16 July 2016 09:49:28 IST

Replacing the best product to stay ahead

Seasoned companies stay profitable by replacing their products with newer ideas

An average of one unicorn — a start-up valued at or above $ 1 billion — was born every week in 2015, a massive jump from the four that existed in 2009. But even with this start-up boom, established tech giants like Facebook and Amazon haven’t lost their footing; they continue to dominate the market.

According to an article in Harvard Business Review , more than 40 per cent of the unicorns that went public since 2011 saw their valuation stay flat or drop. So, how do the behemoths stay afloat? It’s simple — by embracing self-cannibalisation, a method where a company chooses to proactively replace one product or process with another that is worth less. Instead of letting start-ups pick up an idea, organisations commercialise on it ahead of time.

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