It’s easy to see why cascading effect is a double edge sword. For one, it allows rapid adoption of new technologies/behavior once its expected pay off is deemed to be greater than the loss resulting from the bold step of conversion. This is the very mechanism by which new innovations’ adoption spreads. However, in the world of business, one’s gain is often another’s loss. When a new innovation takes over, existing businesses which fail to adapt often falls in the hands of small start-ups which are bold enough to make the transition. This failure to adapt is not without reason. For a big business, when conventional methods provide stable streams of profits, there is no motivation to invest in a new form of innovation that may potentially threaten their existing products. However, should the new innovation becomes mainstream, the slow-to-adapt business will fall behind. The uncertainty in whether an innovation will develop a cascade is the basis for this dilemma. In an article titled ‘Entrenched Player’s Dilemma’ , the author laments about NBC’s hesitation in embracing streaming media, for fear that it’d threaten their primary revenue source. While NBC is dwelling on whether to make the leap of faith or not, other small businesses that are quick to respond to new innovations thrive.

It’s certainly not hard to justify NBC’s moves. There is always an inherent risk in adopting new innovations. Between investing in technologies with an uncertain future and risking their primary revenue, and staying put with old technology that gives a stable income, it is only rational for NBC to choose to stay put. However, if one is willing to take the risk, then like the author of the above article said, Entrenched Player’s Dilemma turns into Entrenched Player’s opportunity. The author cites the case of Google mail, a primary example depicting the wide conversion to Google mail. Google had decided to roll out an email service with unprecedented storage space, which makes Hotmail and Yahoo mail’s offerings pale in comparison. After a year, Google mail has become main stream, leaving Hotmail and Yahoo mail behind.  Such is the power of cascading effect.

Knowing this, and notwithstanding the hindsight bias, it’s probably no surprise why many small start-ups today are able to compete with big businesses face to face. This is especially true in today’s Information age, when innovations get churned out at a rate faster than the time it takes to adopt them. Technopreneurs often rely on cascading effect to spread their new products to new user base. However, unlike big businesses, these technopreneurs have much less to lose should their innovations fail to take off. Paradoxically, with their great monetary resources, big businesses can not afford such luxury of adopting new innovations.

Perhaps ‘Entrenched Player’s Dilemma’ is not such a bad thing. If we put on a different perspective, we would see that this induces competitions, and serves to bring new blood into an ever changing industry. As big businesses have had their fair share of peaks and glory, they should probably give space to small but new businesses to grow.