Business Darwinism
Here’s a warning for those who deny that nothing lasts forever, and a strategy for those who choose to accept the premise.
Evolution is the perpetual process of finding an optimal local fit in a ever changing global environment.
Business is a vehicle that finds a best local fit between suppliers and demanders in a world of ever changing supply and demand constraints.
The global search space changes without correlation of our own actions.
When the global search space changes, previously optimal fits are no longer necessarily optimal.
Given that the world is forever changing, business therefore has a limited life span.
The lesson: Learn about some small area of the global search space, build a best fit for that local space given the current environment, adapt where possible but don’t go down with the ship due to exogenous factors.
Here’s an example, substituting the above generics for real life businesses.
Evolution is the perpetual process of finding an optimal local fit in an ever changing global environment.
Blockbuster is a vehicle that finds the best way to connect movie distributors with movie watchers in a world of ever changing viewer desires and distribution technology.
Movie watcher desires, and video distribution changes without correlation to Blockbusters actions. Such as the birth of the XBox and the boom of piracy via the Internet.
When the watchers start playing XBox instead of passively watching movies and technological advances such as the Internet change the game for distributors, Blockbuster in not necessarily the optimal fit.
Given that movie watcher desires and movie distribution are always changing, Blockbuster as a DVD rental company, has a limited life span.
Tags: philosophy business
