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Box Founder: The Only Way to Beat Giants Is to Attack Their Business Model

By Aaron Levie · Startup Growth · 2 min read

Aaron Levie says big incumbents are locked into business models they can't change. If you find a disruption they can't respond to, that's how you survive.

Key Points

Big incumbents have tens of thousands of employees built to deliver products in a very specific way
Find disruptions that are too expensive, too strategic, or require talent they don't have
AWS disrupted server companies so badly they still haven't responded 12 years later

Those companies to this day have not responded. 12 years later they still have not responded.

Incumbents Are Locked In

Levie: Your competitors, the big incumbents, tend to be locked in pretty significantly to particular business models. They have in some cases tens of thousands of employees that are built to deliver products in a very specific way.

If you can find points of differentiation and a disruption that they can't respond to — because it is too expensive for them to respond to, or strategically it doesn't make sense, or they don't have the talent to respond to it — that is how you ultimately remain disruptive. That's the only way to survive as a small startup.

Find a disruption they can't respond to — because it's too expensive, too strategic, or they don't have the talent. That's the only way to survive.

The AWS Example

Levie: We take it for granted now. 10 to 15 years ago, to start a company you had to buy servers, put them in data centers, rack them yourself, connect them all together. That would take weeks or months and cost hundreds of thousands of dollars.

Then Amazon Web Services came out of nowhere with a completely different model. Now you don't have to buy servers anymore. You just write code and deploy.

Amazon did something so disruptive to the core business model of traditional server makers that those companies to this day have not responded. 12 years later, they still have not responded by being able to deliver these capabilities over the cloud.

Those companies to this day have not responded. 12 years later they still have not responded.

What to Look For

Levie: Really try to identify — are there things from a product standpoint that can be highly disruptive to how your product is delivered to clients versus how incumbent solutions were delivered?