The primary threat from AI disruptors isn't immediate customer churn. Instead, incumbents get "maimed"—they keep their existing customer base but lose new deals and expansion revenue to AI-native tools, causing growth to stagnate over time.

Established industries often operate like cartels with unwritten rules, such as avoiding aggressive marketing. New entrants gain a significant edge by deliberately violating these norms, forcing incumbents to react to a game they don't want to play. This creates differentiation beyond the core product or service.

Hollywood's current crisis is self-inflicted, stemming from a decades-long failure to adapt its business models and economics. Instead of innovating to compete with tech-driven services like Netflix, the industry persisted with inefficient structures and is now blaming disruptors for inevitable consumer-driven changes.

Industries fixated on prestige—awards, parties, and reputation—create cultures that resist common-sense business improvements. This focus makes it difficult for insiders, especially those lower on the totem pole like authors, to challenge the status quo and say "the emperor has no clothes."

Incumbents are disincentivized from creating cheaper, superior products that would cannibalize existing high-margin revenue streams. Organizational silos also hinder the creation of blended solutions that cross traditional product lines, creating opportunities for startups to innovate in the gaps.

Aiming for complete feature parity between an old and new system is a trap. It forces the business to halt innovation for an extended period, and by the time the 'perfect' replacement is ready, the market has moved on, rendering the new system already outdated.

It's exceptionally rare for a company to make fundamental changes once its founders are gone. They become "frozen in time," like 1950s Havana. This institutional inertia explains why established industries, like legacy auto manufacturers, were unable to effectively respond to a founder-led disruptor like Elon Musk's Tesla.

Being the de facto industry standard removes the external pressure to innovate. Dominant companies often resist internal change agents who want to 'rock the boat,' fostering complacency. This creates an opening for more agile competitors to gain a foothold and disrupt the market.

In risk-averse sectors like law, AI's ability to automate core, revenue-generating tasks (e.g., writing) acts as the primary driver for innovation. The threat of being made obsolete forces legacy players to embrace technology and new business models they would otherwise ignore or resist.