Cycle-time and mid-life crises

A quotation from Paypal founder Max Levchin in an otherwise typical wrong-footed article at I, Cringely :

“What you want to do,” he said, “is listen to your customers and bring out every two weeks improved versions that would each take your competitor two months to complete. That’s when you are on a rocket—they can’t keep up so they can’t compete. They lose hope and pretty soon you have the market pretty much to yourself.”

Cringely goes on to say that developing at that pace isn’t sustainable.

He’s wrong here – what becomes increasingly hard to sustain isn’t development pace but rather corporate risk-taking. At some point, most companies switch from growth to consolidation in the same way as most teenagers turn into responsible adults.

Occasionally companies have mid-life crises – I think Microsoft’s struggling with this phase right now – longing to be the long-haired 50-something who rides a motorbike to work. Everyone else knows it’s just a phase and that he’s in fact scared to death.

Anyway, I for one applaud the teenager dot-com companies lurking on the street corners of web, drinking cider and terrorizing passing geriatrics. Please, Mr. Google, can I join your gang?