I caught this one yesterday on Medium: Culture Eats Strategy for Breakfast. It’s by Dare Obasanjo on Hacker Daily (great title, by the way). It’s a well-thought-out discussion of how Google and Facebook culture achieved a substantial shift of strategy in a way that others (Blockbuster facing Netflix, and Blackberry facing iPhone) couldn’t. Here’s the summary.
“when your strategy changes then your entire organizational culture will have to change as well. Your organizational culture is defined by what positive behaviors you encourage and what negative behaviors you tolerate. Blackberry couldn’t compete with Apple when teams were still motivated & rewarded for keeping corporate CIOs happy and there was no way Blockbuster could compete with Netflix when they fundamentally saw themselves as a classic retail video rental store and ignored the power of online experiences.”
That’s a good read. Dare collected details and presents them very well. There are some stories of interest there.
And it challenges an assumption that I’ve made for decades now, which is that large businesses are doomed to fail eventually because they become like big ships, unable to turn quickly, unable to react. I’ve seen IBM fall from the “Big Blue” industry giant of the 1970s, 1980s, and 1990s to another also-ran today (no offense, IBM). I’ve seen Microsoft fall from the king of the world in the middle-to-late 1990s to struggling to keep up today.
It seems so hard for big tech companies to sustain growth rates when sales run into the billions. Although this post argues against it, I would have thought that Google, Apple, and Facebook will eventually slow down because they are so big. But maybe not.
I’ve never been an employee of a big (thousands of employees, maybe tens of thousands) company but I’ve deal with them as consulting clients. What I thought I saw was that as they grew, middle managers and office politics took over, regardless of what top management wanted. Decision making slowed to a crawl, and the friction through the chains of management became impossible. The culture changed in ways top management couldn’t prevent. Go to an exciting startup and people are working at all hours. Go to a big company and they left at five. Or so it seemed to me.
Can Google, Apple, or Facebook buck that history? Are big tech companies doomed to decline. Live by tech, die by tech? Do they become too big not to fail?
People ask me often what kind of business to start. Usually I say something like “look in the mirror,” continuing with how the best business for you has to reflect who you are and how you’re different. But here’s a new thought for you: choose the market you’re going to disrupt.
This isn’t for the sandwich shop, graphic arts business, dry cleaner, or new restaurant. It’s for the rarified air of the big bang startup. What market doesn’t work? What market can you radically change?
If your new business blows up an old market, then you really matter. Think of Netflix, amazon.com, Google, Hulu.com, and other big winners. ZipCar. Expedia. Twitter. Facebook.
In every one of those cases, somebody applied a new way of thinking to an annoying old way of doing something.
I heard it yesterday from one of the smartest and most successful people I know, my son Paul, CTO of Huffington Media Group:
“I’ve seen the way smart investors work. If it’s a team they believe in, and they focus on a market to disrupt, it’s going to work. They’re going to get going, change it often, and make it work.”
The next big thing is never a repeat of last big thing. It’s always something new and different. It’s an original, not a copy.
What if the next Facebook already happened, and it was Twitter? What if the next Netflix already happened, and it was YouTube.
I see this a lot in business plans: businesses out to become “the next this” or “the next that.” Among the recent ones to cross my desk were “the Netflix of books” and “Facebook for business.” Yawn. Boring. Unrealistic. Copies are so unoriginal.
A tag line referring to some existing big thing (“Netflix for books“) rarely works.
Home movie rentals: up during recession. Netflix, Redbox and others are way up over last year. From The Atlantic.
Urban farming: More people grow their own food during recession. “The National Gardening Association has found that 19 percent more people will grow their own fruit, berries, vegetables and herbs this year than last, and 54 percent say they are motivated by the prospect of saving money on groceries.” From Kiplingers.
McDonald’s sales: apparently cheap meals do better during recession. McDonald’s same-store sales are up 7.1%. From the Washington Post.
Going to the movies: normally up during recession. Up 9% for the first quarter of this year, compared to 2008. Kiplinger.
The underwear index: sales of men’s underwear go down during recession. Economizing? They’re down 2.3% for 2009. Huffington Post, quoting Alan Greenspan.
Dating increases during a recession: Match.com is way up. Kiplinger.
The necktie index: sales go up during recession. Job interviews? They’re up 50% this year. From The Telegraph.
(Ugh, I don’t like this one) New York Magazine proposed the hot waitress index: “the worse the economy, the hotter the waitresses.” That’s dumb. It shouldn’t have been included.
Lipstick index: supposedly lipstick sales go up in recession. Affordable luxury? But they’re down this year. The Economist.
The Bed Bath and Beyond Barometer. Proposed by Time Magazine. The explanation is that consumers who can’t go out or away upgrade their home. Ho-hum.