Mechanism
Demographic Stochasticity
TL;DR
Random fluctuations in birth/death rates can crash small populations.
Random fluctuations in birth/death rates can crash small populations. If a population of 50 individuals happens to produce no offspring in one bad year, or all offspring are the same sex, the population can spiral to extinction.
Business Application of Demographic Stochasticity
Small organizations are vulnerable to random bad luck - a few key departures, a couple of lost deals, one bad quarter can create cascading failure that wouldn't affect larger organizations.