The Power Of Being A Small Firm
Without question, Silicon Valley’s mantra is simple: Change or die. These words are embedded in the culture throughout the San Francisco Bay Area and the technology it creates. Change is inevitable. Resisting change and you are no different than a dinosaur yelling at the meteor as it rushes across the sky. Why do we have change? Companies change because people change. The most successful firms invest heavily in the understanding of people. Both externally and internally. Their culture fosters an atmosphere that focuses on people.
Investing in change can be very costly and time consuming however all the most necessary for firms. Silicon Valley ceded their mantra because the rate of change in technology has a higher velocity than other industries. 3 weeks in tech can be the equivalent of 10 years in auto industry or many others. Being ahead of change works as a catalyst for cementing a position in the market. A familiar term in tech is known as “First Mover Advantage”. This where a firm being the first arrival to a segment of the market gains a significant foothold and competitive advantage over resources and control of the market. This will typically strengthen as the momentum of user adoption increases. There are 4 types of change agents — Market Leaders, Faster Followers, Cautious Adopters, and Laggards (ref: “Disrupting Digital Business” 2015 author: R “Ray” Wang). Out of these 4 tiers, there is one attribute that sets the Market Leaders from the rest of the group: Vision. Vision allows for thinking creatively. In order to create and innovate, we have to think outside of the constructed framework guiding the market. We have to come to a place of deep thought and action.
Historical analysis can be so overlooked in predicting the future. Some of the best stock traders adhere to a strict fundamental set of criteria when accumulating visibility into a particular stock. Many of these traders rely on historical analysis to gain best results and probabilities of stock movement. The same mindset is often forgotten in big business. Many times in the past we have seen companies and empires fall because of over confidence and pride. One of my favorite movies about Microsoft and Apple is called “The Pirates Of Silicon Valley”. It was released in 1999, before Steve Jobs made a massive comeback and positioned Apple for what it is today. However, it is laced with many good scenes and valuable wisdom showcasing the importance of change and vision. One of my favorite lines in the movie is spoken by Bill Gates character played by Anthony Michael Hall, “Success is a menace, it fools smart people into thinking they cannot lose”. Wow. First time hearing that I was so taken back. As years have gone by, this quote has aged well like a fine wine.
Sears once said “Walmart is too small to be a threat” As Sears filed for Chapter 11 bankruptcy, I couldn’t help and think how missteps in change and execution frequently leads to the demise of firms. Confidence has many benefits, but when it allows delusion to manifest, it can be the stone that took down Goliath. The timing of change coincides with vision. Farmers have vision, they know the weather will change, they work and prepare accordingly . The same with Market Leaders, they know the season will change and the wheelhouse will turn. Being small and hungry can establish the most important roots and core values that allow your company grow and flourish. Small companies can execute change at a much higher rate. They can mobilzie and adapt quickly. Their resourcesfulness gives them meaning into every decision made. Everything is valued and measured.
Balance of power in an organization with a periscope focus into consumer behavior, patterns, and market research could potentially enable a method for adaptation and leading markets into change. They should always be aware, just like a prospering country during peacetime, someone hungry and capable wants it as much as they do.
