Resist or Embrace Disruption? Technological disruption can undo the most well-conceived business model of a company or industry overnight. When we recognize the new data for what it means for our future, our companies must choose:
Cling to traditional strength? Or boldly reinvent our business model?
With the rise of digital timepieces, it was clearly understood that these modern devices were a direct threat to storied mechanical brands like Rolex. Instead of shifting to digital technology, Rolex doubled down on its heritage and emerged stronger. In contrast, with the rise of a technology ecosystem, Netflix abandoned its traditional business model and embraced new streaming technology, leaving its competitor, Blockbuster, in the corporate dustbin.
Today’s article explores two archetypal strategies for facing disruptive technology: resisting the trend by focusing on timeless core value and embracing the trend by transforming early. We review several case studies, offering insights for founders, brand strategists and business leaders alike. In the Appendix (available for paid content subscribers), we provide details of other companies implementing these strategies across several industries, including luxury goods, tech, fashion and media.
Archetype 1: Resisting Disruption and Upholding Timeless Value. Not every technological wave must be ridden. Some brands have thrived by intentionally resisting certain tech trends and doubling down on what made them timeless. By focusing on craftsmanship, authenticity, and core loyal audiences, these companies turned “old” into “classic.” Crucially, resistance doesn’t mean ignoring technology entirely. It means adopting new tech only in ways that reinforce the brand’s fundamental value.
Rolex: Defying the Quartz Revolution with Timeless Craftsmanship. In the 1970s, inexpensive quartz watches from Japan, such as Seiko and Casio, flooded the market, offering unprecedented accuracy and low prices. This “Quartz Crisis” nearly wiped out the Swiss mechanical watch industry. Some Swiss brands tried but failed to compete with quartz technology. Rolex took a different path.
While Rolex cautiously experimented with a few quartz models, it ultimately doubled down on its timeless craft – mechanical movements, impeccable quality, and prestige marketing. Its watches weren’t merely utilitarian timekeepers, but luxury collectibles and status symbols. Faced with the technological threat, Rolex didn’t overhaul its products. Instead, the company recommitted to what it does best – crafting luxury mechanical timepieces. Guided by its brand’s enduring principles, including strict quality controls and exclusivity, Rolex cultivated its aura and sought to evoke the emotion of luxury brand shoppers. Mechanical watches gradually became luxury collectibles, prized for their artistry and heritage.
Several decades later, Rolex avoided jumping into the fray with the rise of smart watches. Instead, the company emphasized the enduring value of its traditional luxury brand. By 2019, Apple’s smartwatch shipments did exceed the entire Swiss watch industry in units (30.7 million vs. 21.1 million), but that development didn’t diminish Swiss makers’ dominance of the luxury segment. Indeed, there is still a robust global market for prestigious mechanical watches, despite the advent of the digital age. The timeless craftsmanship of a Rolex continues to resonate with its loyal customer base.
Archetype #1 Key Takeaways 💡 Not all innovations must be adopted. When the brand’s core value proposition is unchanged, it still resonates with customers and the brand can persist in occupying a profitable niche. An enduring brand’s equity can outlast short-term tech fads.
Archetype 2: Embracing Disruption Early and Reinventing the Brand. Many successful companies took a far different approach to disruption. For these companies, embracing disruptive technologies enabled them to undergo a significant business transformation. Making these moves entails substantial risks, but when successful, these moves offer those early adopters an opportunity to unlock new growth opportunities and leapfrog slower rivals. For slow-to-adopt rivals, standing still often proves riskier.
Review of several of the successful business transformations suggests a few apparent trends:
#1 A willingness to cannibalize one’s own legacy product.
#2 Heavy investment in new capabilities.
#3 A visionary belief that the imminent change in the market’s rules.
#4 Those companies embracing the change don’t wait to be disrupted. They become disruptors themselves.
Netflix: From DVD Rentals to Streaming Pioneer. As a result of its game changing embrace of disruptive innovation, Netflix became an industry disruptor and dominator.
In the late 1990s, American households rented videos at a convenient location in their neighborhoods. Indeed, there were thousands of these video rental, brick-and-mortar stores spread across the US. In 1997, Netflix introduced its subscription service which enabled customers to rent video through their platform. Amazingly, their DVDs would seamlessly arrive in the mail. That was just the first act in Netflix’s disruptions.
With the convergence of high-speed internet, improved video compression and changing consumer habits, streaming video online became feasible in the mid-2000s. This development threatened the home video rental market, offering a more convenient way of watching movies at home. A push of the button vs. a drive to the local strip mall.
Netflix’s original DVD-by-mail model was a clever leverage of Internet 1.0—an early use of emerging web infrastructure to build a scalable, tech-enabled distribution system. It supported a profitable subscription business and could have easily justified incremental improvements to optimize logistics and grow modestly. But Netflix’s leadership didn’t settle. In the early 2000s, they recognized the accelerating power of broadband and the coming shift toward streaming. Rather than defend the status quo, they placed bold bets on the future—pivoting from physical media to digital delivery before the market demanded it. In the late 2000’s, it started introducing streaming of select titles. With the bridge behind Netflix’s business clearly in flames, it cannibalized the core business, eliminating its reliance on physical discs and its entire distribution network. Netflix offered a subscription model which eliminated all the inconvenience of the legacy competitive businesses like Blockbuster. No more late fees. Unlimited viewing for a flat monthly fee! Through its “all-in” bet on streaming, Netflix positioned itself on the top of the broadband wave. By the 2010s, it transitioned into a pure digital platform and started producing its own content, leveraging its stream medium even more.
Netflix’s early adoption of the streaming business model paid off handsomely. With the expansion of broadband, Netflix rapidly acquired millions of streaming subscribers. Meanwhile, its legacy competitor, Blockbuster, never dropped its reliance on in-store revenues and only launched its streaming option years later. Given its ubiquitous presence in the American strip mall of the 1980s and 1990s (more than 9,000 stores), Blockbuster’s 2010 bankruptcy still seems quite shocking.
Meanwhile, because of its bold actions, Netflix is now a global entertainment powerhouse with more than 300 million subscribers. In addition to toppling its rival, Blockbuster, its success flipped the movie script for traditional studios like Warner Brothers and Disney, who now own streaming platforms of their own.
Archetype #2 Key Takeaways💡 Disrupt yourself before someone else does it! Doing so may require sacrifice, including walking away from a legacy revenue stream in favor of a new revenue model.
💡 Stay focused on the customer’s evolving needs. What’s most convenient, such as on-demand access to a product or service, will often win the day. Be willing to be flexible in your delivery model, even if it means redoing your distribution network. Embedded in this case study is an important lesson for startups and incumbents alike: when you face a fast-changing, disruptive landscape, your ability to flexibly adapt your business model and assert a new vision are essential ingredients for sustaining success.
Practical Ideas for Today’s Business Leaders. There are many lessons embedded in these stories of companies facing disruptive technologies.
#1 Know Your Core Value and Audience. If your customers ultimately value the timeless aspects of your product (quality, craftsmanship, and curation), you might weather a disruption by doubling down on those and letting the mass market go elsewhere. But if the disruption strikes at the heart of why customers use your product (as in convenience or cost), you likely need to adapt your strategies.
#2 Don’t Be Complacent. Fallen stars crash hardest when they’re unable to overcome inertia. The dreaded “Day 2” sets into the mindset for these companies. While regular scanning of the horizon for emerging technologies and trends is important, it’s essential to undertake a mindset to seriously consider their impact on the status quo and be open to pivoting the business model. By encouraging a culture of innovation (and questioning assumed truths), your company can avoid falling prey to the unexpected innovation which unseats the standard way of doing business.
#3 Timing Is Critical. Embracing a new trend too early can be risky, but far better to be slightly early than too late. Netflix moved to streaming when the tech was just maturing. In contrast, Blockbuster acted only when its back was against the wall.
#4 Hybrid Strategies Exist. A nuanced point is that resisting vs. embracing is not always a binary choice. The best companies often do a bit of both. For example, the media companies which survived the arrival of digital content delivery resisted the free-content model, applying a new way of offering a subscription model. For some, the right choice is selecting what’s best tailored for their products and markets, adopting those aspects of disruption that enhance, or at least sustain, brand value.
#5 Learn from Others. Smart leaders use such case studies as mirrors for their own situations.
Ask, “Is our industry facing a ‘Netflix vs. Blockbuster’ moment? Or is this a ‘Quartz Crisis’ moment?”
Depending on the answer, the strategic choice is either undertaking a revolutionary change or recommitting to your business fundamentals.
Addressing the Incoming Wave. Issues of technological disruption will likely become even more difficult to manage with the advent of artificial intelligence. Agility in riding the wave will be essential. Otherwise, you need a strong enough brand identity to avoid being swamped by the wave. Both paths require insight and courage. As these case studies show, success belongs to the clear-sighted leader, irrespective of whether you bring the vision to boldly leap into the new tech adoption cycle or the confidence to stand pat with the strength of your brand.
Specific Thoughts for Service Providers (including Attorneys) for Dealing with the “Next Set” (of Waves). Not to bury the lead for today’s professionals, but since 2022, we’ve been inundated with automation solutions – AI agents, etc. – which offer potential accelerants for our professional lives. Are these re-fashioned assistants, or will they overtake the professional deliverable? This is an equally relevant question whether you’re a leading management consultant, a professional of a Big4 accounting firm, an AmLaw 100 lawyer or a similar professional embedded inside a corporation. Your brand matters. Those professionals (or firms) carrying extremely strong brand reputation might try, like Rolex, to resist technological disruption and insist on the traditional approaches. Others will undoubtedly aggressively disrupt the ways and means of delivering services. Another group will likely lean into their brand while exposing part of their service offering to AI assistant tools.
What is clear: law, accounting, … these are historically conservative service businesses -- it won’t be surprising if technology adoption is slower than in other industries. But give due consideration to the coming wave and make your choice!
Paid Content. There’s a detailed analysis of several other leading “resisters” and “embracers” in the Appendix!
© 2025. The Savvy Startup Advisor, LLC. All rights reserved.
About the Author: Kevin R. Davis is a 2x General Counsel who offers business stakeholders strategic guidance aimed at optimizing their operations, including implementing lean legal systems, improving risk management processes, undertaking business transformations, fundraising, engaging in strategic planning and handling exits. Earlier in his career, Kevin worked as a corporate attorney with Kirkland & Ellis, LLP and as a legal executive of Publicis Groupe. Kevin is a graduate of Northwestern University School of Law and Northwestern University.
Illustrations by Juliette Davis. Help tip the scale in favor of our talented illustrator, a graphics design student, Juliette Davis: https://buymeacoffee.com/savvystartupadvisor.
Nothing contained in this article should be construed as legal or investment advice. This article does not create an attorney-client relationship between any reader and its author. Neither the author nor the publisher is responsible for updating this publication to consider any changes in applicable laws. Nothing in this article is based upon the author or publisher’s experience with any specific individual or organization; any resemblance to actual persons, places, or events is purely coincidental. If legal advice or other professional assistance is required, the services of a competent professional should be sought.
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