Why Did Business Change?
This article is written by Nardine B. M’barek, a Contributor Author at Startup Istanbul.
It is very obvious that business and entrepreneurship changed from the way it used to be before. As mentioned by Mr. Sam Mallikarjunan, the average lifespan of a big company on the Fortune 500 list used to be 75 years. Meaning that a company that makes a huge amount of profit and revenues could remain in the top for up to 75 years!
However, in recent years, this average lifespan declined and continued on declined until it reached only 15 years. That lifespan will probably go down a little bit further in the near future until it reaches just 5 years. From 75 years of being on the top to only 5 years. Which means that in only 5 years time, a company could be one of the biggest ones and join the top 500 ones on the Fortune list, but could also fall down and lose its spot on that list as well easily.
The real question is why and how did all this happen? As Mr. Sam Mallikarjunan stated, it is mainly because of the change the occurred in the fundamentals of work that we knew before. Work became harder, more stressful, competition has gotten harder and very tiring. What is worrying for those companies is the change that happened to the way people connect.
In the past, companies used to remain up to 75 years on the top of the Fortune 500 list because there was no one there to take their customers and somehow ‘eat their lunch’. However, things remarkably changed now. Thanks to the revolutionary invention of social media and the internet, the way people connect with each other became very fascinating. Billions of people are connected together, and talk every hour. Which means that while you are sleeping, someone else with an idea more interesting and innovative than yours could be stealing your customers somewhere else.
You are competing with everyone, everywhere, every minute of the day, and that is what changed business so far. If you are not ready to work really hard in order to gain your customers’ trust and money, then someone else is ten times more ready than you are to do that. There is a very interesting research done by John Hagel that shows how the nature of how we do businesses change.
It used to be easier when people had innovative ideas and solutions for issues that existed, and could just nail their companies, of course after a crazy amount of hard work. Now because of the change in the way we work, the value of that knowledge is down from let’s say 20 or 30 years or even more, to just 5 years. In 5 years, even if the thing you created or invented was profitable, it is time to do something new. Interestingly, this 5-year research matches perfectly with the future lifespan of a company on the 500 list, which is also 5 years. Now things have changed and new different ways are out there for everyone.