Fax machines, camera film, pay telephones, VCRs, CD players…the list of great products that are no longer part of our lives is extensive. For each of these products, there are companies that evolved and survived and some that simply faded away. 3M began as the Minnesota Mining and Manufacturing Company. The original enterprise was very successful in mining, now 3M is synonymous with post-it notes and innovation.
Did the owner of the world’s most successful buggy whip factory anticipate the effect of the automobile on his business and begin to make car parts? Or did he insist cars were a fad only for the very wealthy and he had nothing to worry about?
Business owners must always consider how innovation could radically change their business. Buyers will ask how potentially disruptive technology will affect the track of the business. Buyers today are considering the effect in five years of technology such as NFC (near field communications) imbedded in a cell phone on banks, credit cards, ATMs and every business that receives payments from consumers. Owners must be prepared answer the question clearly or buyers will fill in the blanks with caution and likely walk away.
There certainly is no guaranteed way to insure that a business model can be sustained in the long term but an owner must constantly be looking for ways to innovate and diversify the business as a way to safeguard against potential irrelevance. No business can sustain success doing the same thing over and over indefinitely. Look no further than the newspaper industry and their ongoing battle to remain relevant and profitable in an internet world.