Tuesday, December 23, 2014

Viewing Companies as a Species

It is common that banks would provide credit for companies that are over 2 years old. This screening rule that banks use to filter out budding companies helps banks avoid a lot of bad credit. The reasoning is that statistically it has been show that a large percentage of companies close within the first 2 years of their inception.

It would be interesting to go even deeper with statistics about companies in the same fashion that ecologists use life tables to gather and analyse data about the life and death of organisms. By doing so, one could gain much more insights and be able to understand the business world and the business landscape on a deeper level. Different types of companies can thus be treated as different types of species and a lot can be learned.