Entrepreneur - - By John Tabita

Don’t Look Now—You’re Obsolete

I never really have cared for sports, but I didn’t really understand why, until one hot afternoon a few summers ago as I watched my youngest son’s baseball team play the championship game.

They had managed to beat out a much better team to reach the playoffs, and now, midway into the final game, the score was nearly tied. With two outs and bases loaded, my son approached the plate. I was nervous. Josh wasn’t the worst hitter, but he did strike out a lot. To make it even more nerve-wracking, he ended up with a full count against him.

Then, on the next pitch, he got a base hit, brought in two runs, and started a rally that took his team well into the lead to take the win. Do you think I didn’t act like a sports-crazed fan that day? I suddenly realized why I never liked sports …

I didn’t have a team I cared about.

I admit it; I’m a technology geek. When we visited my older son’s graphics and animation classroom, I was the only parent who knew about open source software or what a fractal was. So it stands to reason that my “sports teams” are today’s technology companies, and I tend to follow them like most sports fans follow their favorite teams. So here’s what happened on the playing field this week:

For a few short hours on Wednesday, Apple became the highest valued company in the U.S., as its stock surpassed Exxon Mobile. Apple’s stock closed just behind the oil giant, bringing its market capitalization to about $347 billion.

Just five days earlier, Acer computer founder, Stan Shih, made the claim that tablets and ultrabooks are little more than a short-term fad. Despite the fact that 29 million iPads have sold in little more than a year, he believes that the solution to declining PC sales are for notebook companies to come out with “more original products that are both cheap and convenient for consumers.” That same day, Acer stock price dived to a yearly low of $34.70, down 65 percent from the December high of $99.40.

Nintendo announced that, despite a whopping $327 million second-quarter loss, it has “no intention” of developing apps for mobile gaming platforms like Android or iOS. Smart-device game sales grew by more than 60 percent last year while Nintendo lost 13 percent of its market share; yet Nintendo president Reggie Fils-Aime claims Apple has it all wrong by selling inexpensive, disposable games on the Apps Store.

How does that saying go … “Those who don’t know history are destined to repeat it …”? It seems that the newest, emerging technology is always disparaged by those threatened by it—often by the inventors of the preceding technology. In spite of being labeled a fraud for claiming that the human voice could be transmitted over wire, radio pioneer and vacuum tube inventor, Lee DeForest, called the commercial development of television “an impossibility,” and declared that a manned moon voyage will “never occur.” Here are some other Very Bad Future Predictions regarding past technological advances:

Rail travel at high speed is not possible, because passengers, unable to breathe, would die of asphyxia. – Dr Dionysys Larder, professor of Natural Philosophy and Astronomy, University College London, 1800

This telephone has too many shortcomings to be seriously considered as a means of communication. – Western Union internal memo, 1876

Everyone acquainted with the subject will recognize it as a conspicuous failure. – Henry Morton, president of the Stevens Institute of Technology, on Edison’s light bulb, 1880

The horse is here to stay, but the automobile is only a novelty, a fad. – President of Michigan Savings Bank, advising Henry Ford’s lawyer not to invest in the Ford Motor Co., 1903

Who the hell wants to hear actors talk? – H. M. Warner, co-founder of Warner Brothers, 1927

Television won’t last because people will soon get tired of staring at a plywood box every night. – Darryl Zanuck, movie producer, 20th Century Fox, 1946

There is no reason anyone would want a computer in their home. – Ken Olson, president, chairman and founder of Digital Equipment Corp. (DEC), maker of big business mainframe computers, arguing against the PC in 1977

The truth is no online database will replace your daily newspaper. – 1995 NewsWeek article, “The Internet? Bah!”

We don’t have email. We think the Internet is just a fad. – Old friends of my parents, whom we had run into on vacation and asked for their email to keep in touch, 1999

Companies who deny or ignore emerging trends will find themselves playing catch-up when their apple cart gets knocked over. Here’s a page from my own industry’s recent history:

In the mid-nineties, when companies like AT&T and Ameritech were enjoying high profits from their Yellow Page monopolies, two Stanford University students were quietly setting up shop in a garage in Menlo Park, CA. I’m sure that the multi-billion dollar telecommunications companies never imagined that this newly-formed company named Google, with its measly $100,000 of investment capital, would ultimately be poised to challenge them as the preferred medium consumers would use to search for local business information. For over 100 years, Yellow Pages companies had been extremely successful at connecting buyers with sellers, but they were asleep at the wheel and didn’t see how the Internet could be in position to threaten their bread-and-butter print directories. With all of their capital and resources at their disposal, they could have been Google. They should have been.

So what’s the take-away for you and me? Each of us is responsible for our own economical well-being. It’s not just companies in denial who become obsolete because of new technologies—it’s you and me. Millions of American steel workers and auto workers never imagined that Japanese steel or Japanese automobiles could supplant U.S. dominance of these industries. Many of these workers based their economic security on the promise of ongoing employment and retirement with a pension. After all, isn’t that what Dad and Grandpa did?

Those who fail to keep an ear to the ground and stay abreast of new trends and technologies are doomed to become obsolete, be it freelancer, business owner, or employee. I’ll leave you with one last quote:

In the middle of a difficulty lies opportunity. – Albert Einstein

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