Even for global technology leaders like Apple, which just crossed the $1 trillion threshold in terms of market cap, staying on top is not a given. There are countless challenges to all the tech leaders and the technology industry is extremely nimble and fast moving. There are no guarantees that today’s leaders will be the ones we look up to in a few years from now. There are many examples of great high-flying tech companies being wiped out and forgotten. Read on to learn more about the challenges of staying on top in the technology market.
Some challenges every tech leader must deal with
These pointers are for Apple as well as for other tech giants in their respective fields or product specialisations.
Speed of change
Changes in the tech industry, they say, happen at the speed of light. Or is it the speed of lightning? You may be a leader in some tech products for a few years and presto, an entirely unknown startup comes on the scene and takes a huge bite at your market share!
With this speed of competition, a leader in the tech industry must display rare agility. This agility must be reflected in the approaches used by the company in making and delivering its products and services.
Ideally, it takes an average tech company anywhere from 2 to 5 years to research, design, manufacture, and release a new product. Today, some high-speed companies can churn out products every 6 months that can, in principle, rival those manufactured by other prominent tech companies. As a matter of fact, timing is the new agility, just as Facebook’s Mark Zuckerberg is found of saying, “move fast and break things.”
High risks, high stakes environment
Due to the brutal competition, a significant industry player can be rendered irrelevant if something new and impactful pops up. Some up-and-coming tech out of China and South Korea are giving U.S. players some sleepless nights. Xiaomi is tackling Apple head-on; Alibaba is competing hotly with Amazon.
Also, because tech is ‘invisible’, it’s somehow difficult to gain visibility and keep track of what the competition is doing. Sometimes, two or more companies may be working on a similar, competitive product types and release them simultaneously. This invisibility makes tech appear like a backend service/product. It also complicates the process of explaining its benefits or usefulness to investors/ consumers. Similarly, the process of building a technology infrastructure is also ‘invisible’—because people cannot see it being built even though it is. Thus, it can be difficult to demonstrate/ convince investors that it is going to be a large-scale, beneficial operation.
There is also high risk, because there are low barriers to entry for tech right now. An entirely new company or a startup can cause a ruckus in the industry if it releases products or services that offer better usefulness than those already in the market. Nowadays, products can be made within a short period of time, from ideation to the final distribution because of the technologies offered by companies such as Temasys that streamline communication. A tech newbie can easily build a Zoom-like application on top of pre-built infrastructure without spending a lot on it.
The high risk in tech also means high reward — a tech startup can suddenly blow up and earn millions of dollars. Setting aside disruptors like Uber, Airbnb, and Instagram that went from unimaginable business ideas into billions of dollars in valuation in a less than 5 to 7 years of operation, there are other examples of newbie tech companies making it big in their respective areas of the industry. Some of these companies like Storm8, Vente Privee, and Living Social, which are not household names, have all amassed millions in no time.
Accepting the status quo
Being a leader in the tech, at times, requires learning to live with never being up-to-date. The tech industry is always changing, and it is not negotiable to sacrifice quality for expansion or even profitability. MySpace, Friendster, and Second Life were all holding the fort before Facebook came onto the scene and drove them into oblivion. Though the three social media platforms are still in operation today, they would have stretched themselves too thin trying to upstage or catch up with Facebook then. They didn’t have the trendy explosion that Facebook was witnessing, powered by an army of youthful early adopters.
Valuation or product-longevity might crown a company as a leading tech beacon, but the number of challenges such a company has to contend with is innumerable. While Apple continues to hold its own in smartphone technology, Amazon in e-commerce, Microsoft in enterprise software, the question remains the same: What will these companies do to ward off or at least survive a tornado or tsunami of inventions that may make their dominance in the industry evaporated with minimal warning?
Unfortunately, no one has a convincing answer to this million-dollar question! If they do, why didn’t companies like Netscape, America Online, RealNetworks, and all other dotcom-era businesses overcome the lethargic growth they had experienced, which ended up in their demise or bankruptcy?
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