10 Characteristics of Exponential Organizations
Author Salim Ismail advises legacy Fortune 500 companies ( established pre-internet) on making the digital transition from a legacy model to what he calls an exponential organization by modeling the 10 attributes of the new era Fortune 500 (platforms like Facebook, Soylent). The difference between the two include exponential growth opportunities. I used the example of Soylent because it is a food product who open sourced their ingredients to illustrate that this is no longer just a software business model. A company that successfully accomplished this transition is TED talks, the educational speakers circuit with “Ideas Worth Spreading”. “TED Talks” leveraged the internet to essentialy open source their company, allowing anyone to create a TEDx event by following their guidelines. This exploded exposure and the company’s revenue by 10x. Salim is also the founding CEO of Singularity University. SU is partnering with some of the brightest people in the world to launch and invest in disruptive technology startups.
“You are either the disrupted or the disruptor” – Salim Ismail.
For example, peer to peer insurance by lemonade.com. This is poised to disrupt insurance by changing the fundimental model, making it faster, more transparent, cheaper and more convenient for the the insured party.
Lemonade.com and others using this new business model will very likely mean the end of large insurance companies with a top down structure such as State Farm. That legacy business model won’t be able to compete with the speed of growth compared to companies using ‘Network Effects’ where users bring on new users.
The costs associated with growth for a legacy company don’t exist in an exponential organization. When compared to a company born on a digital network, the overhead alone will stop them from competing with their pricing model.
That is, unless they embrace the same business model. That would require allowing themselves to split away from what got them where they are now which inherently feels counter intuitive. For this reason, most of them won’t do it. Rather, they will be replaced.
Industries that require specialized knowledge such as the health industry, accounting, insurance, education and more are currently under attack by Silicon Valley and will undergo disruption for the next 10 years (prediction by Peter Diamindis, best selling author of Bold) which will cause explosive growth for some and lead to entirely new industries.
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