Don't fall for the Time Horizon Fallacy

Steve Blank (of Business Model Canvas-fame) just published an article on Harvard Business Review titled “McKinsey’s Three Horizons Model Defined Innovation for Years. Here’s Why It No Longer Applies.” In the article, Steve makes the case that the innovation time horizons (the time it takes to develop a disruptive innovation) have shrunken so much, that McKinsey’s Three Horizons Model starts to fail us somewhat.

I think his analysis is flawed (not his conclusions – I wholeheartedly agree with those!).

In the first part of his analysis, Steve makes the argument that disruptors such as Tesla, Space X, Craigslist or Uber, and AirBnB have become the disruptive force they are effectively overnight. It is an argument you often hear – and one which is, in my eyes, mostly not true.

Steve Jobs once observed: “Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. It takes years.”

He is right. As we at radical Ventures show in our new “Knowledge Adoption Curve”-model, the vast amount of disruptive innovations take a long time to gestate. Tesla was not an overnight success (even if it might feel like one) but was incorporated 15 years ago. The (in)famous paper from Satoshi Nakamoto which outlined the workings of a blockchain was published in November 2008. I remember sitting in a meeting room with Garrett Camp in 2009 where he told me about Uber.

As we show in the Knowledge Adoption Curve, stuff takes time to mature – but once it hits, it hits hard and fast; which is the reason why we often make the mistake of believing these disruptions happened overnight.