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Dien Rice November 18, 2000 08:56 PM

Volcanos and fold mountains in business....
Mountains can be formed through different processes, and how they evolve can be like businesses....

There are fold mountains, which are created by the frictions of plate tectonics, as the continental plates push into each other, pushing folds of land into the mountains we see. This is how Earth's highest mountain, Mt. Everest, was created.

Mountains can be created through volcanic activity. That's where the liquid magma beneath the earth's crust pushes up, also usually between the plates in the Earth's crust. As the liquid rock pushes up, and bursts through the crust, it cools and hardens. Over millenia, these can rise into volcanic mountains. Volcanic mountains are the main sources of mountains in some parts of the world, including live Kilauea volcano on the Big Island of Hawaii, or Mt. St. Helens in Washington state.

A fold mountain is a gradual process, taking millions of years. However, slowly but surely, it grows and grows, until it towers over everything else.

Volcanic mountains can be much faster, taking thousands of years, instead of millions. But they don't get as high as their fold-mountain cousins.

It is the difference between slow but steady growth, or rapid growth that then peters out.

Sometimes it can be possible for a business to grow too quickly, so you it loses control of its finances. It is like becoming a volcano. It can be very exciting, watching that growth spurt up. But if it's not careful, it could explode like Krakatoa, where the explosion ends up destroying the whole mountain.

A possible example of an exploding volcano is Priceline.... It got a LOT of publicity (partly because of the new concept, and also those ads with William Shatner). At it's peak, Priceline's shares were valued at over $160 each -- but now you can only buy or sell them for around $2.75. That's a loss in the stock price of 98.3%.

Though not all volcanos explode, of course....

I think there is no real right or wrong answer here regarding speed of growth. Rather, it's about staying in control of finances, while still growing.... What do you think?

Dien Rice

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