Decomposing Venture: Adapt or Die
Investor Liaison Hannah Savage talks 'mass extinction vs. industry decomposition'
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“The Rise and Fall of the Dinosaurs: A New History of Their Lost World” by Steve Brusatte begins by describing a world we've never really known, a world that would be completely unrecognizable to any living thing today. Cue the Permian-Triassic extinction 252 million years ago, the most catastrophic mass extinction the Earth has ever endured. The cause? The leading theory is a massive volcanic eruption in what is now Siberia that caused an inhospitable environment for many of the species.
Extinction
Extinction isn’t just about destruction, it’s about genesis. After the end-Permian extinction, life didn’t just recover; it came back stronger, more adaptive and with entirely new forms. Dinosaurs themselves wouldn’t have ruled Earth without that reset. The same is true in technology and business. Every time an industry collapses or a paradigm shift wipes out incumbents, something new rises from the ashes. The Industrial Revolution, the internet boom, the rise of AI – each of these moments was both an extinction and a genesis.
Innovation
Innovation sometimes works the same way.
For every dominant species, there is an extinction event waiting to happen. The same is true for technologies, business models and even entire industries. Blockbuster seem to have never saw Netflix coming. Kodak invented digital photography and then ignored it. BlackBerry went from being the phone for executives to a relic practically overnight. The financial world is full of these failures to evolve and innovate which then leads to relatively swift and often seismic changes. As investors, we spend our careers trying to pick the “species” that will survive and thrive in the next era.
Decomposition
For investors, this means recognizing that today’s dominant players aren’t invincible. Monolithic industries are ripe for decomposition, and technology is the tool that will allow the evolution of a new and unexpected era of industries.
In venture, the real challenge isn’t spotting a great company – it’s spotting a great “species”, one that can adapt, pivot and evolve when the landscape changes. Just like in nature, the market doesn’t reward strength; it rewards adaptability.
The question isn’t which companies are winning today – it’s which ones are built to survive tomorrow?
Sources
The Rise and Fall of the Dinosaurs: A New History of Their Lost World by Steve Brusatte.
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