Far more generalized acceptance of widespread variations in human behavior. All of us who were raised pre-Internet were taught that there is something called ‘normal,’ and I think that whole concept might go right out the window.
Price movements over the last 10 years. Entertainment and communications way down. Education and care way up. Technology and innovation have succeeded in making things like TVs, cellphones and computers significantly more abundant and accessible but have yet to achieve a similar impact in healthcare, education, or child raising. That is the great challenge (and promise) of the next decade.
Particularly liked this post from Kyle Tibbitts on Rate-of-Learning.
Definition: Rate-of-learning is the velocity at which you are aggregating new insights and deploying them in ways that build value.
While that post focuses on ways for individuals to approach startup career choices, this kind of thinking applies equally well to corporations approaching innovation and new business initiatives. Just replace “Normal jobs” with “Existing lines of business” and “Startup jobs” with “New lines of business” in the below.
When starting out in new, non-core areas, learning should be the primary objective. Those that learn fastest and can deploy that new found knowledge most effectively into the market stand the best chance of winning. This is particularly true in markets marked by rapid change and dynamism. It’s like a gyroscope - the speed of the internal spin rate keeps it orientated when forces try to knock it off-kilter. Companies with higher ROL’s have faster spin rates and can withstand greater disruptions.
This is one reason why corporate venture arms could and should be a source of great value. They allow established companies to significantly expand and accelerate their learning capabilities at comparatively lower cost.
Companies Matter Faster
Fred Wilson’s post on “Counting the Hits” led me to William Mougayar’s list of the universe of companies valued at more than $250 million. What I’d really like to see is some data on the *time* it took those companies to achieve those valuations. A chart that plots the time to achieve a $250 million valuation against months from founding parameterized by the year of founding would be quite telling. My guess is that the cohort of companies founded in 2009 and later have been able to achieve that valuation at a faster clip than their peers founded earlier.
I have a thesis that companies matter faster than they ever have in the past. Whatsapp, Instagram, Nest, Snapchat, Oculus, Tumblr and others achieved significant exits after being around for about 5 years or less. Several others have achieved large valuations in their “youth” via funding rounds as well. It doesn’t seem like this phenomenon is limited to lightning in a bottle consumer startups either. Similar trends are occurring on the enterprise side as well.
These companies may be the outliers, but they’re also the ones having an outsized impact on the industry. This has big implications for VCs and corporates alike. When the ability to disrupt an industry happens at a faster rate, you need to engage earlier in the startup lifecycle. This is one reason more corporate VCs and innovation groups are getting involved at the seed stage. Successful startups seem to be growing up faster and faster. And like promising athletes, they seem to be turning “pro” and asserting themselves on the biggest stages at younger and younger ages.
Right to Win
When thinking about new initiatives, lots of big companies talk about needing the “right to win.” I’ve never been a fan of using this entitlement definition of ‘right’ when talking about new market entry.
Yes, companies need to make sure they have the ‘right’ assets and resources to win — meaning the “most favorable or desired” assets and resources to service the opportunity. What they don’t need is the “moral or legal entitlement” to win.
This current age is characterized by a decided disrespect for rights of way. The future yields for no one. Google becomes a car company. Amazon becomes a media company. Nike becomes a technology company. Companies must not wait to till they feel they have the right to win. In this environment, you’re only right if you win.
The future isn’t made by those you feel entitled. It’s made by those you feel empowered to try.
And here’s a phenomenon often true in innovation stories: The people who go to work pursuing knowledge, or because they intrinsically love writing code, sometimes end up making more money than the people who go to work pursuing money as their main purpose
We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.
These people have done at least one Deeply Unfashionable Thing. Such people have intrinsic motivation, native curiosity and social courage.
If only all life’s quandaries could be so easily solved.
That twinge some feel at times like this is akin to seeing the fences go up on the frontier, the record companies signing your favorite underground band, or the parents coming down to the basement party just when it was getting good. We may be past the wild part, but there’s far more potential with this inevitable outcome.
If you do feel that way, don’t worry. This is also the week that Facebook made big investments in virtual reality and solar-powered drones that send high-speed data. A representative from Google gave a talk at the University of California, Berkeley, about Google’s experiments in quantum computing that was cautiously optimistic, but not conclusive. Some disagreed.
There’s still plenty of frontier out there for everybody.
startups are not smaller versions of large companies; startups search for business models and companies execute business models.
Facebook’s ambition for the future of Internet connectivity. I expect them to take an interest in nanosatellites, with their exponentially improving launch economics and capabilities, as an Internet delivery mechanism.
Agree with Semil Shah’s view of Marc Andreessen here:
Marc Andreessen, the co-creator of Netscape and the VC firm which bears his name (which invested $75m into Oculus VR about four months ago), is also very close to Zuckerberg as one of the original angel investors in Facebook and a current board member. I have never met Andreessen, but based on watching many of his interviews on YouTube, enjoying his endless Twitter stream, and the bold thesis of his firm (which has correctly predicted many things — I’ll write on this aspect soon), he strikes me as a true intellectual polymath — not just conversant or convincing on a range of complex topics, but one of the earliest people to connect the dots of high technology at the highest of levels.
His firm, a16z, has recently made huge bets across a range of industries which could present platform-esque characteristics — the software layer for drones, the software for three-dimensional printing, the software for transferring value across the Bitcoin protocol, and so forth. In Oculus, they likely envisioned yet another emergent computer science platform which could rewrite how people communicated with the Internet.
Startups and Driving in India
Reasons why startups are a lot like driving in India:
- Both require healthy disregard for established convention and rules.
- Both require absolute fearlessness.
- Space fills quickly — White spaces don’t stay white for long. If you identify an opportunity, you have to act fast or it will be filled by someone or something else.
- Intense and varied competition — Constantly competing against all manner of man, beast and machine. Jumble of old and new. Shiny Audi A6s jockey for space against heavy trucks, old buses, auto-rickshaws, motorcycles, scooters, bicycles, pushcarts, pedestrians and the occasional camel.
- Horn OK Please — Everyone is always making noise to let you know that they are disrupting and overtaking you.
- Friends and family — Both often put friends and family at risk. Startups often risk their friends’ and family’s money. Drivers in India often risk their friends and family. Rather disconcerting seeing a family of four, including a toddler and infant clutched in Mom’s arms, atop a Hero motorcycle zipping in and out of traffic.