While Google and Yahoo are developing their chosen niches with major acquisitions, Microsoft’s credo of staying lean could set them apart—at least for a while. But just like the rise of Apple, arguably one of the leanest, best-positioned tech companies to weather the coming years, the winner will be whoever lands on the product that defines the next new market, as the iPhone changed the landscape of personal technology. What that will be is anyone’s bet, and it could be discovered by a team of 10 just as easily as 10,000.
Bill Gates’ Internet Doomsday Prophesy Comes True
The paragraph above is part of a pretty sobering article. It describes Microsoft’s decision to lay off 18,000 employees. Here’s a little more from the article:
In today’s letter, Nadella repeatedly emphasizes words like “agile,” “efficient,” and “lean.” The latter in particular has become a buzzword for Silicon Valley start-ups. The “Lean Start-up” is a business philosophy created by entrepreneur Eric Ries that prizes “bootstrapping”—that is, taking as little venture-capital funding and operating with an eye toward as much profit as possible, as soon as possible. Bureaucratic overhead is bad, and that’s exactly what Microsoft has too much of.
In an infamous, prescient 1995 memo, founder Bill Gates wrote, “The Internet is a tidal wave. It changes the rules.” Previously, the company profited from that change. Now it’s finding itself on the wrong side of the wave.
I went back and revisited the book The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries. Here are a few key excerpts from the book:
The first problem is the allure of a good plan, a solid strategy, and thorough market research. In earlier eras, these things were indicators of likely success. The overwhelming temptation is to apply them to startups too, but this doesn’t work. Because startups operate with too much uncertainty…
As the world becomes more uncertain, it gets harder to predict the future.
Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. Startups have neither.
So… Microsoft, after buying a company or two, and discovering that not everything worked out as well as they had hoped, now lays off many thousands of people, and wants to function more like a “lean startup.”
And, for all of us, we are increasingly aware that the next breakthrough may come from an army of innovators within a larger company, or a very small group of techies scrambling to turn their idea into reality in some garage somewhere. (it could be discovered by a team of 10 just as easily as 10,000.).
Here’s what I am learning, just a little too slowly. We work hard, but someone can come up with the next new, new thing, and put everything at risk in a heartbeat.
So, we do what we know to do for now as well as we know how, but we keep thinking about, and working on, the next thing… always the next thing. We are on a current “tour of duty,” but it has an end date. (We may not know the end date yet, but it very likely has an end date). The next “tour of duty” could be dramatically different.