E Ink

E Ink Case Study:
Concessions of a Disruptive Technology
Tuesday, August 3, 2010

Prepared By
Brian Coate coate.b@husky.neu.edu John Coogan coogan.j@husky.neu.edu Francis Piccirillo piccirillo.f@husky.neu.edu Matthew Wallace wallace.mat@husky.neu.edu

E Ink Case Study Concessions of a Disruptive Technology
BY BRIAN COATE, JOHN COOGAN, FRANCIS PICCIRILLO AND MATTHEW WALLACE

I

In theBeginning:
n 1997, Joe Jacobson founded the E Ink Corporation in Cambridge, Massachusetts. Although the business was years away from profitability and success, it attracted significant media attention and financial backing because of its potentially revolutionary idea, “a hardcover book that had hundreds of paper-thin pages in it. Only electrophoretic display technology, which

You could takeit off the shelf, open it, and read King Lear, for instance. You could close it, press a button, open it up again, and you’d be reading quantum physics.” 1 forms visible images by rearranging charged pigment particles using an applied electric field, would make this seemingly impossible device a possibility. Many obstacles stood in the path of E Ink and as a result, the executive team made severalconcessions to mitigate uncertainty and stabilize their financial situation.

Innovation Classification:
With the ultimate goal of “killing paper”, E Ink was clearly attempting to enter the display market as a disruptive technology. This statement can be retroactively reassessed using recent history, but as the Harvard “Radio Paper,” as it Business School case, E Ink shows, in 1999, thecompany’s goal was to disrupt the traditional market for books by introducing a revolutionary method of obtaining and consuming written text. was called by the early E Ink creators, would “replace all forms of paper-based communication.” 2 Nearly all forms of innovation fall under two broad categories, sustaining and disruptive. classify sustaining innovations either as discontinuous or evolutionary.the different types of innovation, revolves around the automobile industry. gasoline engines. One can further

An apt analogy, which helps explain A minor, or evolutionary, innovation The automo-

would be that of fuel injection, which replaced carburetors as the predominant method used to meter fuel on A much bigger innovation, while still sustaining, was that of the automobile. bile created anew market by allowing customers to solve a problem (transportation) in a radically new way (using a mechanical engine as opposed to animals). Although the automobile was a transformational innova-

1 2

(Archambault, 2000, p. 1) (Archambault, 2000, p. 4)

E Ink Case Study
tion, it was not a disruptive innovation, because early automobiles were expensive luxury items that did not disruptthe market for horse-drawn vehicles. However, they did transform the transportation industry along an important technological vector. The market for transportation essentially remained intact until the debut of the lower priced Ford Model T in 1908 by making higher speed, motorized transportation available to the masses. 3 Just as the Model T was a disruptive technology that revolutionizedtransportation, radio paper similarly targeted revolutionizing paper-based communication.

E Ink’s Business Model:
Business models are inherently difficult to define precisely. to accommodate the market dynamics of the time. forecasts. This is due to the fact that not only are there a multitude of viable options for startups to use, but often, these models are constantly evolving and changing Unplannedsuccesses and failures can necessitate dramatic alterations of a previously sound business model and force a young company to restructure its goals and While many business analysts have posited methods for defining a business model, we have found that Taz Pirmohamed provided the most succinct definition in his Note on Business Model Analysis for

the Entrepreneur: “A business model is defined...