Posted on by steve blank
How did you go bankrupt?”
Two ways. Gradually, then suddenly.”
Ernest Hemingway, The Sun Also Rises
Every disruptive technology since the fire and the wheel have forced leaders to adapt or die. This post tells the story of what happened when 4,000 companies faced a disruptive technology and why only one survived.
In the early 20th century, the United States was home to more than 4,000 carriage and wagon manufacturers. They were the backbone of mobility and the precursors of automobiles, used for personal transportation, goods delivery, military logistics, public transit, and more. These companies employed tens of thousands of workers and formed the heart of an ecosystem of blacksmiths, wheelwrights, saddle makers, stables, and feed suppliers.
And within two decades, they were gone. Only 1 company out of 4,000 carriage and wagon makers pivoted to automobiles.
Today, this story feels uncannily familiar. Just as the carriage industry watched the automobile evolve from curiosity to dominance, modern companies in SaaS, media, software, logistics, defense and education are watching AI emerge from novelty into existential threat.
A Comfortable Industry Misses the Turn
In 1900, the U.S. was the global leader in building carriages. South Bend, IN; Flint, MI; and Cincinnati, Ohio, were full of factories producing carriages, buggies, and wagons. On the high-end these companies made beautifully crafted vehicles, largely from wood and leather, hand-built by artisans. Others were more basic wagons for hauling goods.
... continue reading