A respected professional, Chris Knudsen, said something to me a couple of months ago which I have reflected on several occasions since that event. We were discussing a business which has amazing, break-through technology using a wide-open market area. Their leadership simply does not appear to be in a rush to seize the chance. They are growing at about a 7 percent rate during the first ten months of 2009, which isn’t bad in slow economic times, but they may do so much more. They had been treating their business like a “lifestyle” business, but Chris said there could be no such thing.
Before I jump too far into this idea, let’s be sure we’re on the same page about what a “lifestyle” business is. In essence, it’s a company that’s not designed to grow much beyond the means or capabilities of their creator (s). A tiny auto-mechanic store or a 5-chair beauty parlor could possibly fit this definition together with countless other businesses around the world. These businesses don’t take a lot of danger, where applications and technology businesses have to continue to risk everything with every change in the technological market. By way of instance, the iPhone has been around for less than two decades, yet if your software doesn’t have an iPhone program, you’re considered archaic.
Now, let’s return to the software business. The owners are running it like a lifestyle business. They aren’t in a rush to grow, and they’re taking just some of their comparatively minute profits and investing them back into improving their technology and infrastructure. They have very little sense of urgency in earnings and they’re delighted to bring on a couple of new accounts monthly. Let me repeat – they have amazing technology that could completely redefine their entire sector. However, if they don’t act quickly, they’ll lose their chance.
Technology is changing at light speed. Every software company has a window of time to make their jump and make a run in their own market. If they wait too long or become too complacent, they’ll miss their chance. Concerning a lifestyle business, if they only rely on their own way and they don’t pull the resources together to take advantage of the chance, they won’t just miss the chance but they will probably be out of business within five years or less.
Technology is changing too fast and they won’t be able to keep up. The competitors will eventually make their way through the window of opportunity although their technology is poor and they under-serve the requirements of their clients relative to the provider’s technology. These competitors will be rewarded with sufficient money and resources to adapt and stay ahead of the changing technology.