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Disruptive vs. Incremental

An admittedly reductionist but helpful way of thinking about new company creation is disruptive vs. incremental innovation. The way you build each company is fundamentally different, but a lot of company building advice applies only to incremental innovation. Therefore, distinguishing between these two types is a useful exercise, as it helps inform whose advice you should listen to.

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As an entrepreneur, there is no right answer of which type of company to pursue initially, but the world would be a far better place if serial entrepreneurs pursued disruptive innovation after building financial and social capital.

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Disruptive

Alters the trajectory of human progress

Often market & technical risk

Often software and hardware

Uncharted territory: No or very few established playbooks

Zero to 1 improvement (10x gains)

Mission-driven

For humanity

Works backward from a concrete vision of the future

Differentiation as a feature; monopoly as the goal

Requires long-term, patient capital

Inspires others to do more

Legible to few in the beginning

Originated from first principles 

Tackles an unsolved, civilizational-level problem

Navigates unclear or evolving rules; may need to shape policy

Requires rare cross-disciplinary talent

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Incremental

Immaterial to human progress

Neither market or technical risk

Often hardware or software, but not both

Charted territory: Well-established playbooks to grow the company

N to 1 improvement (1x gains)

Mercenary-driven

For the individual

Rides the zeitgeist wave

Little differentiation and highly competitive

Attracts short-term, flighty capital

Inspires no one

Legible to most in the beginning

Built by analogy or derivation

Tackles a solved problem with diminishing returns to effort

Operates within established regulations

Fills conventional roles