Most businesses and startups are designed following the traditional mechanistic thinking of the last two centuries. This approach assumes that the business works as a mechanism in which one piece engages after the other: from customer acquisition to profit. The problem: this has been obsolete for years.
The change is there for all to see. Nothing that does not work as a network can grow beyond a certain size. And that size threshold is getting lower and lower because big players like Amazon or Google are already imposing their dynamics on society.
Almost all large corporations have this obsolete “mechanical” structure. But they survive thanks to legal and financial privileges that parasitize the rest of society. These privileges are also doomed to disappear.
Exchanging your Time for Money is a Loser Bet
In a world of increasing competition and decreasing returns, for most business owners investing time and money in personally running the machine is a guarantee of long-term ruin.
Professionals are the most exposed, but so are other types of businesses. All of them invest their most limited resources: time and capital in exchange for getting some money in each transaction.
Capturing Value, Converting it to Capital
The alternative is to invest part of that effort in creating capital, in the form of a technological platform. Only with technology can you capture and retain a part of the value you generate for yourself, instead of having your client take everything.
Limited resources must be invested in technology that allows for three things: generating value for participants, scaling in the network, and turning transactions into money.
The Challenge: How to Become a Network
I know, designing platforms and aligning incentives is a big challenge. But so is the amount of change we are going through.
Get help in the form of a little consulting advisory, or partner with other players in your same industry, including competitors. Their main problem is the same as yours: how not to be devoured by a system that has mutated into a network.