Apple and the iPhone

When Apple launched the iPhone in 2007, the iPod was its best-selling product and a symbol of its comeback from near-collapse. It was not a business in trouble; it was a business at its peak. And Apple knew the iPhone would gut it. Steve Jobs reportedly told his team that if anyone was going to cannibalize them, it should be them. iPod sales peaked shortly after and declined for years, while the App Store and a services business that didn't yet exist grew into tens of billions.

The hardest moment to walk away from a product is when it's still winning, which is precisely what makes waiting so dangerous. This case puts founders in the seat where the obvious move and the comfortable move point in opposite directions. It sharpens the call on when to disrupt yourself before a rival does it for you, and it stops short of telling you how Apple knew the timing was right.