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About the Author
Growing up in the Southern California surfing culture of the 1960's, he hitchhiked Europe at age 17, skied. rock climbed, played the piano in melodramas and bars through college in Colorado, and talked his way into an investments/banking job at 22. An M.I.T. business degree, 21 years at Citibank working in 6 countries, a son born in Hong Kong and two daughters born in Singapore, and it was time to pursue other dreams. He left banking at the top and became an artist, race car driver, and spent time with the family teaching the kids to surf, ski, love animals, and other important things in life.
Early involvement with the Internet through angel investing led to co-founding and leading Inter.net, the first global consumer ISP with operations in 14 countries in early 2000. After 16 years, the gang of international entrepreneurs are still close friends. David is probably the oldest millennial in existence. He now writes, mentors entrepreneurs, coaches CEOs and is still traveling despite having flown over 3 million miles. He and his wife live in Switzerland.
Read an Excerpt
Understanding the Gap
“If Internet Explorer is brave enough to ask you to be your default Browser, you're brave enough to ask that girl out.”
Abraham Lincoln, 1863
Of course Abraham Lincoln knew nothing about Internet Explorer, But you probably didn't know that he receives the most attributions for modern sayings in social media by Millennials. It's an inside joke. Is Ruby on Rails or the Block chain part of your usable cocktail party? lexicon? Probably not if you are over 35. The joke of the 1980s was that less than 10% of the U.S. population could program their VCR. It's gotten worse. We're all still here and the VCR is not. What if you are an executive leading an established company trying to keep up? You can't just download updates and hit restart every 5 years.
The pace of technological development is happening faster than executives can keep up to date with. At first this was shrugged off as being interesting, but not considered a serious mainstream competitive threat. The mindset was, “These are kids with startups. We have history, a brand, customers, experienced management, capital, product development, and established infrastructure”. What a few years ago were thought by corporations to be their established advantages are now becoming disadvantages. The two most valuable brands in the world are Apple (1976) and Google (1998). Senior managements are just now waking up to the seriousness of the changes being brought by entrepreneurs and the Internet. The senior executives and entrepreneurs are worlds apart. Believe me, I was an executive at Citibank for over 20 years and left and co-founded and led an entrepreneurial Internet company for over 10 years. I have lived in both worlds.
The average age of an S&P500 CEO is 55. The average age of a “modern” tech entrepreneur is mid-20's (Google 25, Dell 19, EBay 29, YouTube 30, Facebook, 26, Word Press 23, Amazon 30, etc.). Technical developments that impact the market are unfolding at such a pace that CEO's are at a loss to keep up. It's like there are a “thousand flowers blooming” outside their walls. There may only be 15 of the thousand flowers that make it to maturity, but there are another thousand sprouting right behind with the next latest development. This is happening at such speed now that even “sprouts” are being overtaken. Netscape, the first Internet IPO, is where? MySpace, started in 2003, was bought by News Corp in 2005 for $580 million and sold in 2012 for $35 million. All in less than 10 years!
Consider the history of the calculator. It took 3,700 years to move from the abacus to a mechanical calculator and 250 years from mechanical to electronic. Yet it would take barely a decade for the calculator to make its third metamorphosis, from a heavy, bulky, expensive desktop machine that needed AC mains power to a cheap and compact battery or solar-powered device that would slip into a pocket or wallet (http://www.thecalculatorsite.com/articles/units/history-of-the-calculator-2.php). Now, who needs a small handheld calculator when we all have smart phones? Today's average smart phone has more computing power than the computers that sent a man to the moon. It also has wireless cellular, Wi-Fi, GPS, email, a camera, music, movies, and can make video calls anywhere in the world for free.
All these new gadgets and Internet things are interesting to us, the users. However, there are probably still less than 10% of us (over 35) that can set up a 3-way Skype video-call. But the biggest impact is in how these new tools are being used by entrepreneurs to challenge the established business landscape. For example, Amazon, founded in 1996, had $74 billion of sales in 2014. We are not all spending an extra $74 billion at Amazon. Amazon's sales were taken from other companies. This is an example of a massive market share grab the likes of which are probably unheard of. Who were these sales taken from? CompUSA, Borders, Tower Records, Circuit City, Musicland, etc. have all gone out of business.
Did these companies' executives not have the resources, the consultants, and the strategic planners to see the shift to online sales being launched by a 30 year old? Even the venerable Kodak has fallen. Eastman Kodak, founded in 1888, was a photography industry leader and invented the core technology of digital photography. It filed for bankruptcy in 2012 and sold most of its patents to Apple, Google, Facebook, Amazon, Samsung, Adobe, and Microsoft.
Corporations, with their revenues, customers and margins under assault, are responding by using technology to attack their legacy cost base, introduce efficiencies and new services for existing important customer segments, and reduce management layers. What had been an advantage before the Internet has become a liability. Brick and mortar offices, legacy installed computer systems, armies of experienced managers, well-developed bottoms up planning and budgeting exercises are all slow to respond, very costly, and hard to change. Cost cutting and “right sizing” have become a way of life in large corporations.
By contrast, the young entrepreneur is in a candy shop of new tools: social media, mobile devices, new programming languages, inexpensive marketing, GPS, drop shipping, online payments, crypto-currencies, etc. They are completely focused on what is new, what they can create using these tools, and collaborating with peers almost as if they were an online art colony of emerging impressionist painters sharing a dream of the future of painting. They don't have legacy infrastructure to deal with or revenues to protect. They are excited to use the new tools to transform or obsolete an existing business model be it giant bookstores or branch banking.
This will give you an idea of the battle going on in the marketplace. No guns or bombs, but definitely turf changing hands and new battles launched daily. The two sides are in their own world, different age groups, technical vs. business education and experience, and really have very little meaningful contact with each other. It's like those thousands of flowers growing outside the walls of a stone castle on the hill, each one a new startup. The castle may not disappear, but there is a whole new world happening outside the walls.
Table of ContentsJohn Shepard Reed. 9
W.L. (Bill) Schrader. 11
Understanding the Gap. 17
Entrepreneurs vs. Innovators . 25
Examples (or not) of Executive Entrepreneurialism. . . . . . . . . . . . . . . . . . . . . . . .31
The future of corporations and why Entrepreneurialism is so important . 38
Traditional Business Organizations. 46
Alternative Organizations. 52
Organizations of the Future. 57
Examples of Organizations of the Future Today. 63
Traditional Decision Making. 66
Future Decision-making. 73
Legacy Business Reliance. 78
External Market Awareness. 82
Company Culture. 86
Creativity and Innovation. 89
Strategy for the Entrepreneurial Executive. 94
Ditch the Ego and substitute curiosity. 98
Take Risk on the Legacy Business to Free Resources. 104
Create New Information Flows to the Executive. 107
The Threat and Value of Information. 115
Development of a Knowledge Subculture. 123
Establish New Parallel Businesses. 128
Post Script: The Importance of Social Media. 135
About the Author. 140
What People are Saying About This
“Yes, we knew this would happen, and we knew it would topple governments, erase borders, disturb all kinds of money flows…” --W.L (Bill) Schrader Founder and CEO PSINet “Father of the commercial Internet”
“I liked the book. It made me think. I should have been more bold.” --John S. Reed Former Chairman & CEO, Citicorp