My Partner, Paul Readwin (our Chief Intelligent Officer at Business Instincts Group) recently send me a great article on the Only Business Model Left. It’s an article that resonates very deeply with us here at Business Instincts Group and PODIUM Ventures.
Shomit Ghose, in his March 12 Forbes article, very aptly pointed out that with the cost of IT has practically dropped to nothing. The barrier of entry for competition is so low and the fight for market share so high that the notion of charging a customer for the privilege of using your infrastructure or code is almost nonexistent. What John Smith is suggesting is the only business model left is collecting your data and selling your information.
The amount of information that is now being produced is so vast, estimates suggest that in 2012 alone we will produce 2.7 Zettabytes (2.7 x 1021) of information. IBM recently announced that that it will be analyzing the data received from Project DOME, an upcoming telescope project that will produce more data in a year than in all of data produced by the Internet throughout its entire history.
With this much information we have the ability to analyze it all with so much more relevance due to the sheer number of data points. The analysis of this data gives us thousands of new perspectives on any given scenario, problem or event.
How many times did the word hope appear over the social graph after a presidential speech and by whom and where?
Why were phrases with the word purple used after new news stories would break in relation to Arab Spring? Anything with a pattern now becomes a point of relevant interest and is relatable to any other point of interest and relevance. The loop is endless and the potential insights are mind blowing.
Superstar startups of the near future are the ones that can produce data points from their user base, combine them with other data points and produce unique and relevant information based on their proprietary algorithms, or the algorithms of others.
Three sects of power brokers will emerge from this.
1.) Those who can position themselves to uniquely capture or create a data set.
2.) Those who can analysis this data.
3.) Those who can market and spin this data.
My prediction is that this data knows as BIG Data, (Yes we at Business Instincts Group, BIG, love the name of this new industry) will become so valuable and pervasive in our society that infrastructure cost will not just figuratively, but actually reach zero point.
Just any FYI, all of the startups we are building at BIG and financing at PODIUM Ventures, already incorporate some form of BIG Data in their business model.
An IPO like Facebook is essentially the white whale of liquidity events for a startup. But it is one outlier among many in a sea of companies trying to find exits.
A Sustainable Startup is built not with an exit in mind, but around the fundamentals of solving a problem. When it comes to exits, and in this case IPO’s, so much is dependent on what your startup is i.e. the specific space you play in and the stage you are at in your Sustainable Startup.
However, regardless of your space and stage there are three basic areas that will always impact your startups ability to move toward liquidity.
1.) Your Valuation – A large and prolific IPO will set the tone for what the sophisticated and broad market is going to value the future potential of an entire industry at. If the IPO is very successful then in general it will be a good time to attract new investors to your Sustainable Startup. The startup ecosystem (and especially industry verticals) are intrinsically linked, what’s good for one is good for all.
2.) Your Access to Capital - If the IPO is successful then in general it will be a good time to attract new investors to your Sustainable Startup. At the very least it should be a time for you to gain exposure in the investment community.
3.) Your Business Model – One of the more interesting facts about Facebook has been the healthy margins and EBITDA it has. What can you learn, adjust, and leverage from the data collection, advertising and payment transactions model they have that can be applied to your Sustainable Startup?
How will This Affect Your Strategy?
The Internet Corporation for Assigned Names and Numbers, (ICANN) is opening up its Top Level Domain, (TLD) registration for custom naming. The TLD is the most right portion of an Internet Protocol (IP) address, the most common of which is .com. TLD’s are now being opened up to customization. What this means is that you can apply for a custom TLD that may be specific to your company or organization (this option is not yet available to individuals). For example, IBM could apply to register .ibm or Apple could apply to register .apple.
The implications are huge and will have a major impact on branding, marketing, and intellectual property as it relates to trademarks and of course search engine optimization (SEO). ICANN is using a serious pricing policy and an intense application process with a short window to quell to the potential overwhelm of applications and conflicts. Applying and getting a custom TLD will cost about $185k plus up to $75k/year of renewal and maintenance fees.
It is not yet clear who has applied for a custom TLD it appears that ICANN is initially targeting larger global corporations and brands. So, what if you are not a large global brand but your brand equity and SEO are highly important to you? Should you apply for a custom TLD? This obviously depends on many factors, most relevant of which is your overall strategic plan and subsequently your brand, marketing and sales plans. One thing is for sure, custom TLD’s are going to affect branding, marketing and SEO in your industry. This being the case it would be advisable to know about custom TLD’s and have a plan as to how you are going to take advantage of them or have a plan by which your non-use of custom TLD’s does not lead to the reduction of your brand equity and sales capabilities.
If you would like more information on custom TLD’s and the possible implications on your business here are some resources:
Decision Point for a new TLDTLDs SEO ImplicationsTLD Application and Registration FeesICANN TLD Applicant GuidebookStrategic Planning, Achieve.Clarity
I am almost through the Steve Jobs Biography and I have had some ensuing discussions about his leadership style and that of other leaders. This discussion tends to leads to a “whose style is best or most effective?” conversation. So much talk in management circles these days revolves around modeling yourself as a leader that I wanted to address this inevitable but dangerous trend.
Many wonder who they should model themselves after; my own personal and mentoring experience has show that the best style to model after is your own! Most every leader or developing leader will claim that they have a style and are more than happy to describe it. What I have found is that many entrepreneurs, managers and CEO’s are biased toward the latest CEO or Leader in the media who seems to be garnering great results. So when you hear someone describe his or her leadership style, it quite often reflects the leader who is most recently on the mind of that person.
The fact of the matter seems to be that a certain style works for a certain type of person. The “secret to success” is uncovering, developing and exploiting your own strengths and style. So, how does one truly develop their leadership style? How does one know which style works for them through thick and thin? There are as many answers to these questions as there are styles and strengths that leaders have.
Consciously developing your leadership style is something that most leaders do not consider, mostly because they already think they know who they are. Before you can know who you are there are four primary questions each leader needs to very honestly ask and consciously know the answer to:
1.) Who Am I?
2.) Where Am I?
3.) Why Am I Where I Am?
4.) What Am I Choosing To Do About That?
By knowing the answers to these questions, a leader will have a conscious basis upon which to deal with every situation. Second, recent bias or being swayed by the “leadership characteristics of the day” will have less of an impact on the leader.
Learn from the style of others but do not try to be someone else – Know who you are and lead as such.
Last week U.S. President Barack Obama addressed the nation with respect to the U.S. debt crises, “In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card.”
With the U.S. government coming within days of defaulting on its debt we felt compelled to look at the phenomena of debt, its insidious nature and the lure that it holds.
Why is it so hard for Governments to live within their means? According to the Right, it is because we do not have discipline and according to the Left, it is because we have a responsibility to ensure a secure social fabric.
In Scott Peck’s classic book, The Road Less Travelled, he talks about how people that are the most successful in life are the ones that can delay gratification the longest. This certainly seems to be common sense and the demand that many are making of politicians to reduce debt all over the world. However, I would assert that the solution is not about discipline or responsibility but rather about gratitude.
Imagine if we could realize that living within our means is not about delaying gratification but that it is about being grateful for what we have. If we live in gratitude for what we have, the need to delay our gratification does not exist and thus the ability to live within our means is automatic and easy.
Does it not make you wonder how in a country that is the richest in the world, that has the discipline to achieve amazing goals and the responsibility to hold 300 million people accountable to the law can’t live life with the highest amount of gratitude for the things that they have?
We are not going to solve the U.S. debt issue in one fell swoop but if you want to try an experiment and do your part try the following: For the next 30 days be consciously grateful for what you have by telling someone all the things you are grateful for each day. See if it is easier to want less (delay your need for gratification) at the end of the 30 days. You can keep track of the things you are grateful for on Gratitude Log.
Cameron Chell, CEO