Abstract: Whether or not a low level of breakthrough innovation for Chinese firms is related with innovator’s dilemma remains unanswered. Based upon the Christensen’s innovator’s dilemma theory and Andrew S. Grove’s sincere belief about that only the paranoid could survive, the innovator’s dilemma is redefined from a generalized angle. The empirical conclusion indicates that most Chinese firms are sticking in the innovator’s dilemma; marketing tactic capability is a major factor which impedes Chinese firm’s breakthrough innovation; and adopting market paranoia could reverse the negative effect of marketing tactic capability on the breakthrough innovation and improve the positive effect of marketing strategic capability on the breakthrough innovation.