According to Fred Wilson, a famous venture capitalist at Union Square Ventures, a company needs some requirements to build a competitive advantage, and it is not necessarily what is taught in business school.
"But as I look at many of the challenges facing businesses today, it seems to me that the focus on performance and efficiency often comes at the cost of sustainability. And interview with Clay Christensen really drives that point home. The recent history of the steel industry in the US is a case study in managers doing everything they were taught in business school and in the end they bankrupt the business.
Going back to business school, they teach you the value of a business is equal to the present value of future cash flows. If the company is likely to stay in business forever, then the value is most likely way higher than a business that is going to be out of business in a decade. The present value of a hundred years of cash flow is likely to be larger than the present value of ten years of cash flow.
And sustainability is all about figuring out how to be in business forever. It is about business models that are win/win and lead to happy long term customer and supplier relationships. It is about avoiding the temptation to overeach. It is about avoiding the temptation to mazimize near term profits at the expense of long term health. It is about adapting the business to changing market dynamics. It is about building a team and a culture that can survive the loss of the leader and keep going. And it is about many more things like this."
Source:http://www.avc.com/a_vc/2011/11/sustainability.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AVc+%28A+VC%29
It is the same investment philosophy for Warren Buffet. He dislike managers who don't have long term plans. For Warren Buffet, the best stocks represent investing in companies with sustainable competitive advantages and forget the price of the stock for 5 years.
Louis Rhéaume
Infocom Intelligence
louis@infocomintelligence.com
Twitter: @InfocomAnalysis
A blog on the convergence of info-communications industries: communications, computing, electronics, entertainment, publications and education. Strategic, technological and financial analysis. English and French blog. Cette chronique traite de l’évolution des industries de l’information et des communications et couvre des aspects stratégiques, technologiques et financiers, comme l’économie du savoir et de l’innovation. L’auteur est Associé principal de Infocom Intelligence.
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