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What is the essence of a company?

Companies seem permanent – GE, Siemens, Ford, Nike, Apple, Four Seasons. But what are they really? A company is not a thing, like a shoe, for instance. If you take a shoe off, you can put it in the corner, and it will stay that way until it slowly degrades and, eventually, returns to dust. A company is less real than this: a business is just a pattern. Imagine that North America faced some devastating epidemic and civilization fell apart. But GE would not be a “thing” anymore. The people currently working at GE would not turn up for work. The CEO would not check her phone that day because she’d be trying to stockpile enough food. The New York Stock Exchange would be off, so digital records of stocks and who owns them would be useless and meaningless. The entire company would fall apart within days because people no longer wanted or needed to play their roles within it.

Companies then, are in some sense ephemeral. However, companies also have a gigantic power to reshape the world. My estimate of the total weight of all iPhones ever made is 375 million kg (2.2 billion phones x an average of 6 oz each): material that has been dug up, reshaped and sent around the world in people’s pockets. What is the source of this power? I think the answer is this. A company, at heart, is just an idea. You have to get enough people to believe in the idea externally (the idea of carrying around a phone, the idea of going to a nice hotel, the idea of wanting a car). The idea becomes a way of thinking and being, ingrained into their life. Then you can employ people to service it all: the employees keeping the machine running. The whole thing becomes based entirely on habits. So success means moving something from idea => habit, on a massive scale.

Tarik Barri

Looking at it this way, you see no one has to really believe (consciously, devotedly) in the idea, once it is up and running. When a business is built, everyone just goes with the flow, taking the money they get from doing their job in HR, or buying a phone because everyone else is buying a phone. You don’t need any ‘true believers’ when everything has become habitual. But at the beginning you definitely need believers or advocates of the idea. You need experts in encouraging and supporting people to develop a new habit – whether your client is another business or consumers directly. Even oil companies at some point needed to persuade people that they needed to buy petroleum products. If in a parallel universe millions of people were persuaded they needed to buy interesting shaped rocks, there would be giant companies supplying this.

This is a useful perspective because I want to start a company that is based around psychotherapy. At the moment, not that many people are into this, but it could be as mainstream as sneakers, phones, or going to the gym. The starting point is to get the idea right (‘idea’ meaning the explanation of therapy and why it is great), in a way that persuades people to do therapy, and then support them in building the habit and promoting it to others. Once this self-expanding patterns of behavior is established, it can grow, and eventually support gigantic companies. It’s like the beginning of life, which started from a little molecular replicator. The initial challenge is to imagine (idea) and build (habit) a small but ambitious company, to set up and nurture that initial pattern of life.

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