Do the paranoid invest in disruptive innovations? To answer this popular business belief that ‘only the paranoid survive’, we introduce and examine the concept of strategic paranoia as a social psychological foundation for disruptive innovation strategies. We define strategic paranoia as a fear-induced state of mind about competitors’ actions and intentions. We hypothesize that decision-makers with strategic paranoia are more likely to invest in disruptive innovations, but concentrate these resources in a small set of product attributes, and do so prematurely. We find support for these hypotheses across two pre-registered experiments. We, thereby, introduce strategic paranoia into organizational research as a positive motivator for disruptive innovation strategies.
