Musing about the dramatic shift in our society

AxelS
,

Essence of Entrepreneurship

You have an idea and want to build a startup but don’t know how to make it take off. I guess this is my best summary without telling you step-by-step. Step by step is a good technique to teach workers to do an excellent and repeatable task. A terrible help for entrepreneurs.

 

Entrepreneurship - how to start

image ref: Warner Brothers

Wanting to take over the world – like Pinky and Brain?

Entrepreneurship is a mindset – making something with nothing. It is all about talent – no skills or education needed, seriously.

1) Don’t overestimate the value of your idea. It is exactly zero. And therefore, no need to fear your idea gets copied. Humans create on average 20,000 ideas in their lifetime. 99.999% get never executed. With over 7 Billion people, that are 14 Trillen ideas to copy. Passion? It is for pussy cats. Value is created by obsessive and relentless execution – nothing else. As such, share it with as many people as you can – every single day. You need that feedback more than anything else right now. And to amplify, use your social network. That doesn’t cost you anything.

2) Develop the best possible solution concept and presentation. Dream it in your head, spin it around. Don’t let it distract you from thinking about what it cost, what resources you would need, how much time you would need, and what problems could occur. Always remember: If you can imagine it in your brain – you can build it with what you have and some other people’s help. So this was not that hard either? Right? You don’t need money for that.

3) Find your co-founders. Let brilliant people complement you. Look for people that hate to do what you love doing and love to do what you hate doing. Put all your savings into this new company and request (insist) your co-founders do the same. Again no hard work at all. You don’t need money from others for that – but risk everything you have. If you don’t – why should others.

4) Together with your co-founder(s), validate your concept with 42 people you think would have a huge benefit from your product or service. If you can’t find them, find out if you are skilled enough to look for them or if the market doesn’t exist. Decide if you want to continue and build it up. It’s that easy. You don’t need money for that.

5) Together with your co-founder(s), build your first prototype and show it to everybody and their dog and get feedback. This is where you use the money you invested. Let people pre-order products (crowdfunding), so you get the liquidity and cash flow to build your first production batch. Start a social media campaign and get more feedback. If this was successful, you know you can create demand, whether there is already a market or not. Now you already have customers and revenue before you even talked to any investor. If not successful, it’s either because you did not learn how to crowdfund (Search on google) or there is no interest in your product.

6) Now is the time you may look for investors and funding to grow. As you have already pre-orders and good feedback, you validated your idea, and funding is not a problem. And that was not hard either. When getting capital use, it EXCLUSIVELY to grow your business, don’t waste it for technology upgrades. Keep running with your weak product (and it is weak) for the next few months and grow revenue. Get at least 1,000 feedbacks from your users and improve rapidly. Offer to upgrade for free.

This is more or less how the top startups in the world did it. And so did I. The most important keys:

A) Entrepreneurial mindset to solve a problem that many other people have.
10 most relevant founders traits

B) Never do it alone – always run with a co-founder that is NOT your best friend.
Best founders are co-founders

C) Forget the money part; if you need money to make money – you are an investor but not an entrepreneur.

You may want to consider joining the World Innovations Forum global exchange for innovative minds. A nonprofit organization from entrepreneurs for entrepreneurs.

Hope that helps.

/0 Comments/by
AxelS
, ,

Could business be on the precipice of an automation explosion?

Somebody asked me an interesting question on Quora, and I thought I share my answer here:
QUESTION: Could business be on the precipice of an automation explosion?

Precipice? No. Automation is on a “normal” exponential growth.

INDUSTRIAL AUTOMATION

The degree of Industrial automation (meaning production) in Europe and several Asian countries is at over 80% and still accelerating. When we reach 90%, it will decelerate as 100% industrial automation is not even a goal as we still need to continue innovating. Yet, ironically, innovative solutions need a bit of handholding in the beginning. :)

BUSINESS AUTOMATION

When we look at business automation or office worker automation, that is different. We just see the start of the so-called Hockey Stick. Office automation meaning all the hundreds of millions of office workers who do repeated jobs, call and support centers of any kind, sales and marketing automation, initial health analysis at doctors’ offices, base work in architectural offices, industrial design, and what have you. Here we are currently at about 15%. By the end of this decade, it will significantly change.

EVOLVING TO TRUE HUMANS

The biggest problem here is that we are conditioned to do linear jobs – everything, no matter how difficult, is a step by step process. And these can be done by autonomous machines. Forget AI – please !!! Autonomous machines are human-made machines with human-made code and human-made algorithms that can do amazing things. It can paint and write books (see GDP-3) – BUT – that’s absolutely peanuts compared to what your brain can do. If you want to learn something, learn all about Neuroscience.

HUMANS MOST PRECIOUS ASSET

C R E A T I V I T Y – is no match for even the wildest dreams on the AI front. Our Corpus Callosum, which negotiates thoughts between the left and the right brain halves, connects both with approx. 200 Million axons (Nerve fibers). This is the equivalent of a 200 million parallel processor machine. Today’s AI needs roughly 2,000 to 200,000 images to identify a cat in any surrounding environment. And it may take roughly 10 kW energy to complete it. Any of my four kids needed maybe 10 times to hear what a cat, dog, bird, etc., is. All it took is probably an apple and a glass of water. Every millisecond we recognize our world; we compare it with the millions of previous experiences and create a thought about the difference. All ideas ever created were a composition of billions of past experiences so that it may be the next billion-dollar business. We are just beginning to learn something that opens doors and worlds far beyond the technical capability of any machine. We need to defend life in the universe from the threat of being wiped out by an asteroid. We NEED systems such as AI and mathematicians to build algorithms beyond our today’s imagination. We need to understand quantum mechanics and the entangled phenomenon of those. An AI system can only help when the following conditions are true
1) A purpose is created to make it happen (Human)
2) It can calculate all the possible options (machine)
3) it will be built to do that (human)
4) It will be trained to learn or observe specific things (human)
5) It has enough energy to execute the job (provided by humans)
6) It knows the critical moment when it has a “solution” (defined by humans)
Preserving life in the universe beyond the existence of our planet is our job.

WHAT NEED TO CHANGE

Fingerpointing to our 5,000-year-old or more directly 800-year-old education system makes no sense. It is too complicated to change. WE NEED TO CHANGE.
The knowledge explosion is at a staggering rate of 100% every 24 hours. But we still learn 20,000 hours in our life in schools and universities what our great great great grandparents learned. But 80% of the knowledge that we acquired we don’t. There is not a single hour of education that helps kids understand what success is, how to create happiness for themselves, how our political system works or why it no longer works, how to create wealth, why our banking system is what it is, how modern democracy is now dominated by 80% of under-educated people who do not know what to vote for other than what populists, communicate. We still educate with fear and uncertainty to make young people do what the system says.
WE NEED TO CHANGE and educate our children what the future is bringing, the most amazing opportunities that most adults cannot even comprehend.

HOPING FOR THE AUTOMATION EXPLOSION

100% Unemployment rate is the best thing that can happen to us humans. Then we all become entrepreneurs, do what we love, unfold our creativity – even forced to get creative and live a fulfilling, purposeful life. We cannot all be entrepreneurs?
Take a trip to Shenzhen and visit one of those “Maker Markets.” here everybody is an entrepreneur. Some make others assemble, yet others sell and so forth. You will have a hard time finding unhappy people. “But there must be people who really work,” absolutely not because that is done by robots, AI, and other mechanisms that have not even been developed yet – but are coming from the released creativity. “Not everybody is so creative” – ha ha ha visit any childcare, Kindergarten, or just groups of very small kids on the street. They burst of creativity because nobody told them YET – to sit still, don’t do this or that, go to school, get good grades if you don’t you get no job stay poos can’t have a family….

Have a great time in your life.

/0 Comments/by
AxelS
, ,

Do entrepreneurs really “create wealth”?

This was an interesting Question on Quora: Do entrepreneurs really “create wealth”? The money they earn already exists beforehand and would have gone to other pockets. That’s not “wealth creation” but “wealth changing hands”
Yes, entrepreneurs do create wealth. In fact, entrepreneurs are the group that actually creates wealth in its truest sense. Wealth is created through incremental productivity. It means somebody does something that creates more than that person can consume themselves. Let’s start with food:

All living things consume “food” to live. And all living things “hunt” for food. This starts with microbes, plants, animals, and we, the human animal. That’s all we did for the longest time – simply survive – for approx. 5 Million years.

Approximately 12,000 years ago some smart people recognized that if they collected seeds and planted them, watered them, and took care of the growth, they produced more corn than they could consume themselves. So they could trade the excess corn for other things. That started the first and most significant shift in the life of HOMO. It’s called the agricultural revolution. It was the birthplace of wealth creation. We found out that our unique skill: “ingenuity” allowed us to produce more than we needed. Still, droughts and other natural catastrophes killed a lot of people. But we used that skill of “ingenuity” to improve farming and later hunting. We produced so much that we could afford to have some of us do nothing but build huts or work on and with iron or other metals. We were able to build homes and a few thousand years later we were so productive that only HALF of the population was needed to produce food and the other half was used to build things for our protection and comfort. Today, in developed countries, approximately 3% of the population is producing food, enough for the other 97% to do everything else. Some produce tools to be more productive in producing food and others build tools that allow us to transport the food around the planet. The wealth is created through increased productivity. Everybody who is not contributing to the increase of productivity one way or the other is actually committing theft. Speed traders for instance extract millions per day – contributing zero to productivity and simply extracting wealth for their own, from the rest of the society. Today it is legal to do so.


After the industrial revolution about 200 years ago, the increase in productivity exploded and an unimaginable increase in wealth was created. Over the past 200 years a steady stream of food eradicated hunger, steady stream of health care almost doubled life expectancy, steady stream of physical protection, reduced the risk of war, ongoing increase in productivity cut the time to work almost in half. There is a chance to even eradicate work entirely in the next 50–100 years through machines that completely do all the production for us.

 

The more simple minds fear it because they only see unemployment – and workers have been trained – even conditioned – to see nothing but work. But if you elevate the point of view and realize our most powerful talent over all talents it is ingenuity. This ingenuity will provide us with the capability to create more wealth across the entire planet and so much that we can focus on even bigger projects. And that very ingenuity will help to educate future generations to focus on developing their ingenuity more than they focus on developing more workers that we will need to survive threats that we are already aware of.

The biggest of all projects is the ability to make our species survive the lifetime of our planet. The Universe is big enough to do so, but we will need to get there and that maybe our ultimate purpose. But first we need to create the wealth to afford getting there. And only our entrepreneurial spirit – built on our ingenuity – will be able to make it happen.

/0 Comments/by
AxelS
,

Blockchain Transformation | Birth of a butterfly

The recent cryptocurrency development had put a serious dent in the crypto space. The bubble is clearly burst — very clearly. Speculative investors took quite a hit and the money flow from unknown and possibly dubious sources is drying out. What looks like a disaster to some is a very welcome clearance to others.

I’m a Crypto Valley Association Member and an investor and board member in Blockchain Valley Ventures, sitting right in the heart of Crypto Valley. Most recently I received tons of questions — “Where is it going?” “Is blockchain dead” “Is Bitcoin at its end” “Shall we sell?” “Is now a good time to buy?” So let me share my thinking and why I see a more positive future now than a year ago — when everything was just too glossy.

What the caterpillar calls the end of the world, the master calls a butterfly

Yes — some lost millions of Dollars

Remember what happened when the Internet Bubble burst? It wasn’t the Internet that bust but the greed of many investors who just hoped that the craziness would never end. But the Internet itself was never hurt. Today we have not millions but billions of Internet users. Because the Internet makes total sense.

Fast forward, 18 years later, the crypto bubble burst. It’s not the Blockchain that burst, but the investor craziness in a currency that has never shown any value in itself. In the future we will have millions of Blockchain users, using public and private blockchains. Because the blockchain itself makes total sense.

The Future of Blockchain & Crypto

The Crypto Valley Community is working feverishly on the next big steps, the evolution in blockchain technology and crypto currency. Like the software people in Silicon Valley, the blockchain people in crypto valley have a very clear understanding where things will go — because we are creating that future.

Demystifying Blockchain Technology

I feel it’s about time to demystify the blockchain technology. Unlike many people postulate it is NOT this magical architecture running on hundreds of thousands of servers simultaneously and consuming gigawatts of energy just to hide some data in an insanely complex security algorithm. Well you can use it that way — but I actually care less.

Innovative and disruptive smart contracts

The true innovation and in particular disruption to both the software world as we know it and the business process world as we have it, are so called “Smart Contracts”. And this is also why Crypto Valley is so much ahead of the rest of the world. There is a reason why nearly half of the world’s ICOs happened here.

Smart contracts is the actual ‘brain’ of the Blockchain. A Smart Contract does what general software never did: It executes a process autonomously. Very similar to Artificial Intelligence, it is an autonomous vehicle running through the net. And that creates the ultimate power of the blockchain. If an order is entered into a classic ERP system, it requires human action in every single step of the process. Entering the order, processing the order, confirming the delivery, reviewing the payment, observing the shipment and so forth. It makes it extremely slow, error-prone, and costly. The magic of the smart contract that it processes an order completely autonomous based on defined triggers, times, sensors, inputs and no human can intervene or manipulate that process. There is a good reason why IBM, SAP and other big player invested enormously and early on in the blockchain technology. They obviously understood the power of the smart contract technology — which in return requires a blockchain architecture to work in a trusted manner.

The dent in the wallet of a speculating investor will have no effect on the future of the blockchain. And all the current projects here in Crypto Valley show where this technology is already going. We also see why Etherium had such a peak in the meantime: It’s development tools, libraries and APIs had proven to be the most attractive to developers. Also, this will not change.

Shift To New Disruptive Blockchain Applications

As an Investor we obviously are the first to see new companies, new business ideas and possibly new technology shifts. But what we are also seeing right now, is a serious shift in startup quality. A year ago, we have been flooded with whitepapers, which all too often have been a copy of a copy and just yet another crypto currency. That has changed. Today we are very fortunately back to normal. The flood turned into a healthy stream of well thought out and disruptive business ideas. We no longer see the applications that allow a global government be run off of a blockchain but interesting applications in sectors like, supply chain, medical records, pharmaceutical logistics, gamification, business process optimization, IT security, trading, sales and marketing applications and many others where the autonomous processing of smart contracts play a key role for a serious new way of doing business.

Mega shifts on the Crypto side

The clearing air over the cryptocurrency side shows a very interesting development. We will have in the end two types: Security Token and Utility Token. For those not so familiar with the — so far very confusing — crypto side of this world a few words: Cryptocurrency was the “funny money” that transported rewards with the smart contract. If some contractual actions have been completed and confirmed “rewards” or crypto money was paid. That crypto money, very much like the points and other rewards in games or miles, have quickly become so valuable that its value started the craziness that we had until very recently.

In the next evolutionary steps, we are already seeing, we have those two, mentioned above, currency types:

Utility Token

These have a reward characteristic like air miles, points you collect when shopping and so forth. At one point there may be an option to trade it into something or allows you to use it for other features like renewing a software, getting a free flight and so forth. The universal character, the way we can possibly use them across platforms or even trade them makes it a much better vehicle that what we have today. Today’s situation is a convoluted mess of rewards, points and benefits that are so terribly different in their handling that it is actually almost cheating on the consumers to even offer those “benefits”.

Security Token

While they handled inside a blockchain very much like any other token, the purpose of a Security Token in the real world are fundamentally different. These are created to actually have a asset or money equivalent characteristic. Startups can offer shares in their company by using security tokens. The big advantage is that a security token can be traded globally at its designated value and a startup does not need to worry about countless currencies. BUT THAT is highly regulated here in Switzerland and very soon in the US and in the next months or years in other countries. The regulations are by order of magnitude as complex as an IPO but strong enough to prevent money from money laundries enter the ecosystem and will bring the sought after seriousness and investor protection into the game. This major milestone may actually have been the biggest reason for people to pull back their “money” from the crypto world of yesterday and cause the burst.

Looking forward to 2019, the birth of the Butterfly.

@AxelS

/0 Comments/by
AxelS
,

Let’s create leadership in education and innovation, not world domination and war

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.

/0 Comments/by
AxelS
,

The New Enterprise

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

/0 Comments/by
AxelS
,

Generation Y

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.

/0 Comments/by
AxelS

The decadence of Venture Capital

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:

1) Ownership
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.

2) Passion
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.

5) Disruption
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.


/0 Comments/by
AxelS
,

The next big step in our society

Our society is experiencing one of the greatest evolutionary steps in human history

Society_1~3,000 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.

Society_2~ 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.

Society_3~ 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.

 

/0 Comments/by