How Digital Trends Affect Investment in New Media Models
Like plants and animals in nature, businesses must constantly evolve, or suffer stagnation and possible collapse.Do you remember 3D TVs? Once touted as the wave of the entertainment future, 3D is now about as exciting as paint drying. Irritating glasses and side-effects like headaches and nausea have pushed people away from the once-exciting medium -- for televisions, 4K resolution is the new frontier.How did such a popular technology suddenly become obsolete? Evolutionary biology could give us a clue. Plenty of animals, like the wooly mammoth and giant sloth, were humongous and intimidating, but died out because the fundamental flaw of evolution: they moved too slowly.
Business, Biology, and Bandersnatches
Noted biologist Leigh Van Valen developed what he called "The Red Queen Hypothesis" in 1973. In Lewis Carroll’s Through the Looking-Glass, the Red Queen explains the nature of Looking-Glass Land, telling Alice, “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"Van Valen took this quote and formed a hypothesis of evolution around it: in order to survive, organisms must constantly evolve, and to thrive, they have to evolve faster than the organisms that surround them.Business works in a very similar way, and leaders who don’t follow the advice of the Red Queen risk going the way of the wooly mammoth. No matter how big a company is, simply maintaining the status quo will leave it stagnant and vulnerable to massive shifts in the business climate.In order to remain competitive, firms must build, maintain, and defend their differentiating value proposition. Big organizations are seeing more and more pools of their core business slurped up by smaller, more efficient, and more innovative companies.
Growth in Madhatter Weather
If a firm wants to grow like Alice in Wonderland, they need to make innovation a priority. It takes a tremendous amount of effort just to remain profitable, and growth requires working twice as hard. Companies must pay extra attention to business process improvement, innovation, and appropriate internal and customer-facing communication.While the advent of digital has been a boon to startups, it has forced traditional companies to rethink their entire business models. Television channels, once the bastion of unretractable revenue, are now exploring subscription models like HBO's, thanks to YouTube and Netflix stealing their viewer base. As quickly as one innovation becomes popular with consumers, another old, outdated one falls by the wayside. In the digital age, this process happens much more quickly, characterized by sudden thaws and cold snaps instead of global warming or ice ages.If traditional firms are to compete, they need to keep a close eye on digital trends and benchmark themselves against the competition. Monitoring digital trends is just the first step to helping them better understand what potentially disruptive innovations are about to revolutionize their entire industry. Oftentimes, monitoring trends will help drive business transformation.Whether business transformation is revisiting an old business model, implementing a new one, or just infusing a more digital sensibility into the current framework, firms now must run twice as fast to get anywhere. And the last thing they want is to find themselves checkmated by the Red Queen.