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Why are tech companies falling like flies?

“Things move quickly in technology, which is why technology companies are fascinating to strategists the way fruit flies are for biologists — you can see an entire life cycle in a very short span of time.”

RITA McGRATH, blogs.hbr.org (5 June 2011)

Columbia professor Rita McGrath points out that technology companies are these days proving very valuable to business academics - because they come and go like fruit flies!

Like biologists, strategy students are now able to study an entire company life cycle in just a few years, as opposed to watching a steady decline that takes decades.

And quite startling it is.

Upstarts like Palm, Research in Motion (RIM), MySpace and Flip - who arrived on the scene just the other day, are in various stages of demise.

Meanwhile, long-standing tech giants like Nokia and Microsoft are also desperately scrabbling around for a strategy.
What’s really going on here?

The main thing to note is that the nature of competitive advantage is changing dramatically.

What makes you successful rarely keeps you successful. Consider some examples.

Palm became famous a few years back because it was the first phone-cum-personal organiser - managing contacts and calendars in sync with your computer.

But so what? Others like the iPhone and various Android devices soon did that better - and did more besides.

Flip provided the first pocket-sized video camera that combined portability with decent video quality and affordability.

But so what? Smartphone cameras soon provided built-in high definition video - and went further.

The iPhone provided the ability to upload content directly from the device, and film editing - things the Flip never did. The Flip, you may have noticed, is no more.