Yes, we lost the leadership but maybe in the future there is no more single world leader. Maybe there are different leaders in different areas. We don’t need a global leader we need global collaboration. With connections across all countries we develop friends across all countries. And with friends across all countries we are less likely to start yet another war just to make the weapons industry happy. There are over 300 Million Americans who no longer want war, instead want to see the tax money put into education and innovation, both being the no.1 driver for jobs and wealth.
Musing about the dramatic shift in our society
The “new enterprise” as I call it is a network of highly engaged individuals or groups of individuals that may constitute the most successful organizationism in the future – organization + organism = organizationism. However it will be quite challenging to build the first of such “new enterprises” as many potential customers may require an organization they used to deal with: a big company. Only time will tell how this part of the business shift evolves. Here is an article from Gary Hamel “Three forces that will transform management” @ the McKinsey Blog that I highly recommend reading.
Let me share some vision for a structure where innovative leaders may create a company in the following way: Read more
Y is after X – it’s that simple. But Y is very different!!!!
97% own a Personal Computer
94% own a cell phone
75% of the college students have a social network account
About 76 Million are entering the job space right now.
Businesses better get ready to know about the power and connectivity of that generation. If you are not connected you are out.
Venture capital is out. The financial world is evolving and so are investment strategies. In a recent post Guy Kawasaki pledged for focusing on inexperienced entrepreneurs. About a week ago I was on a panel with Henry Wong from Garage Ventures inviting everybody who want to start a company to grab his business card. His pitch: “Don’t worry about valuation – think what you can do with all the money”.
An experienced entrepreneur would just roll his eyes and walk away. The ROI on Sandhill Road is no better than Wall Street. So why take the risk? VCs are in trouble and the latest post “In search of inexperience shows it”.
The 7 reasons why entrepreneurs avoid Venture Capital today:
Creating a company and following the entrepreneurial instinct is more than just fulfilling a dream to be one’s own boss. It is creating something that is better than what we have today, a journey to find people who help shape the idea, will buy it because it is better and a journey of evolution, improvement success and failure. Entrepreneurs need partners and not a financial owner that takes 50% of a company for a hand full of dollars and make it their own.
Entrepreneurs are extremely passionate about their idea and need to go their way with no interruption and constant “help” from an investor. Passion is not a guarantee for success but a key ingredient that once broken, breaks the business
3) Founding Leadership
A recent report from Morgan Stanly compared the world leading innovators such as Microsoft, Google, Cisco and others. One of the metrics was passionate founders in the executive bench. 9 out of ten got a check. VCs typically replace the leadership team within 3-5 years and bring “experienced” executives to the team, making the founder a second degree player.
4) Business Objectives
VCs are in the business’ business. Making money from shoving around companies. Butting less and less money in the first place to invest in more and degrade to 1:10 ration of a winning deal to a 1:20 ration. It’s also called risk management. Entrepreneurs aren’t players who like to play in that category. Business objectives of both groups have departed to far from each other.
True entrepreneurs come up with disruptive ideas and try to make a difference. VCs are not really looking for such ideas – even so they say so. When Google was founded, it was Andreas Bechtolsheimer, one of the founding members of Sun Microsystems who gave Google money not a VC – Jee who would invest in this where we have Yahoo. Since Google went public VCs invested in over 50 search engines. Very disrupting. VCs didn’t invest in MySpace or YouTube in the first place but now invest in 100ds of social networks or video sites – very disrupting.
6) Investment Profile
True Entrepreneurs ceased building their business plan to match a best practices list of people like Guy Kawasaki hoping that it matches the trend. The opposite is the case, true entrepreneurs have counterintuitive ideas, don’t follow mean stream and create businesses in very different ways. entrepreneurship is no longer matching the idea of a VC to invest in.
7) Venture Capital Success
Entrepreneurs became very critical when it comes to the success of a VC. While some entrepreneurs don’t really care as long as they get the money – true entrepreneurs do care. Today’s ROI of an average VC firm is lousy. They are under huge pressure to deliver results to their investors in order to maintain their management fees of several hundred thousand dollars per head and keep their Aston Martins and Ferraries. That pressure makes them irrational. And the downfall continues.
At the same time very attractive alternatives raised from that downfall. Healthy individual investors are much more likely to invest in disruptive technologies and true entrepreneurs. Large successful companies all have investment arms and seek people with new ideas and the ability to make the idea a successful reality. Even banks, which kind of evaporated from the entrepreneur’s scene, are back with very creative offers. And as Garage Ventures strategy is just a representation of what other VCs doing, seeking inexperienced entrepreneurs at all cost – the success rate will further decline until Venture Capital may completely reinvent itself sometimes in the very distant future.
Clearly people like me know that they are “unfundable” after stating their opinion. But that’s the point, we don’t care. Venture capital is just no longer of any interest – we are going after true investors who have only one goal: using their money to make more money – instead of expressing their opinions on tactical measures at board meetings.
Our society is experiencing one of the greatest evolutionary steps in human history
~3,000 BC. About 5,000 years ago for the first time mankind evolved into a society. Egypt was the birthplace of a society never seen before. Cities were built, trade was created and business developed like never before.
~ 1,800 AD. About 200 years ago mankind went through yet another dramatic change bigger and faster than any change before: Industrialization. Technology came into our everyday lives, transportation of goods and people around the world was all of a sudden possible. Financial wealth of an average worker was as great as a kings rich several hundred years ago. We doubled average live expectancy and cut work load in half. We created technology that wasn’t even part of the most remote fictions. In just 200 years we changed the face of earth more than in the 50,000 years before that.
~ 2010 AD. We already see early signs for yet another dramatic change. This time it is not trade development or technology but a major social shift. In the next 2-5 years our economy will be affected by that change more than through technology in the past. “Democratization of influence” accessibility to nearly “Omnipresent connectedness” and “Direct Access to Experience” (not only expertise) is providing our modern society a tectonic shift that, in my opinion, has an equal magnitude than our technology development a few hundred years ago. Almost everybody can gain “connections” that just a few years ago was a privilege of the top educated people or best connected business executives just 5 years ago. We already experience that business negotiation on all levels change faster than many people realize. Our society is on the verge to yet another major change. This third major step in our new and emerging society is yet another major evolutionary development of mankind – we will recognize the magnitude in maybe only 10 or maybe 20 years from now.