Business is changing faster than ever, and most of the shift is being driven by artificial intelligence and altering customer expectations. While many companies struggle to keep up, history shows that some of the biggest breakthroughs come from entrepreneurs and small businesses that recognize change early and turn it into opportunity.
That is one of the central ideas Jeffrey Cole explores in his upcoming book, Disruptors at the Gate. Cole, Founding Director of the Center for the Digital Future at USC Annenberg and Founder of the World Internet Project, has spent decades studying how technology changes consumer behavior and business models. He has also advised four U.S. presidential administrations and some of the world’s leading companies on emerging technologies.
On the latest episode of Business Trends Today, Cole explains why disruption is hard to anticipate, why smaller companies can beat established businesses and what entrepreneurs can learn from past waves of technological change as AI reshapes nearly every industry.
Disruption rarely comes from the expected competitor
Cole argues that businesses often misunderstand disruption because they look for threats within their existing competitive landscape. He cites Amazon, Uber, and other transformative companies to show how quickly an outsider can overturn an established business model.
“Disruption comes from unexpected places.”
“The disruption of the book business should have come from Barnes & Noble,” Cole said, but he pointed to Amazon as the company that truly changed how consumers buy books. Likewise, he observed that the taxi sector might have anticipated a major player like Hertz, Avis, or Yellow Cab to revolutionize transportation, rather than a startup employing a new algorithm.
The challenge for established companies is that they have significant investments in the status quo. Protecting an existing business model can make it difficult to recognize when consumer expectations or technology have moved beyond it.
Additionally, Cole pointed to the music industry’s resistance to digital distribution and Kodak’s failure to capitalize on digital photography as examples. Kodak had developed digital photography decades before it became mainstream, but its existing film business made the new technology difficult to embrace.
Turn disruption into an advantage
According to Cole, entrepreneurial thinking is often easier to find among founders because smaller companies have less established systems to protect. They can start from scratch, experiment with new ideas and change direction without having to overhaul a massive organization.
Google illustrates that principle when the company didn’t invent search, Cole noted. Instead, its founders found a better way to deliver it. More importantly, they understood that their own success could eventually attract another disruptor. That mindset, Cole said, is critical for businesses of every size. Companies cannot assume that past success will protect them from the next wave of change.
AI could be biggest disruption yet
Meanwhile, Cole sees AI as part of a much larger pattern of technological disruption. He described the internet, COVID-19 and AI as three major disruptions occurring within roughly 25 years, despite such large-scale changes historically appearing much less frequently.
He believes AI could ultimately represent the biggest technological disruption in history, affecting virtually every industry and creating significant changes in both work and personal life.
But he also sees a major opportunity for small businesses. Like the internet, AI can level the playing field by giving smaller companies access to capabilities that previously required the resources of much larger organizations. Entrepreneurs can use technology to operate with smaller teams, move faster and compete with companies that once had significant advantages in scale.
Prepare for disruption
Because companies cannot know exactly where the next disruption will originate, Cole recommends focusing less on predicting the future and more on examining the business itself. That starts with auditing leadership, customer relationships and organizational weaknesses, he said.
Cole also cautions companies against focusing too heavily on traditional competitors. Competitors often drive incremental improvements, while true disruption can fundamentally change the business model or eliminate the need for an existing service altogether. That distinction matters as entrepreneurs navigate AI and other emerging technologies. The goal isn’t to predict the next Amazon, Uber, or Google; it’s to build a business that can recognize fundamental change and respond before the old model becomes impossible to defend.
Ultimately, Cole encourages entrepreneurs to learn that disruption can originate almost anywhere. Businesses that dismiss this risk may inadvertently empower the disruptor even more.
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