The New Rules

Why didn’t the largest, most experienced, best-funded aerospace players in the field step into the void left open by the cancellation of the shuttle program? Why, instead, did passionate young entrepreneurs with no space experience transform America’s assured access to space?

Because the rules have changed. 

Ronald H. Coase won the Nobel prize for his rationale that, for big companies, internal transaction costs were lower than getting things done on the outside, thus creating economies of scale. This became known as Coase’s Law.

Coase’s Law has been broken by the enormous power of technology. Between mobile phones, the internet, and AI, the lines between a large organization and the outside world have blurred and fragmented. As a result, over the last two decades, large operating companies have given way to platforms, and platforms are transforming into ecosystems.

What’s most incredible about this transformation is its sheer speed:

• TikTok reached a billion users in five years.

• ChatGPT reached 100 million users in just two months.

• Apple took from 1976 until 2018 to achieve a market capitalization of $1 trillion. It took just two years to hit $2 trillion.

• The number of “unicorn” businesses reaching a billion-dollar market cap is more than five times higher today than in 2014 when we first unveiled the ExO model. 

• Cloud security startup Wiz reached $100 million of annualized revenues in just 18 months.

This chart shows the time it took for selected online services to reach one million users.

Image Credits: Wiz, Bessemer Ventures

We are witnessing a new breed of organization that is scaling and generating value at an unprecedented pace. It’s important to understand why this is happening and just how unprecedented this shift is.

1) $100M ARR in 18 months: Wiz becomes the fastest-growing software company ever