Products are tangible, testable, fun to build and fun to break. This is what drew me, and I’m sure many others, to the world of computer engineering (I find “computer engineers” to be a good more-encompassing term for all those who build executable digital products). So we naturally build products for others and build companies around those products to keep them alive and growing. Can a company based on a product survive in the long run? Does that even matter?
My ideas on this subject are still baking, but a leader in 11 June’s The Economist on IBM’s centenary, The Test of Time (page 20 in the paper edition, that’s how I roll) considers the longevity of a handful of companies and really got me thinking about my own company. The Economist argues that IBM has survived by packaging technology for business, that Apple will thrive based on the idea of elegantly and simply packing the latest technology to sell at a premium price, that Amazon will live by making it easy for people to buy stuff, and that Facebook will survive making it easy for people to share stuff. They argue that product-based firms won’t survive; Dell only makes PC’s, Cisco is just routers, and Microsoft relies on Windows software for PC’s.
As interesting as some of the arguments would be, I’m not interested in diving into the specifics of the above companies. I’m more interested in your company, and my company. I’m building a startup right now. By definition, that means we’re still trying to discover what exactly we should be building! We are focused on the product, the product-market fit, the business model, the culture and the brand of the company. While it is possible to define the bigger idea powering our company, doing so is only productive insofar as that process makes us think deeply and strategically about our business. The animating idea of our company is sure to change as our understanding of the business evolves.
Can a company based on a product survive in the long run? Yes, but probably not by staying focused on that product. Indeed, you can make very strong arguments that Apple (formerly Apple Computer), IBM (acronym for International Business Machines) and Facebook (fucking Facebook) all evolved successfully and drastically away from their original product-heavy days into successful idea-based companies. And I highly doubt they could have predicted their evolutionary path on day 1. But on the flip side, not every company has to live forever! Companies *should* die. Sometimes it’s better to burn out than to fade away. My takeaway: don’t worry about it (thinking about it is okay).
Does that even matter? Does the survival (or lack thereof) of product-based companies matter to you, the builder of a company? No, not necessarily. The world wants products. I personally want a motorcycle, quadro-copter with video camera, and a new MacBook Pro (in that order). And I don’t generally care if the company that makes them gets subsumed by a bigger company, lives to be 100, or dies in 10 years (so long as it doesn’t affect my enjoyment of the product).
Keep building great things, things that people want, and things that challenge the status quo. I would like to invest in those companies.
