The Transitional Market Dilemma

If you’ve been operating long enough in the business world, you might have reconciled yourself with the seemingly conflictual relationship between the short-term (survival) and long-term (vision).

Not only do these two time frames seem to work one opposed to the other, but often, the short ultimately makes you lose the original vision.

Or yet, the vision itself might make the company go adrift in the short (take the case of a company failing because of liquidity issues; that happen more often than you might imagine).

Why this misalignment? That primarily happens when founders and top executives lose sight of the underlying context driving that shift.

In a tech-driven business world, many new markets developing might, with high probability, die down. In short, they are not a fundamental shift; they turn out to be a blip.

Yet, that’s the thing: when the right market transition hits, it’ll be hard to get the old paradigm back, as it will be gone fairly quickly (which is still a ten-year time frame).

That’s the key take for this issue: when there is a transitional market that works as a force with two conflicting currents.

In the short term, one current will still make the old paradigm look viable, and it might give the short-term belief that it’s still possible to operate with that old paradigm.

Yet, the other current, the "transitional wave,” will come with tides as the new technological paradigm needs to find its grounding, thus becoming stronger and stronger until the whole market is transformed.

And we’re right in the midst of it, as we’re only at the first stage of a paradigm shift, which might happen in three acts.

I’ll tackle this in a dedicated issue about how it might all play out.

But that all starts from the transitional market dilemma.

The transitional market dilemma will tempt you to think the old paradigm still works out, as the new transitional market - while inevitable - is coming in tides.

This paradigm will work by first transforming the outer layer of an enterprise market and - slowly, then suddenly - eating the whole market. The interesting thing is while the transitional market, turning into a foundational market, will eat the whole, it will also expand it many times over!

That means a good chunk of old paradigm players might die, yet those able to transition to the new paradigm might find themselves surfing a much larger market!

That’s the beauty of it.

Are you ready for this transition? The upcoming issues will be dedicated to that…

Recap: In This Short Issue!

• Short-Term vs. Long-Term Misalignment:

  • Businesses often struggle to balance short-term survival with long-term vision.

  • The short-term focus can erode the original vision, while the long-term vision might cause short-term instability (e.g., liquidity challenges).

• Transitional Market Dynamics:

  • Many emerging tech markets may prove to be temporary trends ("blips") rather than fundamental shifts.

  • A transitional market operates with two conflicting currents:

    • Short-term current: Keeps the old paradigm appearing viable.

    • Transitional wave: Gradually strengthens the new paradigm, ultimately transforming the entire market.

• AI Evolution in Three Phases:

  • Phase 1: AI is integrated as added features into existing products (incremental adoption).

  • Phase 2: AI becomes the core of products, redefining their fundamental purpose.

  • Phase 3: AI enables entirely new, native products and interfaces, forming a new paradigm.

• Transitional Market Dilemma:

  • Businesses may be tempted to believe the old paradigm is sustainable, delaying adaptation.

  • The new paradigm will expand the market while replacing the old model over time.

• Market Shift Timeline: The paradigm shift is gradual, spanning approximately 10-20 years, transforming markets "slowly, then suddenly."

• Implications for Players:

  • Companies tied to the old paradigm risk irrelevance unless they transition to the new framework.

  • Early adopters of the new paradigm stand to benefit from larger, unified, and expanded markets.

• AI-Unified Paradigm: Future markets will be characterized by integrated AI solutions, cross-sector APIs, and seamless interoperability, replacing fragmented tech sectors (EdTech, FinTech, etc.).

• Growth Potential: The foundational market will expand opportunities, enhancing capabilities and scaling advantages for adaptive businesses as they’ll find themselves in a much larger market opportunity.

With Massive ♥️ Gennaro, FourWeekMBA

---

Business Engineering Curriculum