What do Established Companies Fear Most?

I fear someone in a garage who is devising something completely new.

Bill Gates’s response when asked by reporter and journalist Ken Auletta to describe Microsoft’s competitive nightmare, specifically “What [business] challenge do you most fear?” At the time of the interview, early 1998, Microsoft was the dominant player in the high-tech industry — its operating system had a market share of 90% and its coffers were flush, reporting revenues of more than $14.5 billion in that year alone. In his book, Googled: The End of the World as We Know It, Auletta describes how Gates pondered the question, while rocking back and forth, sipping a Diet Coke, and delivered an answer that was insightful, surprising, and brutally honest; Auletta remarks: “He did not recite the usual litany of prominent foes: Netscape, Sun Microsystems, Oracle, Apple. Nor he did he cite the federal government… He just knew that innovation was usually the enemy of established companies.” Gates, of course, is referring to the legendary pioneers who toiled in the garages of Silicon Valley that created HP, Apple, and eventually, Google.

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