Posts Tagged ‘ transformation ’

Startups … not bailouts

You can count on Thomas Friedman to write a punchy piece. In today’s New York Times article, he advocates that startups create more high quality jobs than bailouts of big car companies or road construction projects. Makes total sense. Of course, one could get into a Keynesian argument supporting higher government spending in toto. However, fact remains, that startups are the engines that create economic growth, prosperity and net new jobs. Think Google or Sun Friedman says.

Immigrant founders + free markets = Innovation.

I spend quite a bit of time in the Boston area startup community. Whether its a 15 year old in a TYE Startup competition from TiE-Boston or a first time entrepreneur, or a serial entrepreneuer, the optimism, energy and vision seems boundless. Everyone wants to change the world. One startup or venture at a time. There is no sense of self-pity or entitlement.

Yet, the single biggest roadblock is source of quality funds. I am not talking big numbers. I am talking $50K to $500K to take a shot at starting the next innovative venture. I am talking solid business models with working technology and passionate teams.  Yet they are caught in a bind … unable to access capital at costs and dilution-levels that can continue fueling their passion.

So, here are my …

3 obvious ideas:

a. First-time venture fund: If we can have a first-time homebuyer tax credit, why not a first-time entrepreneur fund? where the government sets aside $50000 per year for 2 years for each first-time founder of a startup. not as a bailout. but as investible angel capital from the government of the usa. why not? If Techstars or Y-Combinator can do it, why not the tax-funded entity called the GOTUS? $50K is enough to feed a family in most cities, while keeping the entrepreneur hungry enough to want to start a company.

b. Tax-cut for entrepreneurs: Why not? In addition to ‘increasing G’ why not ‘cut T’? Mix the left and right here. For the same 2 years, give the entrepreneurs a deep tax cut so that there is incentive and ability to reinvest for growth. Growth that can create real jobs that in turn pay taxes. Neat, eh?

c. Startup-competition: If the GOTUS can fund primary research in leading universities, why not have a true startup competition where funding can be allocated as advocated above? Mix funding with classical financing stage gates, to ensure that even this $50K is allocated based on real outcomes. No vanilla bailouts.

Why not? If innovation means truly socially disruptive practices, and these ideas are disruptive, then so be the spirit of innovation … thoughts? Comments?



“Sustainable” competitive advantage in tech

I spend a lot of time thinking about “sustainable” competitive advantage in the world of consumer-facing technology-enabled services.  The once volcanic MySpace now appears to be a cooling lump of lava rock.  Of course there is news today that AOL is finally on its own.  Wonder how many really miss Geocities today.

All this leads me to look more closely at valuations of these firms.  During the .com days, at least we had ‘eye balls’, inaccurate as they might have been.  But at least they provided a frame of reference.  Today, we could use ‘clicks’, ‘unique users’, ‘growth rate’ and a slew of other metrics.  However, the big, I guess Billion $ question is … how long will success last?

Twitter came out of … literally nowhere.  Fledgling Facebook overtook MySpace.  AOL, the grand daddy of ’em all risks becoming totally irrelevant to a Facebook-fed generation. 

3 obvious ideas to ponder upon … as an investor / user / competitor:

a) What’s feeding your success? Ironically, it appears that the very hand that feeds success gets bitten.  Consider that the inherent power of Facebook that comes from its millions of users can itself be a liability.  There is literally nothing stopping Facebook’s competition to use the power of Facebook groups to launch its competing set of services.  Of course, there is nothing that could stop users’ leveraging their own social networks to create a tsunami-exodus to a more attractive alternative. 

b) What’s the abandonment rate? The moats keep getting destroyed.  Switching costs are pretty low.  While there is an inherent lock-in that comes in with the network-effect, there is nothing stopping someone from trying a more attractive alternative.  And then, one by one, the network joins.  Until the entire herd migrates to greener pastures.  Almost like humans did in ancient times.  Maybe, just maybe, we are meant to be that way.  Seeking.  Searching.  Settling Down.  Seeking.  Searching.  Settling Down. … … …

c) What’s the innovative alternative? Human time is limited, attention spans even more so.  There are reports that youngsters in Japan spend more time on electronic devices than “on” the Internet.  As we get older, our own preferences change.  We hang out in different places.  Our kids might consider our hangouts ‘uncool’.  Any bets that Facebookers’ kids will find their own hangouts?

So, wither valuations?  What is “sustainable” competitive advantage?  Sure these properties can add features, integrate with other properties and acquire interesting upstarts.  But, in many cases, they risk losing the very simplicity that attracted users in the first place. – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

business value alignment … keeping it simple

i cant but help think about what the world might have looked like about 50 to 100 years ago.  before we had alphabet soups and tons of buzzwords.  when the world was a much simpler place.  yet a place that saw tremendous transformation. 

first commercial flight.  first radio broadcast.  why…. even first cup of instant coffee.  we went through so much change as a human race, yet were not bombarded with noise about the change.

organizations typically go through change all the time.  whether they acknowledge it or not, there is always an undercurrent of organization change and transformation.  some of course, are more pronounced or planned than others.

so, why do we generally approach this topic with a mix of trepidation and trite proclamations?  why do we start with the typical notion of “here is the change cycle… you go through denial, acceptance, … etc etc.”?

shouldnt the conversation really be about business value alignment?

in lieu of the 3 obviousideas, check out my interview on pmopodcast – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

golf gone wild … the john daly experiment

what an interesting collision of color.  to put it mildly. 

check out:,159883

you will note that i put the complete URL in there sans editorial commentary on the choice of words therein.  notice the ‘h’ word?

i could not but help imagine a parallel with organization transformation + communication.  often when leading change, we struggle to find new ways to connect and communicate with our target audience.  we look for ways to make a difference, stand out amongst the crowd … and be remembered.

what better way than to put on a pair of golf pants that look different?  seriously.

3 obviousideas

1. creative compulsion: if no color can be too loud on the golf course … no message can be too creative for the workforce.  look for a particularly distinct way for your message to stand out.  break the habit and do something different … so people notice. 

2. comfortable confidence: notice the cool confident smile that daly carries with him.  in fact when you make a creative impact, it is imperative to look more confident than you normally appear.  you cannot fake creativity, you might as well live it up!

3. make your message meaningful: of course, all flash and no stash is useless.  make sure that creativity + confidence are catalysts to deliver a deeper message.  make it synchronize with the enablers.  however, do have a message.  do have a message.  have a message.   a message.  message.

organization change … lessons from the talladega speedway

what a nascar weekend!  carl edwards went flying in the air, on the very last lap of the nascar sprint series race … literally in sight of the finish line.  after flipping over 15 feet in the air, edwards survived!  7 fans were hurt, luckily no one died. 

organization transformation can be like this final lap.  given the numerous moving parts and pieces of an organization and the permutational possibilities amongst them … it is not uncommon for the outcome of two or more changes to collide at high speeds and cause a wreckage.  unlike this race however, some of these collisions can go completely unnoticed … hence not offering an opportunity to literally course-correct and move towards the finish line.   also, watch how the other drivers course correct at high speed with split-second reaction time!

3 obviousideas

a. when you have at least 2 moving parts in a system such as a changing organization, expect some collisions to occur … the laws of physics and statistics might decide to meet and leave a memorable impression.  in fact, if you do not see some creative tension in the system, ask yourself if change is really occuring.  of course, i do not condone destructive conflict under the guise of change.

b. do not jump to conclusions to blame one driver or the other … the unexpected and uintended might decide to meet.  have faith in your change leaders and change agents … and support their right intentions with the right actions.  watch carl edwards jump out of a flaming car and trot towards the finish line.  empower and enable your change agents to leave the wreckage and recover for the next race.

c. reinforce the culture and spirit of change using every crash as a learning opportunity. the nascar system has constantly become better by incorporating lessons learned from such horrible crashes.  the crash barriers worked.  they will only get better.

remember, if it can happen on lap 499 of 500, it can happen anytime!  so, let us fasten our seatbelts and keep our eyes on the road ahead … leading and sustaining change in the world around us.

innovation @ the speed of … oh, waIT! has an interesting piece by mark johnson from innosight where he suggests that IT must play a role if a company is reinventing itself.

his charge to the world @ large is that ceo’s must think about the role of the cio in business model reinvention.  also, cio’s need to think about the business model taking a business perspective and work with the heads of marketing or biz dev to address opportunities early on…

very timely insights and counsel … more so during this time in our economy when cio’s are facing economic pressures they must make sure that they dont cut back on support for ideation and innovation … even if payoffs dont appear to sit on the quarterly horizon.

3 obviousideas:

a. directionally: think industry first, inside next.  it is alluringly easy to get caught in the trap of internal policies, processes and practices … and end up losing sight of where we are going  … and where others are headed.

b. organizationally: cio’s must have a dedicated internal consulting and advisory practice which is not linked to ‘billable hour’ targets.  take away their time-sheets and chargeback mechanics … give them a healthy business development budget (read: lunch / dinner / golf) and let them interface and interact with your internal customers.

b. practically: dont let IT governance models like project portfolio management process / systems / tools  come in the way of true innovation.  remember, your competition could be innovating and executing at a much faster speed with the benefit of light-weight governance.  you dont want to get killed by your seatbelt, do you?  yes, a rough analogy …