Big Little ThingsAgain: All signs point to opportunities for the small and nimble
Chris Anderson’s got a great piece on Wired.com that actually adds research and deep thought to that ramble I posted a few weeks ago about small being better than big. I thought I was on to something. Here’s a taste:
What we have discovered over the past nine months are growing diseconomies of scale. Bigger firms are harder to run on cash flow alone, so they need more debt (oops!). Bigger companies have to place bigger bets but have less and less control over distribution and competition in an increasingly diverse marketplace. Those bets get riskier and the payoffs lower. And as Wall Street firms are learning, bigger companies are going to get more regulated, limiting their flexibility. The stars of finance are fleeing for smaller firms; it’s the only place they can imagine getting anything interesting done.
As venture capitalist Paul Graham put it, “It turns out the rule ‘large and disciplined organizations win’ needs to have a qualification appended: ‘at games that change slowly.’ No one knew till change reached a sufficient speed.”
The result is that the next new economy, the one rising from the ashes of this latest meltdown, will favor the small.
For you entrepreneurs out there, this got to be encouraging, right? It is for me.
