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Post industrial opportunities for entrepreneurs

The land of the free, and the home of the brave… oh how we admire that refrain.

Oh, say can you see by the dawn’s early light

What so proudly we hailed at the twilight’s last gleaming?

Whose broad stripes and bright stars thru the perilous fight

O’er the ramparts we watched were so gallantly streaming?

And the rocket’s red glare, the bombs bursting in air,

Gave proof through the night that our flag was still there.

Oh, say does that star-spangled banner yet wave

O’er the land of the free and the home of the brave?

 O’ Silicon Valley, for all your majestic peaks, it’s the dawn of exponential change.

Understanding  “free” and exponential economies are critical for entrepreneurs today.  Downward pressure on our economy is relentless while the cost of living rises.  It is a new and challenging model that our generation, and those who are just starting out, will have to adapt to — or suffer through.  It will take new and creative methods.

It starts like this:

  • Consumers want more for less or free with greater and greater functionality

  • Startups are under more pressure to build companies that sacrifice revenue models for adoption models

  • This, in turn, forces entrepreneurs to build value on investment rounds

  • Investment is driven to maximize returns to limited partners

  • That investment is not being recycled into the startup economy

  • Large players are consuming innovation through acquisitions

  • The cycle of a brand’s rise and fall is measured in a decade, not generations and certainly not centuries

  • Employee pools operate with less certainty and reliance on large corporate structures

  • Entrepreneurial groups rise to meet the customer demand

  • Wash, rinse, repeat… in a spiral  (up or down tbd)

This new order has the perverse effect of driving wealth away from business creation and into turn and burn businesses.  Old models of organic growth don’t fit well in the exponential chrun.  New business models value adoption and acquisition rushing to the finish line without revenue in many cases.  Startups, entrepreneurs, and young people in general, are working for less and less while building valuable IP in Silicon Valley.  It’s forcing an “on the cheap” mentality that is revolutionising the economy and choking it off at the same time.  An interesting viewpoint on this is found here:  Silicon Valley: Top salaries for many, greater inequality for all

The new job interview is to build a company or market for free,  If you succeed you’re hired by being acquired.  Few startups strike it rich these days.  Most of the time you are simply trading your time for a job that pays low wages and the promise of stocks.  The stocks often work out as some low end bonus on acquisition.  Founders, in many cases, just barely make the fabled large payout. It’s a great deal of work to beat the investors 1x – 3x preferences.   Here is the point.  Be prepared for a new reality.  For reference, check out these numbers on Silicon Valley employment stats

It’s time to build a new culture.  While there is a classic service economy, and it does employ many people, it’s not what it used to be.  The last few decades have pushed almost all the margins out of these older lifestyle businesses while increasing the service expectations.  The response to this market force has been to push more and more students into higher education in order earn a higher standard of living and work in the new exponential economy.

Yet, higher education is under unprecedented assault today.  Students can not get all the classes they need to graduate.  Students are incurring higher and higher debt loads.  This is front loading individuals into a market that is asking them to work for free while starting the next big thing.  Entrepreneurship is now a required skill.  Many will do whatever it takes to land the Google or Facebook job, but as I point out, those jobs are coming from this new labor force.  This trend is spreading across the country fast.

Don’t thing think you can live on a farm in middle America will allow you to ignore this new market reality.  Technology is everywhere, and where there is technology, there is a new dawn of exponential change.  Farmers already know this.  The modern combine is an air conditioned trading floor, and the Farmers Almanac is being replaced by FIOS Big Data.  The old jobs are changing, even in middle America.

The new model is exciting and is full of opportunity.  Companies like Google are the first to embrace this company of companies change.  They are working hard to instill new management practice that account for exponential change and new business flexibility.  They experiment endlessly with failure and success.  They acquire from without that which cannot be fostered within.  Is this a panacea?  No.  But they are way ahead of the Microsoft, Hewlett Packards, and Dells.

The churn is on. It’s time to own up and speed up.  It’s an exciting new age of workgroups and lean corporations.  The unsustainable promises of the industrial age, lifetime employment, retirements accounts held by a corporation, gold watches, and mailroom to boardroom advancement are gone.  It’s time for a new promise made by and for the employee.  Corporations will do what they do best.  Form around this new working model.

There is no time to complain, lament or expect that anyone is going to fix this.  It’s not broken.  It’s the way it is because the industrial age and it’s creators had a plan.  Those Icons of industry could never have foreseen this exponential growth.  Organic change will be driven by this exponential devolution of our economy.  Rebuilt on a more atomic level by a dynamic, self-shaping workforce.  Do it yourself (DIY), communities will drive local consumer demand which in turn will drive rapid churn in larger corporations.  Chrun will cause corporations to be more nimble and build like a company of companies, not divisions and departments.  Trading comfort for a paycheck will simply not exist as companies churn faster and faster to meet this new rapidly evolving reality.

So let’s recap:

Oh, say can you see exponentiality’s early light

What so proudly we hailed at the industrial twilight’s last gleaming?

Whose crisp lines and bright stars thru the perilous fight

O’er the markets we watched were so gallantly churning?

And the startups red glare, the IPO’s bursting in air,

Gave proof through the night that our flag was still there.

Oh, say does that star-spangled banner yet wave

O’er the land of the free and the home of the brave?

 

 

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