The world has changed in the last 10 years. The rate of technological development has rocketed — in part due to the high number of working engineers, the boom of the internet and self-perpetuating human empowerment which has resulted. The outcome of this rapid change has caused a fracturing of the traditional business model and the rise of the niche mega-market solutions.
Conventional business has been a strong proponent of the idea of managing through processes and control in order to convert chaos into order. Historically this has been very effective as it allowed efficiency and overall risk management. In an environment which is “evolving” very slowly this works wonderfully. Add to this an overwhelming control that mass media has previously provided businesses and it becomes obvious why enormous corporations have the largest share of global wealth.
The world has however changed. The highly predictable environment of the past has been replaced with a highly volatile equivalent. Conversely, the highly connected nature of the world has resulted in generous markets for very niche solutions — take Instagram as an example. It has a narrow target market yet it has successfully engaged that market and become one of the fastest growing businesses of all time. For corporates and big businesses built on their ability to apply control, this level of uncertainty presents a considerable challenge.
In contrast we’re seeing enormous growth in the number of individuals who are choosing entrepreneurship as a viable future. We’re also seeing many of these individuals growing highly profitable businesses in very short amounts of time — a rate that was previously thought impossible. Google’s meteoric rise is prime evidence for this. These are businesses that are nimble, that hold their consumers as their god and, through this unrelenting focus, have become gods, in their own right, to their consumers.
Within this nimbleness lies the strength of entrepreneurship and the weakness of big business. Big businesses are set in their ways. They are, by all accounts, crystalline. Their system has an enormous inertia to overcome change. This causes a delay. As a result they need to be very sure of a strategy before committing to it. But in today’s climate it’s increasingly difficult for them to spot those long-term opportunities and even more difficult to get there before a bunch of smart, committed and (literally) starving entrepreneurs get there first.
With any dramatic change (as with the information age) the core assumptions that govern our world change. On an evolutionary level, a change in temperature causes a change in the makeup of the species that thrive in that environment. Similarly some creatures are ill-equipped to perform and their population slowly declines. When this change is fast some gain substantial advantage and many others are made extinct or suffer a significant population drop.
While corporates and their old declining industries that they control will continue to rule the roost there is a compelling view that the fluid, lightweight and nimble world of inter-coupled small businesses will continually erode this position. I therefore propose that this will continue until such a time as the fundamental assumptions that govern business yet again settle and allow for crystalline structures to enjoy high levels of certainty.
Fundamentally, the system/creature/behaviour that evolves the fastest to best meet the environmental need will always win. Anything that doesn’t evolve is doomed to spending the rest of its life becoming irrelevant as the environment moves away from them faster than they can keep up.