The Motley Fool Interviews Scott D. Anthony: Epic Disruptions

In this podcast, Motley Fool analyst Sanmeet Deo talks with author Scott D. Anthony about innovation, AI, and the business of disruption.

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A full transcript is below.

This podcast was recorded on Oct. 26, 2025.

Scott D. Anthony: The challenge you have is that the people who love you the most give you the worst answers when you ask them about the future. If you ask somebody who really loved the texture of how an Eastman Kodak print would look on silver halide film, they're not going to tell you I want a reasonably crummy digital facsimile, or I'm going to go post on this thing called Instagram which emerged in 2012. They're telling you, I love what you do. Can you do more of it?

Mac Greer: That was Scott D. Anthony, a business professor and author. I'm Motley Fool producer Mac Greer. Now, Motley Fool analyst Sanmeet Deo recently talked with Anthony about innovation, AI, and disruption. Enjoy.

Sanmeet Deo: Hi, Fools. We're thrilled to welcome Scott D. Anthony, a Clinical Professor of Strategy at Dartmouth's Tuck School Business and acolyte of the legendary professor Clayton Christensen. His powerful new book, Epic Disruptions explores 11 innovations that shaped our world and positions disruption as the engine of progress. Named one of the world's most influential management thinkers by Thinkers 50. Scott's insights are essential for navigating the turbulent landscape of exponential change we're facing today. Scott, welcome to the show.

Scott D. Anthony: I'm thrilled to be here. Thanks for the kind introduction.

Sanmeet Deo: I read this book and it was great. Epic Disruptions can be timelier. We often talk about innovation here at the Fool with the companies that we're looking to research and pick for our members. But you and your mentor, Clayton Christensen define disruption in a very specific way. You described it as engine of progress or an unstoppable force. For our members, how do you define disruptive innovation and critically, why is it so important for investors and organization leaders to understand the mechanism behind it? That's not just about the fall of the old, but also the rise of what comes next.

Scott D. Anthony: You've got it exactly right. It is a really critical thing to understand if you're trying to decide which company is going to thrive and which company is going to struggle. Let me answer your question by doing a quick tour through history. My father was born in 1947. That year there was one computer in the world. It weighed 20 tons. I was born in 1975. Now, there are tens of thousands of computers, but I would never see any of them because they're locked inside great big organizations, they're complicated, and expensive. When my daughter Holly is born in 2007, there are hundreds of millions of computers, desktops, laptops that anyone can access. Of course, that was the year Steve Jobs and team introduced the iPhone. Today, there are billions of computers in our palms and in our pockets. This is disruptive innovation, taking things that were complicated and expensive, making them simple and affordable, changing market dynamics, driving explosive growth. You're on the right side of it, you're driving tremendous growth. You're on the wrong side of it, very different story.

Sanmeet Deo: We were taught that the great firms fail in the face of disruption precisely because they're doing everything right. They listen to their best customers. How can listening to your best customers be an inaccurate guide, when the world is going to flip around you? Using example of Kodak, which you had in your book, they saw digital coming, but what got them was missing the merging of cameras and mobile phones.

Scott D. Anthony: Exactly right. The challenge you have is that the people who love you the most give you the worst answers when you ask them about the future. If you ask somebody who really loved the texture of how an Eastman Kodak print would look on silver halide film, they're not going to tell you, I want a reasonably crummy digital facsimile or I'm going to go post on this thing called Instagram, which emerged in 2012. They're telling you, I love what you do, can you do more of it? Or imagine you're Apple in 2007, you've got a team that's been working on this phone. There's a voice in the ear of Steve Jobs that says, don't do it. We've got a great personal computer line. We've got a great laptop line and don't forget, they have this MP3 line of players, the iPod that was churning off all sorts of cash. It might feel to some that the disruptive approach is cannibalistic but the thing that's so powerful about disruption is it unlocks market. Even if it does cause you to lose at the margins, you win in the long run, but it requires a mindset that says, I need to think and act differently when change is happening.

Sanmeet Deo: It was interesting you mentioned the book, too, Kodak was on the verge of disrupting themselves. They did invest in digital cameras. They saw it coming. But even with seeing it coming, we don't hear about it much anymore, they weren't able to get that right merging of the technologies or right fit to the customer.

Scott D. Anthony: This is the thing that is so great about Clay Christensen's original research. One of the things that Clay taught me is ask great questions. That is the great way to get great insights. His question was a doozy. His question was, why is it that great companies fail? That's interesting. If you ask, why do stupid companies fail? Well, it's because they're stupid, but great companies doing everything that seems to be right, Eastman Kodak invest early in digital imaging, moves early into online platforms when it buys Ofoto, one of the early photo sharing sites. It's really hard though. Kodak got over Gate Number 1, allocate resources to the disruption. They failed at Gate Number 2, which is reimagine your business in the face of that disruption. That's hard because you have a long successful past of being a certain company. That creates a lot of powerful things, but also creates what I call in the book, ghosts, that can haunt your ability to change. Kodak's identity was so tied into film that when it had that site Ofoto, rather than embracing the disruptive power and essentially creating Facebook or Instagram well before anyone did any of that, they said, how do we get more people to print more pictures which in hindsight was the wrong thing to do.

Sanmeet Deo: Technology, just isn't enough, it has to be coupled with a business model to capture the value and you noted that current AI companies business models are banal and pretty boring. Why is the ability to create, deliver, and capture value like Ray Kroc did with real estate in funding McDonald's, so crucial for a disruptive company?

Scott D. Anthony: First of all, I have to really acknowledge and appreciate you just strung together something from the conclusion and a chapter in the middle of the book, which is a good sign that you got beyond what people get through. I really appreciate that.

Sanmeet Deo: Absolutely.

Scott D. Anthony: The thing that's really important here is if you look at the patterns of disruptive innovation, one of the meta themes in the book is disruption is predictably unpredictable. The business model is the real special sauce, how you create, deliver, and capture value. Why? Well, a product is a thing. A service is a thing. A thing is relatively easy to copy. Yes, Open AI might always have a small lead over other frontier models in terms of performance, but we can see many people are figuring out the nuts and bolts of how you make large language models work. That's not the hard part. Well, it's hard, but it's not the hardest part. What's really hard is saying, how we use this to create value in unique ways, deliver it in unique ways, and then go and capture the value ourselves. That's a system. A system has multiple parts that feed off each other, that's really hard to copy. You could copy an individual function on the Apple iPhone, but once the app store kicks into gear and there's an ecosystem around it, it's really hard for anyone to credibly compete against it. I think the same thing will happen with AI. Right now, you have some amazing technologies. I'm very grateful for them. The valuations are just crazy until someone figures out something that is defensible. Right now, people have not and because of that, I think you're going to see the big model houses get absorbed into other players unless they can figure something out. We'll see.

Sanmeet Deo: Well, you're saying too, the snapshot right now is the valuation of the companies, the way the AI models currently work. I was listening to some of your other podcasts, you talked about how, well, Open AI and all these models just create a business model that's just another Ad engine. Google, became the best pretty much business model in the world based off their Ad engine, is that how these AI models are going to function, or will there be another unimaginable revenue model that they might come out with?

Scott D. Anthony: You'd imagine if Agentic AI is really able to deliver against promises, and I'm not a technology expert, but some would argue there are fundamental flaws in the technology that you never want to give too much over to AI because you get a small error rate on multiple tasks it compounds and that's bad. But if you're able to figure out actually getting stuff done, so Google's business model is based on connecting people who want to get stuff done. I'm searching for something, you've got it. If you have a business model based on actually getting stuff done, that's really interesting. The other thing that I've become mildly obsessed with, I don't know the answer, but I know it's a place to look. Disruption history teaches us you always watch people who are competing against non-consumption. What does that mean for AI? Well, if we see someone use it now, I watch my kid in ninth grade use it, the question for education is, will AI teach him better than his ninth grade instructor? You can debate that. If you've got someone in a country that has poor educational infrastructure, it's not are they better than the ninth grade teacher, it's are they better than nothing? The answer is clearly better than nothing. Education and healthcare models that are emerging in parts of the world that don't have great school infrastructure and don't have great healthcare infrastructure, I think those are ones that are going to drive big disruptive growth. I don't know the names of companies doing this yet but that's the place you got to watch.

Sanmeet Deo: A lot of the companies that we look for too is good management, sustainable competitive advantages, success demands, patient perseverance, willingness to be misunderstood for long periods so you emphasize looking at the edges and anomalies of a market. Given persistence required like Julia Child, example, 10-year effort behind her book, lots of challenges there. What specific behavior should investors look for management? It signals that they can turn what starts small into something really massive.

Scott D. Anthony: Great question. Of course, one big thing is demonstrated proof they've done it before. Why do we believe that Amazon.com can keep churning things out? Well, they've shown us through their original model and Prime and AWS and so on, that they are able to take small things and make them big and because of that, we give them a lot of latitude. Jeff Bezos would say, Amazon is the best place in the world to fail because he knew and the organization knew that to have the big success, you had to have a lot of failures. Investors said, we've seen demonstrated proof that you can actually make this work. That's one big thing. The second thing is you watch where people are spending their money. If all of their investments are in what the disruptive literature would call sustaining innovations, things to make what currently exist better, even if it's a big technological breakthrough that they're working on, you're a little bit worried because you want to make sure that investment portfolio, yes, has a bunch of things that are about today better, but also has some things that are about tomorrow different. Then finally, I think you really look for the vision that the leadership team has. If the vision is one that's about solving an important problem, getting an important job done, and there's multiple paths to get there, the equivalent of John F. Kennedy landing a man on the moon and bringing them back, you say, this is a company that I think could do something really interesting. If it's about how do I make sure that I maximize my returns from the feature set that's in a product or service, they're going to get caught when transitions come. Those would be the things that I would look for.

Sanmeet Deo: I really love the discussion about just being misunderstood for long periods of time. For the companies that we look at, many of the very successful ones that have succeeded over a very long period of time, have been misunderstood for very long periods of time. Amazon, for example, you mentioned, people just thought it was going to be a bookseller and that's all it can do and then Jeff Bezos had that visionary mindset of no, we're going to be much more. He probably had a whole plan laid out in terms of what they were going to do. Even through the process, people misunderstood and probably criticized that. I remember thinking, who's going to buy things online? There's no way. I don't trust buying stuff online. Now, we've got cars and furniture and everything online without batting an eye. Have you found that that tends to be a lot of what makes these disruptors just scale so much?

Scott D. Anthony: I think it's really important, [inaudible]. The ingredients are not that complicated. You find a problem that's not well solved, you find a disruptive way to solve that problem in a different way. You go and get a business model that reinforces it. Actually, doing that is really difficult. This idea that we are going to really focus Jeff Bezos obsessively on the customer, the problem they're trying to solve, the job they're trying to get done, and then be willing to be misunderstood for long periods of time. Chris Dixon from Andreessen Horowitz had a definition of disruption once that I really liked, which is a disruptive idea is a brilliant idea that sounds like a stupid idea the first time you hear it. [laughs] The first time you hear about something like Airbnb, you're like, that's crazy. No way is some random going to sleep on a couch in people's house until it actually does. If it was obvious, it would have already been done. It's got to be something that breaks from that in some way. I think the other thing that's just important to remember is even the visionaries don't have perfect ability to spot and articulate sometimes their vision. I had forgotten this. You go back to Steve Jobs and the launch of the iPhone in 2007, what he said was the killer app was not the slick Internet browser. It was not the app store because there was no app store. It was the ability to make phone calls. He said the killer app was the ability to make phone calls. You listen to that, you're like, wow. He was completely wrong and it required him being convinced to open up the infrastructure and create the app store for the iPhone really to become the blockbuster success it was. Again, snapshot movie, and in that snapshot, even the smartest of us can sometimes miss things.

Sanmeet Deo: We're in the messy middle of a massive AI disruption. You warned in your book too and you mentioned it a little earlier that disruption casts a shadow, so what conflict and messiness the societal battle resulted from the branding of Jaywalkers during the Model C era and must leaders prepare for as AI accelerates?

Scott D. Anthony: You've given me the nod to tell my favorite story from the book or at least one of my favorite stories. The Jaywalker hint that you heard there, so let me tell you the brief story and then bring it to present day, 1920's, Henry Ford had achieved his vision, the car for the multitudes. The Model T, which started at about $30,000 in today's terms was down to $5,000. Sales were through the roof. Good for many people, but bad if you lived in a city because cities were designed not for cars, but for people and horses, and you sadly had accidents, injuries, and fatalities. All sorts of things had to happen to get through this messy middle period. We needed to have technologies like traffic lights. We needed to have norms like this is what you do for right of way. We needed to have laws like driver's license, and we needed to have the PR battle between the Jaywalkers and the flivverboobs. What's that? Well, you had two sides, you had the motorists, the pedestrians. The motorist said it is the pedestrians problem. They're wandering aimlessly into the street. Let's brand them jaywalkers. J is a country bumpkin, walker obvious. They got the Boy Scouts to give out little cards saying don't be a jaywalker crossing these designated areas.

The pedestrians fought back. They tried to brand the motorist, fliverboobs, F-L-I-V-V-E-R B-O-O-B. Flivver is all time slang for a car and boob, well, that's obvious. You know who won this battle? You type in flivverboob, you get a red squiggle underneath the word. The word no longer is in the Lexicon. 1924, a New York magistrate said we now know 80% of the traffic incidents are caused by pedestrians, so onwards, we go. What is this matter about today? Well, we are in the messy middle of AI and the thing I really worry about is there's a big push to say, hands off, let's just let the market work through everything. Let's let the technology work through everything. Let's remember, to get through the messy middle of automobiles, we needed norms, we needed laws, we needed technologies that provided boundaries, that provided barriers that said you can't do and you can do. I think history says we might need the same thing for AI. If we don't, there's going to potentially be some really bad things that happen. I'd say, I think an interesting thing to reflect on.

Sanmeet Deo: One thing too with disruption and innovation, there's a fine line between it being that recognize if it's a disruption or innovation or if it's a fad. One thing you talked about additive manufacturing, the 3D printing stuff, for a period of time, that was the next thing. Everyone's really excited about it. Now, some people call it a fad, maybe it's one of those things where it will come back and maybe the time wasn't right. How can consumers and investors really pinpoint what is a staying innovation or disruption versus more just a fad?

Scott D. Anthony: The metaverse would be another one that would go in the same category. People would be like, three years ago, Facebook changed its name and people are appointing chief metaverse officers, and that's all gotten quiet. But in both cases, additive manufacturing and things that would be metaverse related technology. Technology advances, there are problems out there that those technologies solve in unique ways, and they will both have changes in many industries throughout our lifetime, I think. How do you know? The thing that you look for really is Number 1, to what degree is there important problem that is not well solved by existing solutions, so it's complicated, expensive, inaccessible to solve it. Number 2, to what degree do you have a technology that disrupts that that makes it simple, affordable, and effective to solve the problem? Number 3, then, and this is really important for things like additive manufacturing, what is the improvement trajectory from today's technology? As we watch that movie, is it something where, hey, it's free riding on the doubling of Moore's law and there's hundreds of billions of dollars being invested, so we know we're going to see big improvements, or are there fundamental physical limitations that mean, yes, things will get better, it's just going to take a lot longer? This is in one of the footnotes in the book too, related to that, there was an analyst who used to work at the Clayton Christensen Institute for Disruptive Change, Horace Dediu who did the most comprehensive review, I think, of adoption curve for disruptive innovations. Everyone thinks everything's going faster, and Horace's answer was, yes, but. Yes, if it is something that is modular, so it plugs right into existing systems, ChatGPT, it goes on your laptop, on your cellphone, whatever, those things have dramatically accelerated. If it requires the creation of a new value network or ecosystem like additive manufacturing needs to do or autonomous vehicles, it's one thing to get the technology right, but then you have to deal with all the other stuff around it. Those things just always take longer and at least in Horace's view, those things have not sped up. One piece of advice I give my students is go and look at what are some of the rate determining factors for something you're investing in. If it's a bet on demographics, there will be more people in Africa in 10 years than there are now, good, go make that bet. If it's a bet on a system changing, be cautious about it. System change just takes a long time. Smart health for as much as I love it, healthcare has shown itself to be impervious to almost everything. A true system level change there is going to be incredibly hard. Again, lots of opportunities still but you want to go in with that caveat in mind, too.

Sanmeet Deo: I agree. I'm always fascinated by health and wellness and the adoption of technology in that space is just mind numbingly slow and it seems so obvious, but it just doesn't happen but because like you said, it's a system change. It's a whole other way of approaching and doing things.

Scott D. Anthony: The other thing too is you have to ask yourself, is it something where we're just doing something new or is it something where we have to unlearn something first? I watch the way that my kids use AI. They just pick it up and use it for where it's helpful. I have to first teach myself this is not a search engine. [laughs] I have to go through that. The great example of this is we type on keyboards that were purposefully designed to be inefficient and ineffective. The query design for keyboards was meant to slow us down because in old fashioned typewriters, you type too fast, the keys get stuck. I don't know about you, but I have not used an old fashioned typewriter. I was doing my college applications in 1991, yet this inefficient design has persisted because too many of us would have to unlearn the old and learn the new and we say, you know what? Good enough. You have to ask that question too.

Sanmeet Deo: Absolutely. Well, Scott, this has been fantastic. Reminds us, whether you're building a company or managing a portfolio, success requires a growth mindset, welcoming anomalies, realizing the next great growth businesses often start with looking small and significant and even laughable, but they can become something huge and massive disruptors in our life and world. For our Motley Fool members, where can they find your book and how can they connect with you?

Scott D. Anthony: The book is available on all major retail channels. You can learn more about it at epicdisruptions.com, and LinkedIn is the social network that I like to hang out on.

Sanmeet Deo: Great. Well, thank you for joining us today, Scott, and much success for your book.

Scott D. Anthony: Thank you very much. It's been my pleasure. I really enjoyed the conversation.

Mac Greer: As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations or against so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes for the Motley Fool Money Team, I'm Mac Greer. Thanks for listening, and we will see you tomorrow.

Mac Greer has positions in Alphabet, Amazon, Apple, McDonald's, and Meta Platforms. Sanmeet Deo, CFA has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, and Meta Platforms. The Motley Fool has a disclosure policy.