Staying Power: Business Longevity
28 May 2024

A third of new business fail within their first two years, and half within the first five years. You are also likely to outlive the biggest businesses around today – the average lifespan of a businesses on the S&P 500 Index being just 15 years (this figure according to Prof Richard Foster from Yale). This lifespan varies depending on who you ask. 18 years, 21 years, all kinds of guesses and numbers are being thrown around by everyone and their cousin, including some morally bankrupt cesspool consulting firms this blog shall not name.

Either way, the big names seldom make it past adulthood, and surviving in business is at least as hard as – if not nearly as much fun as – thriving. To keep going, year after year, is sustainable only if the business makes money (a business that doesn’t make any money is a really, really expensive hobby).

Success is survival. In asymmetric games, like business, you can’t ever really BEAT your competitors. You can take market share or lose it. Differentiate or commoditise. Serve more or fewer segments better or worse. The only final metric, the real bottom line if you will, is to outlast the competitor. They are now in the pages of history (and nothing is more irrelevant than current affairs history) – while we’re still here. The undeniable sign of success.

Dutch Tulips gave the world its first stock markets, arguably, and inarguably also its first stock market crashes. But business concerns as conceptual units exist far longer than constructs like corporate entities. Some businesses, in fact, are so old that they predate the existence of companies – as we know them – altogether.

Semi-state institutions that provide money itself tend to be old. The Paris Mint opened its doors in 854 AD, and England’s Royal Mint wasn’t far behind in 886. But like all free market capitalists with a bent to Austrian Economics, this blog doesn’t count semi-state enterprises as real businesses, and when it comes to the oldest businesses in the world, we don’t have to.

Staffelter Hof in the German Rhineland is a family run winery, distillery and guest house that is still going, from 862.

These days restaurants come and go – but St. Peter Stiftskulinarium, was speculated to have been in business since before 803. Austrian hospitality, once given, seems to glow for ages.

But there are even older companies still – and to find many of them clustered together, it is necessary to go East, to a land that actually has a name for companies that are older than a century (and holds all of the world’s oldest businesses… Japan.

The oldest of them all, the grandpappy of all business concerns: Kabushiki Gaisha Kongō Gumi. Founded in 578, a Japanese construction company that works on the design, construction, maintenance and repair of Buddhist temples and shrines. I’d say a track record of 1446 years says something about a business. They do this, they do this well, and they don’t try to be all things to all people.

Talk about sticking to the knitting…

The next three oldest businesses, all in Japan, are all hotels. 705, 717 and 1718. Temples, wine, beer, hotels… the odd sheep farming or metal working concern. It would seem that over the last millennium and a half, people can be counted on to have a drink, visit places, and be willing to spend their money based on little more than a warm welcome and a genuine smile.

Something that today’s international, diversified mega-corporations should do well to perhaps learn from.