CHAPTER THREE
Collective Behavior
Collective Collapse
Yahoo! hit the wall in December 2000. It happened almost overnight. One quarter, the firm was growing profitably; the next, it was losing vast amounts of money and shrinking. Cisco hit the wall one month later and wrote off close to two billion dollars in inventory. Why, and more interestingly, why so suddenly? Yahoo! and Cisco failed because their vast business ecosystem slowly became increasingly unhealthy, and finally collapsed. Even though their downfall was sudden, no sudden actions triggered it. The violence of their collapse was instead a testament to the frequently bewildering collective behavior of distributed networks of organizations.
As with species in a biological ecosystem, ...
