Introducing The Industrialist’s Dilemma
The Industrialist’s Dilemma is a new course at the Stanford Graduate School of Business that runs in the Winter of 2016, and is being taught by Stanford GSB Lecturer and XSeed Capital General Partner Robert Siegel (@robsiegel), Box CEO Aaron Levie (@levie), and is advised by Sapphire Ventures Vice President Max Wessel (@maxwellelliot).
Retail. Life Sciences. Transportation. Healthcare. Hospitality. What do all these industries have in common? Up until just a couple of years ago, they were largely insulated from the rules of technological disruption, and yet, all of a sudden they’re now the targets of some of the most heavily funded, talented tech companies on the planet.
Just as Marc Andreessen described that software eating the world four years ago, startups today are able to harness the power of cheaper computing, unlimited data storage, ubiquitous internet and smartphones, contract manufacturing, and improved digital experiences to attack industries that haven’t changed for decades or centuries. While for years the tech industry had been squarely focused on optimizing known tech problems –building faster search engines or a better phone– all this digital power is causing a set of entrepreneurs to explore brand new solutions to nearly every legacy industry.
Startups like Uber and Lyft tackled on-demand transportation, changing the taxi market, car ownership, insurance, and other adjacent spaces forever; Airbnb recognized our digital universe could connect surplus real estate supply with latent demand for a unique disruption on hospitality; 23andMe combined ever-cheapening genetic testing with big data to provide completely new ways to improve your health, and potentially even discover new drugs in the process; Nest combined the power of cloud computing, elegant software and hardware design, and contract manufacturing to disrupt the home appliance business, and now go after the entire connected home.
These startups benefit from zero legacy organizational baggage, little government overhead, some of the best software talent in the world, relatively cheap startup capital, and no brand reputation to jeopardize when attempting new unproven feats (like letting people rent out their bedrooms to strangers).
Comparatively, the biggest businesses in these industries have honed their strategies, built up assets, invested in government regulation, designed their business models, and hired talent to deliver products that are looking more and more out-of-date by the day. This is The Industrialist’s Dilemma: the systems, management and assets that led to success in the industrial era are holding incumbents back today, in some cases fatally.
As we move from an industrial economy to a digital one, everything — from the products and services that are delivered to customers to how organizations are run — is going to change. Here’s just a quick snapshot of how broad those changes are:
Transformation in products/services and their delivery (External):
Transformation in organizational capabilities and execution (Internal):
In “The Industrialist’s Dilemma” at Stanford GSB this Winter, we’ll be exploring the lessons of the world’s best startups taking on legacy industries as well the fastest-adapting industrialists that are putting digital at the center of their future strategies. Patrick Collison at Stripe, Anne Wojcicki at 23andMe, Tony Fadell at Nest, and Ron Johnson at Enjoy will offer their perspective on how they’re challenging traditional models. We’ll then learn from Mark Fields at Ford, Beth Comstock at GE, Bernard Tyson at Kaiser, and Charlie Scharf at Visa about how they’re responding to digital transformation and leading these historic brands into the future.
Each week we’ll draw lessons from the distinguished guest, and we’ll keep this Medium updated with the various lessons learned by the the leading startup or industrialist. We’ll also be sharing the fireside chat portion of each class session, so stay tuned for videos from each lecture!