Does Virtual Prototyping Kill the Potential for Disruptive Innovation?

Abstract

A critical element of a corporate entrepreneur’s opportunity evaluation process will involve the attempt to understand customer requirements in order to calculate commercial demand. Traditional opportunity evaluation processes are less effective in the face of potentially disruptive innovations, as customers lack understanding and are unable to articulate their needs. Physical prototyping emerged as a method to test novel concepts in both familiar and unfamiliar markets; today, virtual prototyping is fast growing into this role in favour of the slower and more expensive production of physical models.
Yet, anecdotal evidence suggests that virtual prototyping systems compromise the valuation of opportunities with disruptive potential. We address the need for empirical analysis with an experimental design in which we evaluate customer reactions to a potentially disruptive innovation in the mobile telecommunications sector. Our findings contribute evidence to suggest virtual prototypes are significantly less effective than physical prototypes at eliciting a deep customer understanding of potentially disruptive innovations. This work has repercussions for theory and for corporate entrepreneurs tasked with driving the disruptive potential of their firms.