Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution

by Geoffrey A. Moore

The Darwinian struggle of business keeps getting more brutal as competitive advantage gaps get narrower and narrower. Anything you invent today will soon be copied by someone else—probably better and cheaper.

Many companies thrive during the early stages of their life cycle, only to fall slack during periods of inertia and die out while others surge ahead. But as Geoffrey Moore shows, some notable companies have figured out how to deal with Darwin in their mature years—making changes on the fly while fending off challenges from every quarter.

Genres: Business, Entrepreneurship, Management, Nonfiction, Leadership, Technology, Buisness

304 pages, Hardcover

First published December 29, 2005

About the author

Geoffrey Moore is an author, speaker, and advisor who splits his consulting time between start-up companies in the Mohr Davidow portfolio and established high-tech enterprises, most recently including Salesforce, Microsoft, Intel, Box, Aruba, Cognizant, and Rackspace.

Moore’s life’s work has focused on the market dynamics surrounding disruptive innovations. His first book, Crossing the Chasm, focuses on the challenges start-up companies face transitioning from early adopting to mainstream customers. It has sold more than a million copies, and its third edition has been revised such that the majority of its examples and case studies reference companies come to prominence from the past decade. Moore’s most recent work, Escape Velocity, addresses the challenge large enterprises face when they seek to add a new line of business to their established portfolio. It has been the basis of much of his recent consulting.

Irish by heritage, Moore has yet to meet a microphone he didn’t like and gives between 50 and 80 speeches a year. One theme that has received a lot of attention recently is the transition in enterprise IT investment focus from Systems of Record to Systems of Engagement. This is driving the deployment of a new cloud infrastructure to complement the legacy client-server stack, creating massive markets for a next generation of tech industry leaders.

Moore has a bachelors in American literature from Stanford University and a PhD in English literature from the University of Washington. After teaching English for four years at Olivet College, he came back to the Bay Area with his wife and family and began a career in high tech as a training specialist. Over time he transitioned first into sales and then into marketing, finally finding his niche in marketing consulting, working first at Regis McKenna Inc, then with the three firms he helped found: The Chasm Group, Chasm Institute, and TCG Advisors. Today he is chairman emeritus of all three.

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Reviews

[Gitte · Rating 3 out of 5]

It was not a bad book in handling the topic it did (I think). But let’s be honest, I read it for my study. And it confirmed for me once again that I am not a non-fiction gal. Glad I finished it so I can get back to reading my fiction books.

[Eleanor · Rating 1 out of 5]

This could have been an email

[Sara · Rating 1 out of 5]

Read it for work because I had already read some of the other choices (Checklist Manifesto, Your Brain at Work) and found it very dull. Lots of boring categorization that was not relevant to my life or my work.

[Adriaan Jansen · Rating 3 out of 5]

I decided to read ''Dealing with Darwin'' because Eric Ries spoke highly of it. I had really enjoyed Ries' book ''The Lean Start-up''. It was a surprise for me that, unlike Ries, Geoffrey Moore focuses in ''Dealing with Darwin'' more on mature companies than on start-ups. As Moore mentions at the beginning of chapter 3, the purpose of his book is to analyse the best practises for innovation in mature companies.

For me, he main lesson from ''Dealing with Darwin'' is that different types of innovation are appropriate for different phases of the product life cycle.

When selecting an innovation strategy, you should focus only on those types of innovations that go well with the phase of the life cycle in which your ''category'' (a term apparently used by customers to classify what they are buying and distinguish it from other purchasing choices) finds itself. Choosing a type of innovation that doesn't correspond to the phase of the life cycle your product / service / company is in will usually not result in any significant rewards.

Moore starts out by describing the LIFE CYCLE OF A CATEGORY. This consists of 5 phases:
1. ADOPTION OF TECHONOLOGY
2. GROWTH MARKET
3. MATURE MARKET
4. MARKET IN DECLINE
5. END OF LIFE CYCLE
Obviously this category life cycle is very similar to the usual product life cycle. One important difference, perhaps, is that Moore argues that the first phase, Adoption of Technology, has its own life cycle.

Moore's TECHNOLOGY-ADOPTION LIFE CYCLE has the the following phases:
1. EARLY MARKET (Mercado Temprano)
2. CHASM (Abismo)
3. BOWLING ALLEY (Bolera)
4. TORNADO
5. MAIN STREET (Calle Mayor)
In chapter 2, Moore summarizes his observations from previous books about the technology-adoption life cycle. The basic idea is as follows:
- When a disruptive innovation manifests itself, initially only early-adopters, such as technology enthusiasts and visionaries, are interested. These early adopters form the Early Market, which is only a small part of the total market.
- In order to become appealing to the pragmatists in the general market, the new product (or service) has to cross a Chasm, which separates the early adopters from the main market. The best way to cross the chasm is for the new product or service to become appealing to a particular niche of pragmatists.
- Once the pragmatists in that one niche have been convinced, nearby niches will take notice and also start adopting the new product. This is a phase of contagion, which Moore calls the Bowling Alley.
- This process speeds up and all of a sudden the new product becomes appealing to the entire market of pragmatists. They all rush in to buy a new product, a sweet moment for producers, which Moore calls the Tornado.
- Once most of the pragmatists have acquired the product and the hyper-growth of the Tornado phase is over, the category enters a more sedate phase called Main Street, where repeat purchases by pragmatists and purchases by conservative customers determine profitability.

Moore's framework of the technology-adoption life cycle is useful, but has 2 problems. The first is that Moore seems to assume that this framework is universally applicable, a mistake that many writers of business books make when they present a new framework they have come up with. Some new disruptive technologies may take off immediately, without any need to cross a Chasm by focussing on a niche of pragmatist consumers, but instead taking the entire market by storm immediately. The iPhone comes to mind as an example.

Second, Moore has difficulty integrating his framework for the technology-adoption life cycle into the general category life cycle. I would say that what Moore calls the Tornado phase more or less corresponds with the Growth Market. The end of the Tornado / Growth Market is marked by a new phase, the Main Street, which is the onset of the Mature Market.

However, this is not how Moore describes it in chapter 2. There he states that after the Main Street starts the Growth Market, and his description of why that Growth Market takes place after the Main Street feels forced.

Later, at the beginning of chapter 6, Moore seems to follow my suggestion that the Main Street is the onset of the Mature Market. There he writes that once the wave of adoption has stopped and most new customers have been acquired, the growth rates drop dramatically and market stabilizes. He continues by saying that compared to the Growth Markets, profitability is lower in absolute terms… welcome to the Main Street.

By describing the integration of his technology-adaptation life cycle into the general category life cycle in one way in chapter 2 and implying a different integration between the 2 models in chapter 6, Moore is not contributing to the clarity of how to link the 2 frameworks together. Arguably not a big deal, but a lack of coherence like this does limit the fluidity with which you can go through the book.

Next, Moore makes a distinction between 2 types of company architecture:
1. COMPLEX SYSTEMS: A model used by companies that deal with complex problems and offer customized solutions with specialized consulting to their clients. Sales usually takes place by personal contact.
2. VOLUME OPERATIONS: A model used by companies that serve volume markets with standardized products. Sales usually takes place through impersonal distribution channels.

Moore argues that these 2 different types of company architecture require different approaches to innovation, and that is not advisable to interchange best practises for innovation between these to company structures.

One more set of definitions: The CORE of your company is a set of activities or processes that generate differentiation. The CONTEXT is everything else that your company does. Work in the Context is useful, but doesn't distinguish your company in the eyes of the customer. Since differentiation is what allows us to survive in a competitive environment, the trick is to remove resources from the Context and reassign them to the Core (The last 2 chapters of the book will explain how to do this).

After laying out this groundwork, Moore explains that there are 14 different types of innovation for the different phases of the category life cycle. He divides these different types of innovation into 4 groups:

1. PRODUCT LEADERSHIP. The innovations in this group are appropriate for the early phases in the category life cycle, the Adoption of Technology and the Growth Market. The 4 types of innovation in the Product Leadership group are as follows:
- DISRUPTIVE INNOVATION: A new product in a new market. Useful in the Early Market
- APPLICATION INNOVATION: Existing product in a new market: Useful for crossing the Chasm and entering the Bowling Alley.
- PRODUCT INNOVATION: New or dramatically enhanced product for an existing market. Useful for the Tornado.
- PLATOFORM INNOVATION: Existing product in existing market. Useful for the Growth Market.
As an example of how a certain type of innovation is to be applied differently in complex systems and volume operations, Moore argues that disruptive innovation in complex systems should focus on disruptive technology, whereas in volume operations the focus should be on disruptive business models.

2. COSTUMER INTIMACY. The 4 types of innovation for customer intimacy are most useful in Mature Markets.
- LINE EXTENSION INNOVATION. Often used to expand and explore new markets adjacent to the existing market.
- IMPROVEMENT INNOVATION. Often used to obtain higher margins from purchases by existing customers.
- MARKETING INNOVATION.
- INNOVATION OF CUSTOMER EXPERIENCE
Note that the 4 types of innovation in the customer intimacy group gradually shift focus from product features to customer perception.

3. OPERATIONAL EXCELLENCE. Like the Customer Intimacy group, the 4 types of innovation in the Operational Excellence group are most appropriate for the Mature Markets. In fact, innovations from both these groups can be applied at the same time: You can add value at the surface with innovations from the Customer Intimacy group while simultaneously improving operations and reducing costs with innovations from the Operational Excellence group.
- COST OPTIMIZATION INNOVATION. Most common procedure: Replace expensive, patented components by cheap, generic alternatives.
- INTEGRATION INNOVATION. Bundle several components in one product.
- PROCESS INNOVATION.
- VALUE MIGRATION INNOVATION. An example: HP used to sell printers for profit and make some money on ink. This has changed: Now the printers are sold at or close to cost, and the real money is made on the ink cartridges.

4. RENOVATION OF CATEGORY. There are just 2 types of innovation in this group, both of which have to do with repositioning a company by moving it from a Market in Decline to a new Growth Market. This can be done in two ways:
- ORGANIC RENOVATION. Examples are Intel that made a shift from memory to processors in 1980s, and Nokia that made shift from a random conglomerate to mobile phone producer in the 1990s
- RENOVATION THROUGH ACQUISITION.

After thus explaining that each phase of the category life cycle requires different forms of innovation, Moore uses the last 2 chapters to give a framework for how to remove resources from the Context and assign them to the Core (Remember that the Core is everything that differentiates you, and the Context is the rest).

This framework for reassigning resources from the Context to the Core is based on a 2x2 matrix, where activities of the company are plotted along 2 dimensions: Core - Context and Mission critical - Non mission critical. A product (or a category) progresses through this matrix as follows:
1. Core + Non mission critical: Here new, differentiating products are developed and tested
2. Core + Mission critical: The new innovation has proven itself in the test phase and is now rolled out to the mass market.
3. Mission critical + Context: Eventually, the new product will become mainstream and turn into a commodity. It is still vital for the profitability of the company, hence it is still mission critical.
4. Non mission critical + Context: By gradually reducing risk and complexity, the commodity product can become non mission critical. This can be achieved by the following series of steps:
- Centralize
- Standardize
- Modularize
- Optimize and automate
- Outsource: Outsource those activities that are almost free of risk.
Once those non mission critical contexts activities have been outsourced, the resources that have been freed up, can be reassigned to the Core activities of the company.

The way employees can be reassigned follows the opposite direction of how a product flows through the matrix:
1. Non mission critical + Context employees have experience in dealing with context, and, after modest training, should be able to replace those employees that handle mission critical context
2. Mission critical + Context employees know how to handle mission critical activities. With some re-schooling, they could also be able handle core mission critical activities and thus they can replace those that are working in the core mission critical area
3. Core + Mission critical employees are now freed up to return to the Core + Non mission critical area.

Moore offers several useful frameworks, interesting examples and great recommendations. However, I do have some objections to this book:
- As mentioned, Moore seems to imply that his frameworks are universally applicable. Without doubt, they are useful in several circumstances, but perhaps not always.
- Also as mentioned, Moore's integration of the life cycle models creates confusion.
- Sometimes Moore gives advise that I don't agree with. E.g: At the end of the first chapter, Moore seems to imply that you should only try to catch up with the first mover, and not try to supersede him (Moore states: Trying to be best of class, when we haven't been the first to enter the market, will not generate profits proportionate to the required investment). I think there are plenty of examples of ''fast seconds'' that have removed first movers from the market.
- Moore occasionally contradicts himself. When talking about platform innovation in chapter 5, he mentions that it rejuvenates stagnant markets, whereas at the beginning of chapter 4 he indicates that platform innovation is appropriate for growth markets. Shortly after that, he remarks that platform innovation best starts from zero, before the first product has launched, and he proceeds to give the example of Netscape. But do starting from zero and giving Netscape as an example not imply disruptive innovation instead of platform innovation?
- Many of the short business cases are so short that they hardly give relevant insights. Also, some examples are ambiguous. E.g. Are newer versions of the Boeing 737 product line extensions, as Moore claims, or product improvements? Allow me a comparison: Is the iPhone 6 a product line extension from the iPhone 5 or a product improvement?

My conclusion: A useful book, with room for improvement.

Note: I read the Spanish translation, which I thought was terrible.

[Diego · Rating 5 out of 5]

This is the second time I've read this book, and I absolutely love it. It’s a book to revisit often because it clearly explains how to manage a company, and the strategies can even be applied to one’s personal life. It goes through all the stages that a company experiences and shows you the same problems you encounter daily, but from a different perspective. Not only that, but it also helps you. It helps refocus how you view things, cutting unnecessary efforts during product or business development. One particularly interesting aspect is the reallocation of resources and management. It helps to understand where resources are getting stuck and, most importantly, why that happens. The forces that come into play at each stage are explained, and it highlights how mindsets shift depending on the stage of the product. Additionally, it helps refocus efforts in managing a business. Many managers or business leaders don’t handle this management aspect well, which often leads to failures in companies or processes. The book leads you to understand, from a logical standpoint, how a product or business develops. Many business courses fall short in their approach, and I believe Geoffrey Moore's book is quite spot-on. If considered in business courses, it could greatly help in understanding the forces at play. This is one of the best business books, and I highly recommend it as mandatory reading. I haven't read his previous book "Crossing the Chasm", but I will read it to gain a deeper understanding, as his perspective is quite clear. Highly recommended book.

[Aaron Mikulsky · Rating 3 out of 5]

Just ok. Moore's books seem redundant to me. He discusses how business is becoming increasingly competitive — globalization, deregulation and commoditization have taken their toll everywhere you look. Companies are forced to innovate or fold; it’s a constant pressure that goes beyond mere competition — it’s about survival. Who will the survivors be? They will be the ones that win the scarce resources of customer purchases; the ones that gain customer preference because of their innovation; the ones creating next-generation offers and raising the bar for the future. It’s evolution in every sense of the word. Survival of the fittest. Dealing with Darwin. Moore proclaims innovation is not an optional “nice-to-have” in business — to innovate forever is a design specification. It’s no longer a strategy; it’s a requirement. Moore shows his framework - the category-maturity life cycle. The model comprises five phases: (A) New Category Initiation, (B) Growth Market, (C) Mature Market, (D) Declining Market, and (E) End of Life. He also goes into his Technology-Adoption Life Cycle:

Moore borrows the Types of Innovation from the book The Discipline of Market Leaders. The innovation types fall into these four clusters or innovation zones:
1. Product Leadership Zone.
2. Customer Intimacy Zone.
3. Operational Excellence Zone.
4. Category Renewal Zone.

[Todd Cheng · Rating 3 out of 5]

As I nerd working in IT this book takes one down 30 years of technology rises, falls, and competitions. That was nice. It was interesting revisiting the names of companies and how they fit in the larger economy of business.

The hypothesis of the book is that there are two architectures in modern IT business that will make much of a companies revenue. These are volume and complex systems. Volume makes with minimum customization and easy off the shelf use. The other may not make the money as it takes much customization and has a much smaller volume, but that is where the future is as it helps detect the future volume system.

The book also revisits that a multimodel or cross-model approach is not always beneficial such that when one manager from one specialty tries to apply their skills to the other specialty.

I enjoy the book and the possible new framework in thinking about IT business models.

[Matias Alanko · Rating 4 out of 5]

This ranks among the best business books I have read. Many actionable concepts for an investor, but at least from my point of view not-so-much for managers. My only gripe with the book were the many references to competitive advantages that can be gained or lost through innovation. A true and lasting competitive advantage is not something that can be easily innovated away, and even less is it a simple new feature or a new product line, to give two examples.

[Michele · Rating 4 out of 5]

This does a great job of expanding on the technology adoption lifecycle. Speaks specifically about what types of innovation are appropriate at different stages of the innovation cycle. Does a good job of linking innovation stages with appropriate marketing tactics.

[coolwind · Rating 3 out of 5]

Not as deep as “crossing the chasm”. The practical thoughts on various types of innovations can be helpful.

[Brian · Rating 2 out of 5]

Blah

[Bernadette Elliott-Bowman · Rating 2 out of 5]

I read Crossing the Chasm and thought it was decent enough, but this one was just boring. Dragged myself through it for work.

[Bojan Avramovic · Rating 2 out of 5]

Ideja s kojom je pisana knjiga i tema koja je obradjivana su odlicne, ali nacin i stil pisanja su katastrofa. Niti sam sta naucio niti saznao

[Jordan · Rating 3 out of 5]

A decent overview of a process that pretends to be exhaustive and overly insightful. This book is one that you might pick up for a look into how company’s innovate. This book won’t tell you that but it will talk about the innovation process and come up with an “acceptable” framework for classifying.

This would be a good foundation for those focused on innovation at a very fundamental level. It’s just such a boring book that it’d be hard to recommend for a beginner into the world of business books.

Overall, this book covers a lot of the innovation happening in its present day but it doesn’t really give us anything insightful off that. Which makes this a good read to brush up on a topic but a terrible book to try and plod your way through.

[Craig Dube · Rating 2 out of 5]

After two months of slogging through this book, I've decide to call it quits with some 30% left. I would have thought that a book on business strategy and innovation would have kept my interest, but perhaps I'm not as high-minded as I hoped. I thought the author did a great job distinguishing between the challenges of Volume Operations Model and a Complex Operations Model. I also found it useful to read the author's discussions on the different type of innovations and his examples of companies that achieved success with those innovations were of great help. However, the author elected to distinguish innovation to a degree that became too fine for my liking (ex. value-migration innovation vs. value-engineering innovation). I don't doubt that there are important distinctions to be made here, and those distinctions can have a strong influence on the type of action one takes but I did realize that I didn't much care. I found myself reading this book, trying to figure out where the company I work for and the products I work on fit in; and if if the innovation type didn't seem to match up, I tuned out.

Lastly, I didn't care for the case study about Cisco. Being familiar with the industry, I thought it would be of interest, but I found myself skimming through and skipping over much of it. I would have much preferred separate, smaller case studies with a wider variety of companies.

[Jimmy · Rating 4 out of 5]

As I read this book in detail, not that bad, some sparking ideas and new perspectives, though too repetitive and some items look like baseless fillers. Regarding Lego as Integration Innovation? Come on, are you kidding me? Hard to describe in detail but looks like the theory is just having too many assumptions and having a better form than substance. However, a new perspective is always a valuable complement.

Nonetheless, the readability has been improved a thousand times comparing with Inside the Tornado, which is one of the worst I have read.

---

As expected, Moore still obtains the awful writing style.

He is good at making up confusing concepts but those concepts are just not much useful and lack of foundation. This system is so complicated that it's almost impossible to put into practice. If the system itself is perfect, then it may be acceptable, however, it's so flawed that it can only serve as complement, while such complexity makes it impossible to integrate with others.

This is just not as good as Porter in terms of this.

[Greg · Rating 4 out of 5]

This is probably Geoffrey Moore's best book. Although he is a bit of a one-trick-pony. Everything boils down to the technology adoption life cycle from his first book. He puts innovation strategies on the life cycle continuum in order to help firms figure out the appropriate strategy. They are further broken down by business architecture: volume operations or complex-systems vendors. The eye-opening thing for me was the idea that when you need to cycle workers from cash-cow products or systems onto new projects, you move them from EOL'ed systems, not onto R&D, but instead onto other non-core, mission critical apps, which appears counter intuitive at first.

[Leader Summaries · Rating 5 out of 5]

Desde Leader Summaries recomendamos la lectura del libro El desafío de Darwin, de Geoffrey A. Moore.
Las personas interesadas en las siguientes temáticas lo encontrarán práctico y útil: innovación, innovación, desarrollo y cambio, estrategia y modelos de negocio.
En el siguiente enlace tienes el resumen del libro El desafío de Darwin, 14 estrategias de innovación empresarial para triunfar en el mercado: El desafío de Darwin

[Michele McCawley · Rating 1 out of 5]

Dry and horribly dated (at this writing, it is 18 years old, so many of the examples feature companies that either don't exist or aren't in the same lines of business anymore). I don't know why business writing has to be so boring and jargon-y. I have an MBA and I can't wring much of anything interesting out of this book.

[Meg · Rating 2 out of 5]

While the message here is useful, it's conveyed with so much jargon that I skimmed large swaths of it. Read the headings, review the diagrams, and make note of the basic process steps --- don't bother trying to read it line by line.

[Marcin · Rating 4 out of 5]

This is a really refreshing and surprisingly comprehensive view of innovation in organisations. Personally I found part I + III to be sufficiently compelling as it almost immediately brings images of large organisations I participated in suffocate through inertia.

[Phil Fox · Rating 4 out of 5]

An extremely visual exploration of corporate culture and how it must be handled concerning both inertia and innovation.

[Jennifer · Rating 5 out of 5]

Must read for any entrepreneur.

[Juan Baez · Rating 3 out of 5]

I actually didn't finish this book. go first with crossing the chasm and then if you are really into it go with this book.

[Nic Brisbourne · Rating 2 out of 5]

Moore has great insight. This book about innovation inside large corporates was a bit outside my interest area.

[Marek · Rating 3 out of 5]

First and foremost the last part (managing inertia) contains interesting insights, but the main part (managing innovation, about 50% of the book) was deadly boring reading.

[Lori Grant · Rating 4 out of 5]

A should-read book on innovation for knowledge workers and entrepreneurs.

[Rajat · Rating 4 out of 5]

Great business book, must read.

[Maryanne]

Not marking as done this year since I don't want it to count toward my reading challenge. Read a page or two per chapter... Not amazed.

[Simon King]

brilliant book - clear message on focus, good ideas on modes of innovation

intersects well with the ideas in
https://www.amazon.com/Marketing-Play...