide. Even better from a cable company's perspective (and worse from a phone company's perspective), VoIP solutions allow cable companies to offer solid voice services at reasonable prices.

One of the big questions for the cable companies will continue to be how they pick their fight with the phone companies. All of the signs in the marketplace continue to suggest a full-on assault on the core business of the phone companies. Cable companies have a compelling offering with the ability to combine voice, video and data on a single bill. Now that they've moved away from offering circuit-switched solutions to IP-based solutions, they can actually create a compelling and reasonably priced combined offering that doesn't hide under the smoke screen of marketing bundles. From a disruptive perspective, the problem of course is that they are going after markets that established incumbents will hate to lose. In response, phone companies are continuing to work to improve their video offerings and partner with satellite providers so they too can go after the cable companies core business.

All of this suggests that the intensifying competition is going to end up bruising both the video business and the phone business (we discussed this in Chapter 10 of Seeing What's Next). I'm still waiting for someone to break free of the obvious no-holds-barred, head-to-head competition and find a disruptive path. If not, I'd bet we're going to see more consolidation over the next couple of years. One of the cable companies might pick up Vonage. Then a cable company and a phone company will merge. None of this will help the goliaths fight back against disruptors such as Skype and emerging IPTV providers. It will be interesting to continue to watch how this unfolds.

A few weeks ago, I mentioned the Firefly phone and asked whether it would be considered a sustaining or a disruptive innovation. While it had some characteristics of a disruptive innovation - a simple product that enables a new set of customers to use the product - my analysis suggested it was more of a sustaining innovation. If the innovation is not disruptive to all major incumbents, it is probably not disruptive. More and more evidence seems to be backing my thinking.

The latest entrant into the market is Leapfrog - the manufacturer of the LeapPad, which if you have young kids, you know well. Very similar to the Firefly - and since it's Leapfrog, it will also play educational games. Clearly a number of companies feel the market for cell phones for young kids is attractive. Time will tell if they are right. One thing is for sure - if it turns out to be a good market, it is only a matter of time before the big cell phone manufacturers jump into the fray.

A colleague pointed out an article in The Boston Globe ("Like Coke machine for DVDs") describing a new way to rent DVDs. The service is provided by a company called Redbox, which is a subsidiary of McDonald's. The concept is simple. Go to a kiosk, swipe your credit card, and receive a DVD. You don't have to be a member and are charged a dollar a day for each day you have the DVD. You can return the DVD to any Redbox kiosk.

Color me a bit skeptical about the viability of this approach. What are the potential benefits? Ultimately more convenience because kiosks might be everywhere (of course, having a DVD arrive in the mail is pretty darn convenient as well, but you have to pay monthly fees for that convenience). Lower prices, although if you keep a movie for a couple of days prices can add up. The downside? A limited selection of movies, and no guarantee that the kiosk you spot will have the movie you want.

To me, it just feels like Netflix can get the movie rental job done better than Redbox can.
Sure, there are some nice applications. If you are a business traveler, you could pick up a movie in your home city, watch it on the plane and drop it off when you stop by McDonald's to get breakfast. But it seems like the company's claim that it is "paradigm-shifting, business model crushing" might be a bit much.

Thoughts?