Immortal firms in mortal markets?

Purpose - The “innovator's dilemma” suggests that by listening to current customers leading firms often lose their markets to upstart newcomers as a result. The purpose of this paper is to understand how entrepreneurs successfully create such upstart firms and new markets, since this ought to have direct implications for theorizing about the innovator's dilemma. Design/methodology/approach - The paper examines implications of recent studies in entrepreneurial expertise that show expert entrepreneurs use an effectual logic of non‐predictive control. It then connects these ideas to notions of firms and markets as artifacts of entrepreneurial action. Finally, it describes the implications of these concepts for the innovation strategies of large corporations, and specifically for firms periodically facing the innovator's dilemma. Findings - The findings suggest that the practical answer to the innovator's dilemma is not to predict technology trajectories more accurately, or otherwise strive to build immortal firms in mortal markets. Instead, innovation managers should focus on building new markets. This will inevitably involve pluralizing decision‐making technologies by including some aspects of effectual decision making (used by expert entrepreneurs) into the decision‐making processes of large firms. Originality/value - It is the basic contention of this paper that the innovator's dilemma is not the story it is usually portrayed as, i.e. technology commercialization. Instead, the core issue is investing in and building new markets. The paper brings a novel theoretical framework (from entrepreneurship) to bear on this problem.