Is Tech Change inevitable? Today’s technology companies can look dominant and permanent; is anyone going to topple Google, Apple and Amazon? But for anyone over a certain age living in the UK, Hoover was synonymous with vacuum cleaners, Bush with radios, Ferguson with TVs… and more recently Microsoft with software and Nokia with mobile phones. Facebook, Twitter, Google, Apple and Amazon are dominant now, but who remembers Myspace, and Yahoo. Of course, Yahoo does exist, but it’s not the dominant player it once was.
Why is this important? Well, it demonstrates that being a dominant player is a transient position that can easily be lost. For corporates (and investors) the message is that poor board decisions can rapidly destroy shareholder value, which has taken years to build. For start-ups the message is that there will be an opportunity, assisted by tech change – just be there at the right time.
The chart below gives a great demonstration of this issue; note that it shows market shares, not absolute sales. The ‘Others’ is almost certainly dominated by Nokia. A company not killed by bad M&A decisions but by failure to ‘look out of the window’*. Whilst Nokia was focused on developing mobile phones with a battery life extended to several days, and ever decreasing phone size, its new competitors were introducing smartphones and App marketplaces. Microsoft was still trying to push the Windows OS when it was clear that more open and flexible mobile platforms were going to win.
Nokia isn’t dead, but it’s not a mobile phone company anymore – see Where in the World is Nokia now?
* ‘Look out of the window’ was a phrase used in an article I read at the time of the ‘dot com bubble’. It described the behaviour of executives – just looking inwardly and failing to observe the broader market and economic developments. I think it sums up the behaviour very well.