build on existing technology and business models or introduce a change to an existing product or service. We call this middle part of the pyramid “adjacent innovation.”

The goal is not to win each time. The goal is not to miss the opportunity to win big at least once.

Missing even one great opportunity is a big loss.

The only good decision here is not to invest further and to write off your losses.

Of every twenty startups, usually only one will become a runaway success story, providing a 10X or even a 100X return to VC investors (see Figure 2).

Finally, at the top of this pyramid is disruptive innovation.

not from the inside but from the outside.

We believe that corporate leaders should view their portfolio of investments as containing three types of projects, which can be visualized as a pyramid (see Figure 3). The widest part, at the bottom, is a collection of core businesses.

engineers.”