Please forgive the off the wall example. But as I watched the video above, I felt like it served as a reverse example of Clayton Christensen’s theory on Disruptive Innovation, which holds that upstart challengers usually displace market incumbents by first establishing a toehold with low-cost products in markets that the incumbents are willing to cede. Over time, the challengers manage to increase quality while still keeping costs low, taking over successively higher-margin markets until they finally dominate the market as a whole. (This happens all the time. Look it up.)
While this theory works In a markets where a premium product is established, this poor kid (the incumbent with the “FREE HUGS” sign) didn’t know what hit him when the Urban Prankster slid in to that unchallenged “premium” spot and started stealing his “business.” Apparently, people don’t want HUGS when they can have PREMIUM HUGS.