Rentpath. Web.com. PSINet. Wavo Corporation. Netcom On-Line. iStar Internet. Not exactly household names, are they? But these organisations were some of the biggest listed internet companies in the world, just two decades ago. According to research by venture capitalist Mary Meeker, they were all in the top 15 at that time, but have now been replaced by the likes of Google, Facebook, Amazon, eBay, Alibaba, et cetera.
It goes without saying that we live in a time of great change. But despite widespread acknowledgement of this fact, there is sometimes a lingering assumption that the Goliaths of today will be unthreatened by the Davids of tomorrow; that the big winners of recent years will have the might to cope with technological and social changes that come our way. It is a dangerous way to think, especially if you’re an investor.
A new report published today (detailed on page 1) predicts widespread disruption in the tech economy over the next 10 years. Firms that fail to adapt, risk falling behind.
Another report, by small business lender Fleximize, estimates that over £5bn will have been loaned out through the alternative finance sector by the end of 2015 – an astonishing rate of growth, given that the figure stood at just £267m in 2012. Little surprise that many large, established lenders expect the biggest threat to their positions to come not from existing financial rivals, but through the tech sector itself. Technology will lift competition while regulators twiddle their thumbs.
There is nothing especially new in this story; change tends to happen at a rate that few expect. Not that long ago there were near-Malthusian fears over “Tescopoly” – the idea that Tesco would absorb an ever-growing chunk of the British economy. Imagine the reaction if one had argued, back then, that the supermarket giant would soon have its market share cut into by a couple of privately-owned German retailers.
It’s impossible to know what the future will bring, but it seems that, in the business world, we are on track for more disruption, more innovation, more uncertainty, and more Davids toppling Goliaths – and that’s a good thing.