Jeff Bezos and Warren Buffett have a lot in common. They are self-made industry titans, wealthy beyond imagination, incredibly smart, impressively driven.\nBut in the past few weeks, these men have unwittingly offered juxtaposing opinions on one very important topic: business disruption. Only one of these two esteemed paragons of capitalism can be right. My money is on Jeff Bezos.\nFirst, let\u2019s recap what was said.\nBuffet, at his Berkshire Hathaway annual shareholders meeting, declared \u201cthe success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business.\u201d\n\u00a0A bit of context may be necessary. Buffet, in case you didn\u2019t know, is a heavy investor in the insurance industry. Berkshire Hathaway even owns GEICO outright.\nThese were pretty strong words from Buffet, who is characteristically more diplomatic. What provoked Buffet\u2019s atypical response was news about Tesla partnering with Liberty Mutual Insurance to provide auto insurance for Tesla vehicles. Buffet seemed to take this action as something of an affront, which may explain his dismissive tone and defensive demeanor.\nMeanwhile, at an Amazon employee all hands meeting, Jeff Bezos sounded a defeatist tone as bleak as the sad little character Eeyore on a rainy day.\n"Amazon is not too big to fail,\u201d Bezos reportedly said. "In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years."\nBezos has made other such statements in the past. But this was the first unequivocal admission that there is no opt-out of this scenario, and the first time he has attached a definitive timeline. It\u2019s alarming, to say the least, when you consider Amazon is currently hovering around $1 trillion in valuation.\nTwo immutable laws\nBut here is why Buffet is wrong and Bezos is right. And the answer is quite simple and paradoxically profound at the same time. The fact is, despite all the fancy theories about what businesses need to do to compete, thrive and survive, there are really only two laws that are immutable and irrevocable:\n\nAny business or industry which can be disrupted, will be disrupted\nNo business or industry is immune from disruption\n\nIn short, Bezos is right. It\u2019s not a question of \u201cif\u201d but of \u201cwhen.\u201d\nNow, Buffet could be proven right about Tesla specifically. Reams have been written speculating Tesla\u2019s imminent demise. Tesla\u2019s mercurial leader, Elon Musk, seems to be into everything, so who knows if this is just another whim or an actual strategic move.\nBut Buffet is absolutely wrong to be dismissive in general regarding the possibility of another industry or an outsider competing in his space.\nIt\u2019s disappointing to hear a man of his experience and expertise make such comments, because they reflect the classic error so many king-of-the-hill, incumbent businesses make, as is well documented and popularized by Clay Christensen in his treatise: The Innovator\u2019s Dilemma.\nThe incumbent business is so tied to its lucrative, cash-generating machinery that it turns a blind eye to any upstart or outsider that begins to encroach on the incumbent\u2019s territory. Oftentimes, the incumbent doesn\u2019t even notice the upstart, which is playing on the sidelines in the lowest, least profitable areas of the industry.\nWhen AirBnB began, it was a way for college kids to find a couch to crash on. Why would the hotel industry care about that?\nThe incumbent dismisses this and says: \u201cThat\u2019s not the important part.\u201d In reality, they are simply justifying doing things the way they always have done them. Why argue with success? If it ain\u2019t broke, don\u2019t fix it.\nWhat Buffet might be thinking is: What does a company that makes electric vehicles know about collision waivers, benchmark rates and personal injury protection policies? But what he should be thinking is: what does an auto company have that I don\u2019t?\nAnd, I believe, if he approached that question objectively, he would soon realize that Tesla\u2019s hidden gem is data: Lots of data. It has amassed millions of miles of user and sensor data that it is aggregating, analyzing and processing via AI (artificial intelligence) to provide continuous improvements to its vehicles and the overall user experience.\nThis happens to be Tesla\u2019s not-so-secret weapon against others in the auto industry. And here\u2019s the beauty about data. It is not beholden to a business, or industry. It can be applied nondenominationally to compete in other areas as well.\nIn fact, the depth and richness of data that Tesla has regarding its drivers makes the data that the auto insurance industry currently has regarding its own customers look like child\u2019s play.\nThis is the way the challengers upset the incumbent. They don\u2019t challenge the incumbent on the incumbent\u2019s turf.\u00a0 AirBnB was never about couches. It was about providing a whole new process for booking accommodations in an infinite variety of environments, which happens to include hotel rooms.\nUpstarts first put one toe onto the sidelines, then change the playing field, and then they change the rules altogether. They don\u2019t play the game as it exists. They disrupt.\nOnce the disruption happens, the incumbent is essentially paralyzed. It is locked into its machinery of people and processes, cranking out products and services the same old way. It must either sacrifice that entire legacy or risk fading away, losing more and more market share to the upstart. Change is hard, very hard, and sometimes impossible.\nIt\u2019s what happened to Kodak with digital cameras. It\u2019s what happened to Blockbuster with Netflix. It\u2019s what happened to Sun Microsystems when Dell and others commoditized desktop computers and servers. It\u2019s what Uber and Lyft are doing to the taxi and limo service industries, and, as noted, what AirBnB is doing to the hotel industry, and on and on.\nBuffet should look more seriously at outside competition. And while he\u2019s at it, he might want to scrutinize what is happening with emerging technologies such as blockchain, the distributed ledger system that has gained tons of notoriety via crypto-currencies, but has, perhaps, far more practicable application to industries such as insurance and finance.\nBlockchain might ultimately be a boon to the insurance industry. \u00a0It has the potential, for instance, to eliminate fraud, a $40 billion a year problem for the insurance industry today, according to the FBI.\nIt is also likely to disrupt virtually every aspect of every process that exists today. And once those processes are disrupted, a very handy opportunity for an upstart opens, an upstart that is unencumbered with the legacy of this is the \u201cway we do things around here.\u201d The upstart will then completely upset the traditional insurance industry with a brand-new way of \u201cdoing things around here.\u201d\nAmazon is the new Sears\nBezos, conversely, is predicting and even anticipating this disruptive event. In his comments to employees, he went as far as to compare Amazon to Sears.\nIt\u2019s hard to appreciate now, but Sears was the Amazon of its time. It was the paragon of retailing, right to the very tip of its landmark Sears Tower, which at the time of the company\u2019s apex, was, appropriately, the tallest building in the world.\nLike Amazon, Sears grew and grew. It had its own product lines for appliances, tools, and clothing. And then it ventured completely outside its traditional core business. It went into insurance, the brokerage business and real estate. It went into credit cards and credit card financing. And does anyone remember Prodigy? This was Sears\u2019s joint venture with IBM for an online service, long before the World Wide Web.\nThere\u2019s been lots written about the demise of Sears, but, at the risk of over simplification, Sears took its eye off the ball. With the massive holdings in so many adjacent industries, it did not react quickly enough to discount stores, factory outlets, WalMart and online retailing.\nAnd when it did react, it was too little, too late. It went from an attitude of \u201cif it ain\u2019t broke, don\u2019t fix it,\u201d to \u201cit\u2019s broke and we don\u2019t know how to fix it.\u201d Sears attempted to return to its roots of retailing, downsizing itself out of existence in the process. The rest, as they say, is history. A history that Jeff Bezos now tells us is inevitable.\nNow, the skeptic or cynic might be reading between the lines regarding the Bezos comments, since the timing was coincident with rumblings from the White House about possible anti-trust action against Amazon, Google and other tech giants. Amazon may also be next in line (after Facebook and Google) for the proverbial slap on the wrist from the European Union on charges of predatory pricing.\nAnd what Bezos didn\u2019t emphasize to his employees was just how disruptive Amazon has been and continues to be. The company, which started out with the goal of \u201cbeing the bookseller to the world,\u201d has taken over e-retailing, is making its mark in streaming video with Amazon Prime, in brick and mortar with Whole Foods, and it has essentially created and dominates the cloud computing industry with Amazon Web Services.\nBut Bezos is simply emphasizing that as rich and powerful as he and his company are, there is no one individual or company that is invulnerable.\nMoreover, he emphasized in his message to employees this cold hard fact: the pace of disruption is accelerating. The average life cycle of companies has decreased from 100 years to around 30 years.\nWhen you consider that Amazon was founded in 1995, you can easily do the math to see that his company is racing headlong toward its 30-year anniversary. Is his timing off? Maybe, maybe not. But consider some precedence in the matter:\nBlockbuster made it to the ripe old age of 28 years.\nScott McNealy, the CEO at Sun, used to quip: \u201cEat lunch or be lunch.\u201d\u00a0 Sun got eaten. It took about 28 years.\nThe pace is accelerating. No company or industry is immune.