I have been watching the protests in Egypt with some degree of fascination.
As one resident describes it, this protest is 30 years in the making.
Clearly Egyptians want President Mubarak out of office.
What I find fascinating is how the leadership of the surrounding countries and territories are responding.
Almost all of them are calling emergency meetings, immediately announcing new elections, and replacing key appointees. This includes Jordan, The Palestinian Authority, and Yemen.
Interestingly, Syria has not joined the bandwagon, and not coincidentally, prospective protestors have been organizing online about protesting.
China has shut down internet access of any search engine searches on “Egypt” for fear that any small percentage of China’s one-billion-person population might get any ideas.
Amongst Middle East leaders, the big fear is a wholesale replacement of the top leadership of many countries.
It is equally fascinating that these protests largely organized via Facebook and Twitter could even come remotely close to accomplishing an outcome that Israel has been trying to do for decades – despite spending billions and engaging in multiple wars.
So what is the practical business lesson in all of this?
It is far easier to “ride” market demand than to fight it.
In the political context, this seems quite obvious.
Give the voters what they want, and you get re-elected. Or give the citizens what they want, and they won’t overthrow your government.
It should be even more obvious that this makes sense in business. Give your customers what they want, and they will buy.
Yet, it doesn’t happen as often as it should.
When an upstart company enters the market (unencumbered by historical baggage), the company focuses on what customers want and finds a unique way to give it to them.
As a company because successful, it has an enormous financial interest in preserving the status quo — because the status quo is profitable and the company has a favored position.
As new opportunities emerge, the successful company considers them — but some of those opportunities get shot down because of the risk they might “cannibalize” one’s sales or profits.
After all, why would you willingly and deliberately reduce your sales and profits if you didn’t have to?
Why should President Mubarak have yielded on certain unpopular policies in 2010 when he didn’t have to? (To avoid the protest in 2011 about those policies.)
Having spent many years in Silicon Valley, one big takeaway I learned was if you don’t cannibalize your sales, someone else will do it for you. In the Valley, you eat your own young before you let your competitors have a chance.
When you combine some of the most talented people in the world with gobs of venture capital money, you get an incredibly intensive competitive atmosphere.
While most markets are not nearly as competitive or rapidly changing as technology, it is an industry very much worth studying.
This is true in part because the pace of change is so fast in that industry, you’re able to see how specific competitive decisions play out and their ultimate impact – and take the lesson and apply it to your industry.
Combining what is happening in Egypt and this idea of pro-active change in Silicon Valley, the big message for today is to be relentlessly market focused.
The extreme version of this is to not let internal considerations (e.g., “X new product might cannibalize sales of the flagship product”) be a consideration at all in your decision-making process.
Yes, your CFO will just love this… 🙂
So apply this idea back to Egypt — many of the reforms you’re seeing being rushed to “market” should have been done much sooner. If that’s what the people want, you gotta give it to them.
You can only ignore “market” demand for so long before you end up paying the price.
The latest casualty of this?
Border’s Bookstores… just days away from filing Bankruptcy.
Give customers what they want… not what you wish they would want.
Anything else is just a recipe for disaster… eventually.