Rita McGrath and M. Muneer: “More than 80% of Indian startups don’t make it past the first 5 years and even fewer the next five. As part of a few startups that survived these two milestones, we can tell you how important it is to constantly look at your business models and make corrections while staying lean all the time. Some business models are inherently more attractive than others. Yet, oddly, stakeholders often don’t ask the obvious questions. This may be because it is perceived as either complicated or too much work. For those looking for a quick overview of what makes one model superior to another, here are some key questions…Are we able to create switching costs once we have customers?…Are we transactional or relational?…How interchangeable is our user interface?…Painkillers or vitamins?…Do we have a chance to take advantage of network effects?…Do we solve a problem once and for all, or is it recurring?”
Ron Shaich: “The most powerful responsibility of leadership in business or in any organization is to actually transform—once you discover what’s going to matter in the future. The key to most everything is, first, tell yourself the truth, where you really stand, what the competitive marketplace is. Second, based on that, know what matters. Third, get done what matters…It is important to recognize the nature of innovation in any enterprise. If you don’t innovate, you die. You must continue to stay ahead or at least keep pace with a changing marketplace. As your company gets larger, it takes more time to develop that and to get it done. Most organizations are set up with functional leaders. Functional leaders are very good at saying “no” in defending their function. The problem is, very few people say “yes.” Saying “yes” is about a fundamental commitment to where the enterprise itself is heading, not to the functions.”
Manoj Pant: “At the base of the problem is the reality that no economy can outpace the growth of its consumer base, as production and demand must match. While digital economy aggregators have been multiplying the production of services rapidly, all of them together can only sell a particular product (be it education, food, cars, etc) to the same set of individuals. As many fight for the eyeballs of the same consumer, only one will succeed (so ‘winner takes all’ is still plausible), and the rest will fail. Another symptom of the problem is the downsizing of many companies in the IT sector. The bottom-line is clear. While the size of the manufacturing sector is actually limited by the fixed costs of setting up industrial units, which keeps the number of contenders low, in the case of technology-driven aggregators, the very source of growth (low delivery costs) can also be the cause of their downfall. Maybe Freddie Bulsara, the star performer of the rock-band Queen, was prophetic. As we go along, many more digital companies are likely to bite the dust.”
Economist: “In some ways the covid-19 pandemic was a blip. After soaring in 2020, unemployment across the rich world quickly dropped to pre-pandemic lows. Rich countries reattained their pre-covid gdp levels in short order. And yet, more than two years after lockdowns were lifted, at least one change appears to be enduring: consumer habits across the rich world have shifted decisively, and perhaps permanently. Welcome to the age of the hermit…Three years on the share of spending devoted to services remains below its pre-covid level. Relative to its pre-covid trend, the decline is even sharper. Rich-world consumers are spending on the order of $600bn a year less on services than you might have expected in 2019. In particular, people are less interested in spending on leisure activities that generally take place outside the home, including hospitality and recreation. The money saved is being redirected to goods, ranging from durables such as chairs and fridges, to things like clothes, food and wine.”
The Generalist: “Zavain Dar believes we’re entering a fecund era for life sciences investing. The software and AI revolution fundamentally alters the composition of businesses founded in the sector, allowing for more capital-efficient approaches and leading to higher multiples…Zavain expects the ascent and proliferation of large language models (LLMs) to open new frontiers in biology and chemistry. In particular, advanced LLMs and other foundation models should lead to greater accuracy, finer fidelity, and emergent abilities in these fields. The result could be an explosion of new, promising treatments and therapeutics.”
