Planet of the Apps

Old ideas for managing new technology.

Your business is ticking along nicely. Out of left field a low-cost start-up zooms into your market and starts picking off customers. They’re small, so they can cherry-pick. Their cost base is low and they undercut you. They sell via an app that’s soooo easy to use and they outsource delivery to a logistics firm that gets the product to the customer quicker than you can.

Welcome to the digital challenge.

It is hard to think of an industry where this isn’t happening. For many managers it’s overwhelming. Wherever they look, everyone is talking digital delivery on mobile devices. The sheer breadth and scale of new technology can be threatening. It’s constantly changing. How do you cope?

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Planned prosperity Vs lucky breaks

Googling Good Fortune.

In 1999, Sergey Brin and Larry Page took their fledgling product to George Bell, CEO of established search engine, Excite. Wishing to realize the value of their startup, they offered him Google for US$1m. Bell was unexcited, even when they dropped the price to US$750,000.

Both sides made bad decisions: the young entrepreneurs wanted to sell too much too soon; the potential buyer didn’t see the potential. For Brin and Page, it was one of their luckiest setbacks. For Excite, it was a missed opportunity. But that’s only with hindsight. Neither could have forecast the future.

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Startups and the Art of Surfing

The right wave helps

Startups remind me of surfing. That was my preferred activity after getting my first board on my fourteenth birthday. It was a great individual sport. There were no coaches or surfing schools. You just paddled out and started working on it.

I had reasonable balance but soon learned that wasn’t all it took. When you watch a pro surfer make it look easy, it’s not just their athletic skill that’s on show. What happens before you even get on a wave matters a lot. 

Four things can make a big difference

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Instagram: The Entrepreneur's Dream

A Kodak moment for mobile apps.

It’s a story for these times. Young geek collaborates with Silicon Valley network to build simple but popular product. Engages customers with social media to get rapid market traction. Risk-taking venture capitalists provide cash while user base grows to 30 million customers. Within two years, with a total staff of 13 and zero revenues, the business is sold to Facebook for a billion dollars.

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Recycle the cycle

More work for your think tank 

The Great Recession was a great reminder on one great fact: the business cycle is not dead. There have been about ten recessions in my lifetime – one about every five to six years. Get used to them. If you are 35 now, expect another half a dozen before you retire.

There are a few other cycles we should also be aware of. There’s the life cycle of your products. They don’t remain fashionable forever. There’s also the life cycle of your business. It might begin as an exciting start-up. If it doesn’t crash and burn, there is a good chance it will evolve into a mature entity. But if it is like most companies, eventually it will go into decline.

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