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New Oriental Education & Technology Group

Call New Oriental the Kaplan of China. Specializing in test preparation, this for-profit cram academy for children and high-school students started out offering classes in English and other languages but has moved into general education and is now expanding rapidly, opening campuses in the second- and third-tier cities where much of China’s population lives—places like Xiangfan and Urumqi. New Oriental, in the Christensens’ view, is creating new markets where none existed before. Although it hasn’t opened a for-profit university in the socialist nation, that could be next in the business plan.

NxStage Medical

People with kidney failure visit dialysis centers to have their blood cleaned—a trip that can expose them to infections, which is especially dangerous if they are very ill. Why not bring the machine to the patient? NxStage created a portable dialysis machine that can fit behind a bed in an intensive-care unit or be used at home. While the device isn’t as good as state-of-the-art dialysis machines, it may have advantages beyond portability: a personal dialysis machine lets patients clean their blood more often, potentially helping them stay healthier. True, far larger competitors such as Fresenius have introduced their own portable dialysis units. But NxStage could have the advantage of focus. “In a classic innovator’s-dilemma fashion, it’s just very hard for any organization to sell to the high end and to the retail market,” says Christensen. “People say ‘The big guys could crush this company.’ But we’ve found that almost never happens.”


Salesforce.com

Salesforce pioneered the idea of supplying business software cheaply through a Web browser, an idea known today as cloud computing. Previously, enterprise software, such as tools for managing sales, had come on discs and was frequently installed and customized by consultants charging huge fees. As business quickly shift to cloud-based software, Salesforce’s stock price has skyrocketed. Is it too expensive already? The Christensens don’t think so. Research by Harvard Business School found that while shares of disruptive companies like Salesforce may look pricey, in fact the opposite is true—such companies tend to be chronically undervalued. “Salesforce has a lot of customers. But there are even more companies who don’t use it,” says Christensen, who believes that eventually all companies will make the transition to cloud-based business software. “The lesson is that it’s often a lot bigger than you think.”

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