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Sustained Viability

The figure below shows the sales-vs-time trend chart of a one hit wonder company. The sales from product “A” ramp up, settle out, and then ramp down.

The ramp up, steady-state, and ramp down time intervals in which sales > $0 varies wildly from one company to another and depends on many factors: how easy the product is to copy, whether the product is obsoleted by another product, how big the market is, whether or not the product keeps evolving to meet new customer demands; yada, yada, yada.

To maintain sustained viability and to avoid being a one hit wonder company, new products must be continuously developed to offset the eventual decline in sales from the aging one hitter. The longer the “flat” segment of sustained sales is, the easier it is to become fat/happy/complacent and stop creating and innovating.

The figure below traces the rise and fall of a three hit company. The green vertical lines are snapshots of the company’s sales at four different points in time.

At the peak of success, all three products have leveled off at their maximum sales levels and the good times are a rollin’. Then, for an unknown reason(s), the product pipeline is suddenly empty, and one by one, sales start decreasing for each product.

So what’s the point of this inane post? Hell, I don’t freakin’ know. I was just doodlin’ around with visio, sketchin’ away, makin’ stuff up, and these graphs emerged from the wild blue yonder. Sorry for wastin’ your time. It wasn’t a waste of mine.

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