Unpredictability of Change
As should be evident from the previous examples on the magnitude and rate of change, many of the biggest and quickest changes have also been hard to predict. Would fortune tellers have done any worse job predicting the rise of VOIP than Fortune (or any other magazine) did? We doubt it. To be clear, we are not picking on Fortune; it's a great organization and produces a quality product; this is why it is one of the most widely read and quoted magazines. But that is exactly our point. If the best business journalists talking with the best business minds can't get the future right, then it just reinforces how unpredictable the future is.
As a last example of the unpredictability of change, consider the rise and fall of Encyclopedia Britannica. Arguably, Encyclopedia Britannica invented the category in which it competes. The first edition was published progressively from 1768 to 1771 as Encyclopædia Britannica. When it was completed, it contained 2,391 pages and 160 engraved illustrations in 3 volumes. For more than 200 years, it dominated the category it created. It was considered the most authoritative encyclopedia in the market. By the third edition, published 1788–97, it contained 18 volumes plus a 2-volume supplement of more than 16,000 pages.
After the 11th edition (often called the 1911 edition), the trademark and publication rights were sold to Sears Roebuck of Chicago, Illinois. Thirty years later, Sears Roebuck offered the rights to the University of Chicago. From then until his death in 1973, William Benton served as the publisher.
For the next decade, Britannica continued to dominate the market. A full set was priced at between $1,500 to $2,000. Then in the mid-1980s a little known company called Microsoft (only 10 years of age) approached Britannica Inc. to discuss a potential collaboration.
Britannica turned them down flat. Why would a company with such a stellar brand and reputation that had been successful for more than 200 years team up with a new and unknown company in general, and one that had no place or standing in the publishing world specifically? Rebuffed, Microsoft used content from Funk & Wagnalls Standard Encyclopedia to create what is now known as Encarta. Executives at Britannica could only smile as desperation drove one of its more lowly esteemed competitors into the arms of such a strange and immature bedfellow as Microsoft. This view was only reinforced by the growing sales at Britannica during the next five years, hitting $650 million in 1990.
Just three years later in 1993, Microsoft began bundling Encarta with its MS Office suite of products. While Encarta's content was not nearly as good as Britannica's, it was essentially free. Britannica's sale dropped like a rock. Determined to survive, Britannica came out with a CD-ROM version, but all the information could not fit on one disk. It came on three disks, making it inconvenient for customers because depending on what information you wanted you had to make sure you put in the correct disk. On top of that, Britannica priced its CD offering at $995. The hope was that such a high price for three CDs would encourage customers to stay with the nicely bound volumes. The plan did not work, and in 1994, Britannica launched an online version of its famed encyclopedia. However, the cost of a subscription was $2,000. Again, the hope was that such a high-priced online subscription would encourage customers to stay with the nicely bound, traditional book sets.
Sales plummeted yet further. In 1996, only 20,000 hard copy versions were sold compared with 117,000 in 1990. Owing to its financial difficulties, in 1996, financier Jacob Safra bought Britannica Inc. for $135 million, a fraction of its book value.
Up to this point, the tale of Britannica is a sad one. The size of the change (Britannica shrank by more than an 80 percent) and speed of the change (it happened in just 2 percent of the company's life span), were both dramatic. However, in the end Britannica's fate was sealed not by Microsoft, but by a company that didn't exist nor was its existence even possible in 1996 when Jacob Safra swooped in to try and save Britannica. That company is Wikipedia. In fact, the ironic point of this tale is that virtually all the information we have conveyed about Encyclopedia Britannica can be found at www.wikipedia.com—a free, online, and "open source" encyclopedia that relies on literally tens of thousands of contributors. Neither Britannica nor Microsoft envisioned this form of encyclopedia in 2001, the year Wikipedia got going. Even as recently as 2003, no one predicted that by 2007, Wikipedia would have 1.5 million articles in English totaling more than 500 million words. To put this in perspective, this makes it three times larger than the largest Encyclopedia Britannica set. Who could have seen a pace of change so fast that, in just a few short years, Wikipedia would have 4.6 million articles consisting of 1.4 billion words across 200 languages? In fact, the speed at which Wikipedia is being updated is so fast that even if you read all the new and edited material seven days a week, 24 hours a day, you could not keep up.