(Specially extracted from my upcoming book: Secrets of Millionaire Entrepreneurs)
Why is it that 80% of companies that are able to survive the first five years of business will usually fail in the next five? Shouldn’t they know what to do after being in business for the first five years?
The reason is because markets and economies are changing so fast that what works in business today will not work in three to five years. If you have the mindset of constantly doing things the same way and maintaining the status quo, you will soon be out of business.
Successful entrepreneurs are engaged in constant and never-ending improvement. They are always finding ways to innovate and improve their business operations, marketing, products and services. They know that if their business is not improving and growing, it is dying. Bill Gates (founder of Microsoft) once remarked that the key to succeed in business is to innovate and make yourself obsolete. If you don’t make yourself obsolete, your competitors will make you obsolete.
This is why the moment a software like Windows is released, Microsoft is already working on the next version and upgrades like Windows 98, Windows 2000, Windows NT, Vista and so on. Bill Gates knows that the moment they stop innovation, another company will create an even better software and take over their customers.
This is exactly what has happened to companies that did not change fast enough. Back in the 1990s, the top selling mobile phone was Motorola. Motorola produced the best-designed and technologically advanced phones. Everyone, including me bought a Motorola phone. So, where is Motorola today? Last I heard, their mobile phone business has been losing so much money that Motorola is thinking of shutting down the whole mobile phone business altogether. What happened? Well, Nokia and Sony Ericsson happened to innovate even better designed and more user friendly handsets that captured all of their market shares and profits.
Do you know which is the first search engine on the Internet? Is it Google? Yahoo? MSN? The answer is none of them. The world’s first search engine is Alta Vista. Many of you may never have heard of this brand simply because it has it is an obscure site that very people go to. Needless to say, the company that was once a market pioneer and leader is now a business failure. Again, what happened was that the founders had the mindset that their search engine was good enough and there was no need to change what was working.
This left the door wide open for Yahoo! to come in and take away that leadership position. Then what happened next? Well, Yahoo! was too slow to extend their service range and innovate their advertising services such that Google (one of the newest Internet search engines) came along and took away 70% of the market share, leaving the remaining 30% to be fought over by the other search sites. In today’s ever-changing marketplace, a company that is the market leader today could be bankrupt five years later, if they stop innovated and finding new ways of doing things.
Instead of seeing this fact as a threat, see it as a fantastic opportunity. This means that your new company could take over the leadership position of the largest competitor today and even put them out of business! The key is to find a way to serve their customers even better then they can!
So, let me emphasize again that unless you keep innovating and changing the way you do business, you will be out of business soon enough. I can tell you that if I did not grow my business to enter new regional markets like Indonesia, China, Thailand, India and Malaysia, I will be bankrupt today! My company’s monthly overheads are about $500,000 and Singapore only accounts for 50% of my sales and profits. If I did not constantly focus on creating new programs (i.e. the Wealth Academy and Internet Marketing Academy series), writing new books (two a year) and changing my marketing and distribution strategy every day (i.e. entering the Singapore schools market), I wouldn’t still be the market leader in personal development training in Asia. Another competitor would have caught up and blasted me away to oblivion.
Today, it is impossible to maintain your position in the market by doing the same thing. The reason is because customer’s expectations change constantly, competitors improve constantly, employees work habits change constantly and so forth. So if you keep doing business the same way, you are actually going down, as everything around you is improving.
