WHY YOUR COMPANY MUST BECOMEA TECH COMPANY -APPLE, AMAZON, FACEBOOK, INSTAGRAM LESSONS Anneli R.
Article by Adam Hartung Link to: http://www.forbes.com/sites/adamhartu ng/2012/04/14/why-your-company- must-become-a-tech-company-apple- amazon-facebook-instagram-lessons/3/
We now must realize that value is not created by what accountants have long called “hard assets” – land, buildings and equipment. In fact, the 2 great U.S. recessions since 2000 have demonstrated to everyone that there is no security in these. Land, building and other “hard asset” values can decline, decline fast, and decline far. They can easily be worth less than they cost to make – or own.
Successful competition in 2012 (and going forward) requires businesses know about customers, products and have the ability to supply solutions fast with great reach. Winning is about what you know, knowing it early, acting upon the information and then being able to disseminate that solution fast to those who have emerging needs.
From agrarian through the industrial tothe new information economy Three hundred years ago the world’s wealthiest people owned land. In an agrarian economy, where most human resources. But then some 120 years ago along came the industrial revolution. Suddenly, productivity rose dramatically by applying new machines to jobs formerly performed by humans. Sometime in the 1990s the world shifted again. Companies that can drive new levels of productivity via the creation, management, use and sale of information can create enormous value
Going forward... No company can plan to survive with an industrial strategy. That approach, and those rules, simply don’t create growth – or high returns. Every business must shift, or die.
To be successful you MUST become atech company... You must be expert in understanding the information needs of customers, and how to supply information solutions that have high value. And while this may not feel comfortable, it is reality.
Retail is no longer about location orinventory. There has been some incredible shift that has happened in retail. One of Americans largest retail Sears has still enormous amounts of land and buildings but value of Sears is only $6B (1% the Apple value) despite all that real estate! Yet, Amazon – which has no land, and almost no buildings – has used the last 20 years to go from start up to an $86B valuation – doing much better for shareholders than its traditional, industrial thinking competitors. In the last 5 years, Amazon’s value has roughly quadrupled!
Apple Apple is telling everyone – globally – that there has been a tectonic shift in markets. Recently Apple’s value peaked at $600B This astounding valuation causes many investors to be reticent about owning Apple shares, for it seems impossible that any one company – especially a tech company with so few employees – could be worth so much.
Facebook and instagram Lately Facebook bought Instagram, an application what was almost same useless as it was worth. But after attaching that application with Facebook, it has more than 780 million users. Kudos to Mark Zuckerberg as CEO, and his team, for making this acquisition so quickly. Before Instagram had a chance to hire bankers, market itself and probably raise its value 10x.
To sum up... Investors are telling business (and government) leaders is that in a globalized, fast paced world value is based upon what you know, when you know it – in other words information. Not land, buildings or the ability to make things.