For Mature Companies Only – Part One

Commander #1:  We’ve analyzed their attack, sir, and there is a danger.  ShouldStar Wars I have your ship standing by?

Grand Moff Tarkin:  Evacuate?  In our moment of triumph?  I think you overestimate their chances.

From the movie, Star Wars

This is the first of a two-part blog – it focuses on why mature companies should be concerned about startups playing in their space – “disruptive technologies” as it is often called.  The second part (what to do about it) will be covered in my next blog.

I had the chance to spend some time on this topic at our Client CPE event late last year.  I see the issue arise constantly with my more mature clients – yet, some seem oblivious to it much like Tarkin felt about the Death Star.  So, let me provide you with a few ideas to whet your appetite:

  1. This is not just technology, so you have to wake up.  It is not AOL buying “then media giant” TimeWarner in the dot com boom.  This is Chobani, figuring out a way to market a food staple in a different fashion and in 5 short years, becoming the industry leader.
  2. The age of innovation is here.  Remember, startups seek to be a disruptive force.  They focus on changing customer behavior in big markets, especially basic products.  Few industries or businesses are immune – especially if your product involves a recurring purchasing pattern in a large market.
  3. Competition may not be coming from the obvious place – your industry.  Do you think Borders or Barnes and Noble were focused on Amazon as competition when they sought to expand in the 90’s?  This disruptive approach seems logical – a new approach to a market coming from someone not blinded by the way things are today.
  4. Disruptive technologists focus on challenging major assumptions.  Many of us grew up in an era where floating your resume was a risky proposition – your boss might find out and fire you.  Today, we have the equivalent of our CV’s posted on LinkedIn and we can now look to hire someone who is currently employed versus searching through resumes of those looking for their next opportunity.  Our bosses are not only aware of it – they encourage it.  This is the famous “paradigm shift.”
  5. Finally, there is money… lots of money… in the billions sitting on the sidelines waiting to fund the next disruptive force.  Startup entrepreneurs are working every day to study their markets and refine their pitch to investors – much like mature owners honed their sales pitch in the early days of their careers.  And, they do so with the same level of intensity and tenaciousness their predecessors had when they formed their business.

All of this sounds a bit ominous, but it doesn’t have to be.  The mature business has a number of real advantages and with an approach that takes into consideration this changing landscape, they can retain their position of leadership and continue to grow and prosper.  But, you will need to read my next blog to find out how.

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