It’s hard to imagine life without Amazon, Apple, Facebook and Google, but they could fade away just as quickly as they emerged. The Center’s founder explains.
By Jeffrey Cole
The big four — Amazon, Apple, Facebook, and Google — have changed the world in too many ways to count. They simplified processes that before their existence were more complex and less successful. They made their founders the richest men in the world and their investors wealthy. Today, it’s hard to imagine a world without these four companies.
Considering the massive influence and impact of these four companies, its important to remember they are all products of the 21st century. These companies have risen (and could fall) in the span of approximately 20 years.
Historians and sticklers will correct me by saying that Apple was actually founded in 1976. True, but I would argue that the Apple of the 20th Century almost never achieved more than 3% market share. The Apple that is currently the world’s most valuable company, and whose products (incremental or game changers) we eagerly wait for, emerged in 2003 with the introduction of the iPod and iTunes. Steve Jobs further solidified Apple’s incredible offerings four years later with the iPhone and three years after that with the iPad.
Amazon was founded in the mid 1990s, but I’m rounding up the difference. Google was founded around the turn of the century, and Facebook in 2004-5. They all achieved their global dominance (except in China, where Google, Facebook and Amazon do not operate) in 20 years.
If these four companies could emerge in 20 years (eclipsing Kodak, Xerox, Wang, Sun, Gateway and others — even Microsoft for a while), then how could we possibly believe there will not be another four bigger or more radical companies that emerge over the next 20 years? More to the point, if disruption occurs that quickly, then isn’t it likely one or more of these big four will not make it to the 40-year mark?
Companies rise quickly, dominate for a while and then may recede. There may not be anything resembling a General Electric or AT&T (the old one) that dominated the business world for more than 100 years. We are already at the point where the companies that disrupted the disrupters are now being disrupted.
September 2017 was the tenth anniversary of the introduction of the iPhone. Go back 10 1/2 years, and the mobile handset business was dominated by four enormous incumbents: Nokia, Motorola, Blackberry and SonyEricsson (now Sony).
Nokia, a Finnish company previously known for its rubber boots, was the most successful of the four. Blackberry had millions of loyal business users who relied on the phones for their impressive security features and much-loved real-button keyboards. Motorola’s flip-phones were the coolest for a while, and SonyEricsson was famous for great styling.
Recently, I did a talk with 1,000 people in the audience. I asked how many people had each of these phones. This isn’t a scientific sample, but it does make an important point: out of 1,000 people, one person had a Nokia, two people had Blackberries, and none had Motorolas or SonyEricssons. Suspecting I might be right, I asked the two Blackberry users if they used another phone: both people had iPhones they used to access the web.
This disruption occurred in a little over 10 years.
In the late 1990s, Bill Gates, riding high as the founder of Microsoft (and at the time the richest man in the world) was asked which company kept him awake at night: AOL, Intel, or someone else. Gates replied somewhat arrogantly and dismissively that he never thought about those companies. What kept him awake at night, he proclaimed, was “two guys in a garage in the Silicon Valley.”
It is an amazing quote. There is no way Gates could have known that there literally were two guys in a garage. Two math Ph.D students at Stanford, Sergei Brin and Larry Page, were creating a new algorithm for search that would do so much to disrupt Microsoft as they created Google.
There are now three garages in the Silicon Valley that are historical landmarks where massive tech companies were born. The first is the Brin-Page Garage (owned by Susan Wojcicki).
The second is the Steve Jobs-Steve Wozniak Garage (owned by Jobs’ parents) in Cupertino. A few months ago, I was a fellow keynoter at a conference with Wozniak in Australia, and I asked him about the garage. He said they were only there for a short time, but it is where the original innovation for the Apple computer came from.
If Amazon, Apple, Facebook, and Google could emerge in 20 years, then how could we possibly believe there will not be another four bigger or more radical companies that emerge over the next 20 years? More to the point, if disruption occurs that quickly, then isn’t it likely one or more of these big four will not make it to the 40-year mark?
The third garage reaches back to the late 1930s, and it was where William Hewlett and David Packer founded HP. In that garage they developed an oscillator that established the company when Walt Disney (who also founded his company in a garage, but in Southern California) ordered eight of them. HP’s garage was moved several miles and now sits on the HP campus in Palo Alto.
All of this leads to the fact that there are a lot more garages in Silicon Valley and even more garages outside of Silicon Valley. With driverless cars, in 10 years we will not even have garages. And, we can expect that the next great company will come from two women in a garage or den somewhere in the world.
This is the norm: companies rise quickly, dominate for a while and then may recede. There may not be anything resembling a General Electric or AT&T (the old one) that dominated the business world for more than 100 years. We are already at the point where the companies that disrupted the disrupters are now being disrupted.
To paraphrase Andy Warhol, today’s disruptive companies may only get 15 years of fame.
Jeffrey Cole is the founder and director of The Center for the Digital Future at USC Annenberg.
March 21, 2018