Podcast Summary: Coaching for Leaders Episode 761

Title: Notice Disruption and Innovate Through It, with Steve Blank
Host: Dave Stachowiak
Guest: Steve Blank
Airdate: December 1, 2025

Episode Overview

In this episode, Dave Stachowiak sits down with Steve Blank—entrepreneurship educator, author, and founder of the Lean Startup movement—to explore how leaders can recognize patterns of disruption and innovate effectively in rapidly changing environments. Drawing on historical analogies, especially the demise of the carriage industry and rise of automobiles, Steve and Dave provide actionable insights for leaders navigating current technological upheavals, particularly around AI.

Key Discussion Points and Insights

1. The Nature and Pattern of Disruption

• Hemingway’s Bankruptcy Analogy: Dave opens by referencing “gradually, then suddenly” — a metaphor for how disruption often takes organizations by surprise. ([00:00])
• Carriage Industry Case Study: Steve introduces the 1890s horse and buggy sector as a historical parallel to modern disruption, emphasizing how entire ecosystems can vanish rapidly when technology shifts. ([02:19]-[05:13])
• Clayton Christensen’s Innovator’s Dilemma: The episode threads this concept throughout—disruption begins with inferior, easily-dismissed products that incumbents ignore. ([05:54]-[08:05])

Notable Quote

“Every technology since the fire and the wheel have forced leaders to adapt or die.”
– Steve Blank ([02:55])

2. Why Incumbents Miss the Future

• Dismissal of New Technologies: Early automobiles were loud, unreliable, and expensive, leading carriage makers to laugh them off—mirroring today’s reactions to nascent tech like AI. ([06:28]-[08:05])
• Identity and Blind Spots: Carriage makers and artisans saw themselves in their vocation (mobility = carriage, not cars), leading to fatal tunnel vision. ([15:58])

3. What it Takes to Survive Disruption

• Studebaker’s Pivot: Of over 4,000 US carriage & wagon makers, only Studebaker successfully pivoted. Their secret: redefining their business around "mobility," not carriages. ([08:27]-[10:31])
  • They began with electric vehicles (1902), moved to gasoline (1904), retrained their workforce, and retooled factories.
• “Jobs to be Done”: The importance of understanding your customer’s core need/job, not just the product. ([10:31]-[11:26])
• Role of Founders vs. CEOs: Founders drive true transformation due to their visionary, risk-taking nature; established CEOs usually focus on process and scaling, not exploration or reinvention. ([14:13]-[15:58])

Notable Quote

“Founders are closer to artists than in any other profession. They hear things other people don't. They're driven to take what they see and create the future.”
– Steve Blank ([14:24])

4. Innovation vs. Innovation Theater

• Innovation Theater: Many companies mistake activity (hackathons, accelerators, beanbag chairs) for genuine innovation. Steve calls out organizations for not delivering real customer value. ([24:43]-[26:54])
• How to Tell the Difference: “How much of the stuff you're innovating on is being delivered to customers, period?” Internal process kills more innovation than customer rejection. ([24:54])

Notable Quote

“Processes and procedures, which work great for execution, strangle innovation in its crib.”
– Steve Blank ([25:53])

5. Structural Disincentives and Leadership Response

• Why Good Companies Miss the Boat: Even when companies see the future coming, they're often structurally—by incentives, risk aversion, or systems—disincentivized to act on it. ([18:58]-[19:06])
• Microsoft Case Study: Referencing Microsoft's earlier failures in mobile and search due to alignment with core business models, not emerging opportunity. ([19:06])
• Advice for Middle Managers: Steve’s blunt view: If your senior leadership is not on board with genuine innovation, consider leaving. Mid-level efforts rarely overcome top resistance; look for ambidextrous (execution + exploration) organizations. ([20:48])

Notable Quote

“Mid-level managers trying to steer a large corporation towards disruption is an exercise in futility if senior leadership is not willing to do that.”
– Steve Blank ([20:48])

6. Disruption, Bubbles, and the Long Game

• AI & Bubble Dynamics: Distinction between valuation and real revenue in AI (and prior bubbles like dot-com). Leaders need to prepare for sudden shifts in investment focus—from hype to profitability. ([27:47]-[29:23])
• Lessons from Failure: The story of Webvan: Early failure post-dot-com bubble, but the long-term concept (online grocery delivery) proved right. Sometimes, infrastructure built in a bubble becomes the foundation for the next wave. ([29:23]-[31:50])

Notable Quote

“The company failed and employees lost their jobs, but the VCs...cleaned up. Who makes money is sometimes completely divorced from what products you're delivering.”
– Steve Blank ([31:25])

Memorable Moments & Quotes with Timestamps

• On Disruption’s Warning Signs:
  “Disruption begins with inferior products that the incumbents just kind of laugh at.” – Steve Blank ([05:13])
• On Identity Blocking Innovation:
  “Their identity was tied up in that...they were artisans, and the cars...were these dirty, noisy, like, kind of like beneath them in a way.” – Dave Stachowiak ([15:58])
• On Survival:
  “Out of 4,000 companies, everybody seeing the same stuff, only one of them understanding that their business model needed to change.” – Steve Blank ([10:31])
• On Middle Management’s Option:
  “In the 21st century, I would simply say update your resume and go join a startup or join something that's actually going to make a difference.” – Steve Blank ([20:48])
• On Spotting Real Innovation:
  “If stuff isn’t delivered to customers and making impact, it’s not innovation—it’s theater.” – Steve Blank ([24:54])

Important Segment Timestamps

• [02:19] – Introduction to the horse-and-buggy example as disruption model
• [08:05] – Studebaker’s pivot and key lessons for incumbents
• [14:13] – The founder’s mindset vs. the CEO's operational focus
• [18:58] – Why companies see but can’t act on the future
• [24:43] – How to tell if your company is stuck in innovation theater
• [27:47] – Impact of economic bubbles on innovation and the AI analogy
• [29:23] – Lessons from the dot-com era, Webvan, and the value of infrastructure built during bubbles

Actionable Takeaways for Leaders

• Regularly question whether you're in the "product" business or the "customer job" business.
• Study history—today's disruptions often mirror past patterns, and ignoring them is perilous.
• Senior leadership must structurally support innovation beyond theater; otherwise, real change is nearly impossible.
• Innovation requires different skillsets from exploitation—ask who’s really doing both, and how you’re measuring progress.
• Don’t mistake a lack of short-term results in a new sector (like AI) for irrelevance—the infrastructure built today may power the next wave after the hype fades.

Final Thoughts

Steve Blank powerfully reminds leaders that disruption can be easy to see in hindsight, but acting before it's “suddenly” too late takes courage, vision, and a willingness to redefine your business fundamentally. History’s lessons, from Studebaker to Webvan, offer rare clarity for those willing to look, listen, and, above all, act.

For further reading:

• Steve Blank’s article: "Blind to the CEOs Who Miss the Future" at steveblank.com

Related Episodes Recommended in Outro:

• Episode 430: “How to Start Seeing Around Corners” with Rita McGrath
• Episode 470: “How to Build an Invincible Company” with Alex Osterwalder
• Episode 476: “How to Pivot Quickly” with Steve Blank

(This summary omits all advertisements, intros/outros, and non-content sections as instructed.)