Geoffrey Moore explains why big tech companies struggle to shift resources from profitable legacy products to new ventures. Internal resistance kills most new initiatives before they reach 10-20% of revenue. He cites Borders, Microsoft, Yahoo, and Google as examples of firms trapped by their own success.
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This notion of the problem of we're stuck and it just, I have to say, it's virtually universal. People kind of get, look, we have a successful franchise, but you can't stand still in tech. Between technology and globalization, things are really, really moving now. That's great news for opportunity, but it's also for people to stand still. It's a threat, as our friends at Borders, for example, have discovered this year at numerous other companies. So everybody gets that they've got to engage with growth. It's not like, hey, I've got an idea for you. Right? They got it. What they don't like talking about, which they universally acknowledge, is there is massive internal resistance to moving resources away from established activities into new activities. Massive. And so that's kind of like the innovator's dilemma idea, you know, the anti corporate antibodies, that kind of stuff. So we've talked about it for a long time. We haven't been very good about doing much about it. So year in, year out, the experience is, man, it's Windows again, it's Office again, it's routers and switches again, it's direct display advertising for Yahoo again. Even if something is young and as vibrant as Google, why did Larry Page come back in? I think Google's beginning to feel like we need to escape. We're only 10 years older, barely 10 years old. We need to escape from the pull of our past. So the problem is the new stuff. It's not that there's not new stuff, there's tons of new stuff, but it doesn't ever reach materiality, meaning it never reaches like being 10 or 20% of the total company's revenue. It gets announced, it gets started, and then somewhere along the line it dies on the vine.
