The Magnet Strategy
How do you continue growth at scale? The larger a company grows, the more difficult it becomes for it to keep growing at the same rate. For example, it is easier to grow 20% per year for a $1B company than for a $100B company. What do you do when the market a company is serving gets saturated, i.e. the company achieves a dominant share and it becomes difficult to acquire new customers in that market because of increased customer acquisition cost? You can expand to other markets but that might require different products and different prices. And, there is the risk of affecting the company's brand in its current market. You can acquire other companies but there is a risk of cultural misalignment in integration. Hence, there are limited options to continue growth when you are very big. The Magnet Strategy Digitization is making it easier for the dominant tech companies to expand into new markets currently served by old incumbents. I call it the Magnet Strategy because...