Sunday, April 10, 2011

The Breath of Business and Success

Watching and understanding the cycles of "life" in business are keys to longterm success.

Ok, this might be a little esoteric, but if you go with me for about 5 minutes, I think you'll get some benefit from the discussion.

In thinking about what I wanted to write this week, I was looking at the current activity in our industry.  There are new companies coming online and old companies jumping into new businesses.  Everyone is investing  money and energy in an effort to grab pieces of emerging markets.  The two most obvious examples are streaming and tablets.

In the wake of Netflix' success, there are dozens of companies scrambling to bring content directly to consumers' TV's and other devices.  On the content side, Netflix is the clear market leader, Hulu appears to be the market challenger, and there are a number of market followers still hoping to move up and challenge the leaders.  On the hardware side, AppleTV, GoogleTV, Roku, TiVo and others all have their oars in the water.  The important point is that a growing number of companies are still vying for parts of these markets.

The same pattern is present in the tablet market.  Apple's iPad is the dominant market leader, Motorola's Xoom appears to be the current market challenger, and there are a large and expanding number of market followers (some of whom might become the market challenger, like Blackberry, for instance).  Again, the point is that more players are still coming into the space.

This current phase of the business cycle is the equivalent of these markets taking a deep breath.  It is a period of expansion when resources are poured into the marketplace and everyone scrambles to claim the new spaces that are created.  But as all living beings know, every deep breath is inevitably followed by an exhale.  If living beings only inhaled, they would never release any waste, and they would die.  This is true in business, as well.

When markets exhale, it doesn't mean that they are dying or becoming weaker.  Exhaling is healthy.  The market, and the companies in that market, actually become more efficient, gain strength, increase profits and improve operations during that period.  The "exhaling" period of a market is characterized by mergers and acquisitions, where the larger players absorb the healthy smaller players, and some closures where the weakest competitors simply give up.  But even the closures are healthy as it means that the remaining companies can expand further, making them stronger and more profitable.

Ok, so what's my point?  It's this: you can't plan for the present; you can only plan for the future.  If you are in a position to participate in this period of expansion, by all means take advantage of it.  But if you are planning for the future, watch the market breathe.  Recognize that it will inevitably exhale, and position yourself to take advantage of the circumstances that will exist at that time.

Every moment is a moment of opportunity for those who recognize it and are prepared for it.  Whatever business you're in, or want to be in, watch it as it breathes and be prepared when the next breath comes.

6 comments:

jindi said...

Naruto Shippuden 209 n Naruto Shippuden 208 we see Karin reviving Sasuke in the dark place inside Madara. Madara takes them out to face Danzo. Sasuke blinks to activate his ocular powers. Danzo getting ready for the fight, unwrapping his right arm proclaims: "Sasuke, madara, I'll take both your Sharingan." Sasuke wants to know if Itachi eliminated his Uchiha clan by the order of Elders in Hidden Leaf.

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Artificial Grass said...

I think the current phase of the business cycles in the equivalent of the markets taking of the deep breath.It is the period of the expansion when resource are poured.It really interesting article.

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