Natural Selection in Business – Does using Big Data provide a sustainable advantage?


 

In nature, when resources are plentiful, species live together quite amicably. Even predator and prey reach a satisfactory balance whereby there is always food for both. However, when resources are scarce, species that were once happy together often turn into bitter enemies. The strong, big guy’s fight each other, determined to completely obliterate their competitor often resulting in mortal damage being inflicted on both. Whilst this is happening, the intelligent guys, who are inevitably smaller and physically weaker, get to work. Firstly, they take advantage of the preoccupation of the others by amassing their basic requirements quickly. They then diversify and find a niche for themselves, knowing that competition will come, but being determined to foresee it and avoid it where possible.

 

Most people accept that this is the way of the natural world and business dynamics tend to follow the same basic rules. Intelligent companies will not measure themselves by numbers of employees, amount of real estate or revenue alone, but will instead increasingly judge themselves on different values:

 

  • The average life time value of their key customers
  • The elapsed time for a new customer to become profitable
  • Public image
  • Customer retention
  • Knowledge, expertise and willingness of the work force
  • Brand awareness and flexibility
  • Environmental friendliness
  • Efficient and focused work practices
  • Customer satisfaction

 

Note: be aware that the little guys don’t always have to take on the big guys directly and in fact it’s usually best not too. Those of you who know the story about David and Goliath should be clear that this was not a simple big guy versus little guy competition in which David shows the world not to be afraid of a ‘larger’ opponent. The fact is that Goliath, although being big, had no noticeable weaponry whilst David however, had the equivalent in those days, of a sawn off shotgun. My guess is that if the two guys had met with equal weapons the result would have been rather less romantic but David showed some real common-sense here. He knew that if he wasn’t prepared for the fight he had no chance so he fought the battle very much on his own terms.

 

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