It imperils not just the old companies who fail to innovate, but also the new enterprises that, while cutting edge, never master such quaint yet important concepts as revenue, profit, and realistic business plans. While the dot com carnage of 2000 has been breathtaking at times, many titans of the old economy have had their problems as well. From an investor s standpoint, even companies doing very well names like Home Depot and Intel spring to mind are not immune to the instability characterizing the markets these days. And as we ve seen time and again, billions of dollars worth of market capitalization can suddenly disappear in response to just mildly bad news. This has obviously been a big year for mergers and acquisitions.
Size is certainly an interesting issue today, and so is speed.
On the one hand, the ability to innovate, and bring the fruits of your innovation quickly to market, has never been more important. On the other hand, the half life of any innovation seems to get shorter every day. Ironically, the technologies revolutionizing business in the year 2000 seem to be shortening their own window of advantage, and making it easier to play catch-up. Conceptually speaking, size and speed combine to create power. If you re fast but too small, you might recognize opportunities, but not be able to do anything about them.