Perishable Companies: A New Lens for the AI Era of Business

The term “perishable company” came up during a conversation I had with a student in one of our MIT Sloan Executive Education programs, and it has stuck with me since.

We were examining the growth patterns of AIDEs (AI-Driven Enterprises). From a traditional business viewpoint, many of these companies appear to have unsustainable trajectories. The lines on the graphs rise sharply.

For an experienced executive, that kind of growth raises concerns: rapid growth, missing fundamentals, and premature scaling.

However, a closer look shows that it’s not irrational; it’s efficient.

The Efficiency Paradox

AIDEs are changing the rules for starting and scaling businesses. They are founded with small teams, minimal risk capital, and highly efficient workflows driven by AI.

These companies bypass the traditional barriers that once limited growth, like recruitment, management layers, reliance on capital, and geographic constraints. Fewer people lead to fewer bottlenecks. AI offers greater leverage.

The outcome? Velocity.

Growth that used to take years now happens in mere weeks. Yet, with that speed comes a paradox: the faster you move, the more vulnerable you become.

When Growth Becomes Fragility

Traditional companies, known as IDEs (Innovation-Driven Enterprises) or SMEs, add more employees in increase output, but growth slows as a result. Hierarchy creates friction, and decision-making takes longer.

AIDEs, in contrast, can achieve rapid growth while keeping their headcount small. Still, eventually, every business encounters a growth limit. To continue progressing, they will need resources—capital, infrastructure, or human capacity.

Historically, this meant securing venture capital, hiring more staff, and expanding teams. However, each new hire adds some reduction in clockspeed, and each additional layer contributes to lag.

So, the key question is: Can AIDEs keep growing without experiencing slowdown?

Perhaps, but only if they change their understanding of growth.

Introducing the “Perishable Company”

What if we thought about business lines, products, and even entire companies the way we think about produce? Fresh when created. Useful for a time. Perishable if not used or renewed.

Fruits and vegetables go bad when they sit on the shelf too long. So do ideas, product lines, and business models.

Most large organizations, especially conglomerates, carry portfolios of 50, 100, even hundreds of brands. Some of those brands are thriving. Others, if we’re honest, are rotting on the shelf.

And yet, companies often continue to market, sell, and support these aging products, consuming resources that could instead be fueling innovation.

This isn’t just inefficiency. It’s inertia.

What If Companies Were Designed to Expire?

Imagine a world where every business line had an expiration date. Where “going bad” wasn’t seen as failure, but as part of a healthy lifecycle.

Products would be created, grown, harvested, and eventually decomposed with their lessons recycled into new ventures. Organizations would become self-composting ecosystems — continuously regenerating.

This would reduce headcount, unlock capital, and make space for new creation. The organizations that embrace this mindset wouldn’t just survive… they’d evolve.

While historically not possible, the new AIDE model allows organizations to reinvent themselves. The investment we’re used to seeing to spin up a new business unit, product, or venture was significant. But wiht the rapid decrease in upfront investment required and Innovation and Product Development Debt needs, an organization can more confidently shift their focus to new, emerging business lines leaving legacy business lines to sunset.

A Challenge to Business Leaders

Ask yourself:

• What in your company has already gone bad?

• What are you keeping alive because it’s comfortable, not because it’s working?

• What if letting it die could make space for something new… something faster, leaner, and more aligned with the future?

• How will you develop new business lines or products aligned with the AIDE model to reduce risk?

We’ve reached a moment where efficiency isn’t just about doing more with less. It’s about knowing when to stop doing or when to let perishable parts of your organization expire.

AIDEs might just teach us the most human lesson of all: Everything, even success, has a shelf life.