Why it’s never been a better time to start a business

Lift off!

It’s ironic that governments around the world are clamouring to support large companies via the promise of jobs given that this is the greatest time in human history to start a business.

Anyone who has a had a crack at starting a venture knows the idea is the easy bit. Ideas are bit like water, absolutely vital, but there is no shortage. The hard part has always been gathering access to resources, and then compiling the resources into a system of revenue. Just think through what we needed in the past to make a business a reality:

Finance – without rich parents, friends or some security for the bank it was over before we started.

Manufacturing – how the heck would you build a facility to make stuff? There was no ‘open factories’ just a little while ago.

Retail – other than opening a store, it was difficult to get on the shelves. Especially in small volumes. Stores wanted mass market products, support by advertising.

Promotion – advertising was barely affordable other than bills posted on local walls. Newspapers, radio and TV – all too expensive for a startup.

It’s no wonder we got told to get a good education, go to university and get a stable job with a multinational corporation. Which, is still an option…. but personally, I think we are all capable of more than that. I think the gift of access we’ve all been given via technology is too precious to waste. Just look at all the barriers to entry which have now crumbled in less than a generation:

Alibaba has more than 4 million factories we can access to get a our dreams made into a physical reality.

E-commerce stores have never been easier to set up, no tech skills required.

We can connect with customers on a zillion platforms – Ebay / Etsy / App store / Facebook / Instagram / Youtube and endless others

We can get funded based on the strength of our work, passion and ideas, not how rich our contacts are.

We can access freelance workers easy on line, work from home or anywhere, and we can start part time, an hour a day instead of wasting the night watching TV shows which teach us how to make a better soufflé .

Why this matters: A.I. is coming and it WILL remove many jobs including white collar work – so we need a rebooted entrepreneurial ethic to invent our own financial futures and create new industries.

If you want more inspiration on your possible future – then check out the first chapter of my upcoming book – The Lessons School Forgot –  you’ll totally dig it.

Why we need to stop using the word Job

Today the federal budget is being released in Australia. And before any of the policies emerge, I can tell you what the proposed objective of every single one of them will be:

Jobs & Growth.

Screen Shot 2017-05-09 at 12.27.31 PM

For me, it is heartbreaking to hear this mantra still being chanted as some kind of plan for the future, especially given the industrial age is officially over. We don’t need to provide people with jobs – we need to provide them with the tools and skills of adaptation, because increasingly, jobs will have shorter and shorter life cycles.

The era of lifelong jobs, lifelong careers or life long anything is over. Quite frankly, jobs are not the solution. We are very quickly evolving into an economy driven by independent actors, attracting revenue from multiple sources. In the future, everyone will become ‘Projecteers’. We are already starting to shift inside and outside of companies, providing skills for projects. The best way to de-risk anything financial is to have many sources of revenue – not just one, which is what a job is. Having a job is the riskiest financial strategy anyone can have. Anyone who wants to thrive in the new economy needs to be totally self-reliant.

The good news? It has never been a better time in history to get on the path to independence. To learn and to reinvent ourselves. The first thing we need to do in every industrialised economy is remove the word ‘job’ from our collective parlance. This word is responsible for limiting the possibilities of millions of people – it steals from the breadth of possibility. It says: be subservient to someone else. It says:

  • Let someone else provide opportunities for you.
  • Let someone else decide what you’re worth.
  • Let someone else decide if you’re qualified.
  • Let someone else decide if they need you.
  • Let someone else decide when to replace you with Artificial Intelligence.

The list is endless, but the point is that it outsources responsibility to an economic machine we have no control over. Wouldn’t it be refreshing if the government came out and said, “We are going to make it easier than ever to start a business”?

A better approach to life is to think in terms of Revenue – how much do I need, where can I get it and what value can I create for others so I can get my fair share. Everyone’s economic future is not based on the job they have, but the revenue they create for themselves. And the government…well, they just want tax payers and centralised simplicity where they give large corporations what they want so long as they provide jobs for tax payers. We all deserve more than that. We deserve an independent future where the government provides resources for people to invent new industries and revenue streams for a modern economy. We deserve new systems that enable nimble skill providers to adapt to what the economy and businesses need. Jobs are something people had when Henry Ford ran the show, and the last time I looked… Ford wasn’t a company anyone revered.

If you like this kind of thinking about the future, then I’d highly recommend reading my new book – The Lessons School Forgot. You can download the first chapter here free. It’s out in June and is a manifesto on how to financially future-proof your life in a rapidly changing world.

The tradeoff Startup founders must never forget

Them:

So, we’ve just nailed our MVP and we are getting some real traction.  Next we’re going to raise capital, get some funding. We’ll probably go to the Valley as it’s easier to raise there. The valuations are more generous. We’re super pumped, finally getting our startup off the ground.

Me:

I thought you were an entrepreneur? 

Them:

What are you talking about? Of course I am – didn’t you hear what I just said?

Me:

Yes, but here is what I heard….  That you’ve finally got something people want, you’re probably solving a real problem and you’re on your path creating value for others, and eventually yourself. But in this process, you’ve got caught up in pop culture. You’ve forgotten that a big part entrepreneurship is independence – creating your own path. So, you’re off to raise money and get caught up in someone else’s objective – that of the venture capitalist. The same group of people who’d rather see you fail trying to build a billion dollar company,  than help you build a $10 million company. Their business model you see, is based on the former, not the latter. 

Venture Capital - the downside

If there is anything startup founders should remember it is why it’s worth doing at all. Startups are hard, and rarely a path to riches. Entrepreneurship is more about exploration and freedom than money. If you want to be rich, there’s more chance of that happening being an employee of a company that already has a billion dollar valuation.

In both cases: a funded startup or being employee – you’ll compromise control. In that case you may as well have the certainty of money that goes with stock options and employment. If you want to be answerable to anyone other than your customers that is.

It’s a rare event indeed when the deal terms favour the founder. Real entrepreneurs find ways to make money independently with that anti-modern thing called a profit. For every example of an entrepreneur succeeding with funding, there are 99+ that do not. It’s a bet I’d never take unless the VC came knocking on my door and / or I could maintain total control and independence.

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What do Google and George have in common?

Famed venture capitalist Marc Andreessen is known for doing lots of things; he invented the first graphical web interface, he said software is eating the world, and his motto is that he has ‘strong opinions loosely held’ – which I dig. We all ought to be able to change our mind when new information arrives.

And let’s face it, new information is arriving daily with new possibilities to match. Take this recent quote from Andreessen:

“One guy can now build a self driving car. We recently backed a founder who had built his own self driving car. Literally, one guy can now build a self driving car. Ten years ago this was like a DARPA Funded Grand Challenge Research Project. Five years ago this was a team of a thousand at Google. And now, it’s George. It’s one of those things (AI & machine learning) that looks like it’s about to tip, there is one George today, and a thousand Georges tomorrow.”

George & his self driving car

He was referring to George Hotz above.

The insight for entrepreneurs is that the pace of change is faster than a linear human mind can cope with. That idea or technology that you think is just a little too early probably isn’t. The most important thing in society, economics, business and Government today is the law of accelerating returns. And this is just one example of it in action.

If you you’d like to learn more, there is a rare opportunity to attend Singularity University in the Souther Hemisphere. An SU summit is being held in Christchurch this November. I’ll be there absorbing everything I can – why not join me? More details are here – I imagine it will sell out quick given the 2 year plus waiting in the Silicon Valley Campus.

Heraclitus & startups

Heraclitus

“No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.”

These words were spoken by Greek Philosopher Heraclitus. I think we can all agree that what he has said can only be true.

Therefore:

No person can visit the same city twice

No person can have the same idea twice

No business can fail twice.

While a second attempt at a similar business venture may still fail, it was not the same business that failed. And it was not the same founders, regardless of their fingerprints.

The truth behind economics is people and culture, both of which are in a constant state of flux.  And while the past tells a story of what was, it doesn’t always tell the story of could be.

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The type of thinking needed in exponential times

Busy road with fumes

If you could choose a house on a busy road, or a quiet road in the same suburb, and price was not an issue, the choice is simple – the quiet road wins every time. And we all know why – less pollution, less noise, less danger. Oh, and quieter streets are usually nicer to look at. The prices of real estate reflect this. A house of similar quality on a busier road can be as much as 50% cheaper.

So here’s a question worth thinking about: What happens to those property prices when all cars have electric engines, and they don’t have tail pipes? You guessed it – there is almost no noise and no localised pollution. Surely then, the prices of houses in busy streets will go up and bridge the existing pricing gap somewhat. In the next 10 years significant amounts of money will be made in property by arbitraging the positive impact of electric cars.

It’s economic plays like this that are easy to see once we start thinking about the impact of the technology, and not the technology itself.

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Software is eating the world – and surfing

The picture below is of surfboard fins. These days they are not permanently attached to the surfboard, but screw in. This allows surfers to change fin sizes and shape for different surf, it also allows you to travel with out busting them.

3D Printed Surfboard fins

The fins on the left come from a company called FCS and they retail for $140. The fins on the right came off a 3D printer and cost exactly zero dollars, well maybe $3 in raw in materials. In general fins sell for between $100 and $200.

Sure the FCS fins on the left look fancy and are made from carbon fibre, the 3D printed versions above are various plastics, but in many ways they are better. I can print fins quickly and cheaply with varying degrees of flex. I can print fins with more flex at the top and less at the bottom, I can even add other technology to the fins like a GPS, to track my surfing without wearing a bulky watch. I can customise my design on my fins, the colour, create personal branding anything, sell my designs to other surfers….the options are endless, and the cost is negligible. That said, I can print fins in carbon fibres, light metals and pretty much any material I want.

It won’t be long before the days of buying expensive fins are over. 

These fin companies are less than 20 years old, and unless they facilitate 3D printing of their product, they’ll be disrupted – maybe me and my new surfing company Sneaky Surf. Mind you this company (FCS) was recently bought by Surf Stitch for $23.7 million. I hope they get their money back quick or it will be a classic diworsification. If they paid a 10 times price earning ratio, they’ll never get their money back. I reckon within 3 years no one will buy fins again.

If you make any widget like the example above, or buy them, then the time is now to move to 3D printed versions. You don’t even need to own a printer – there are plenty of startups on line who can print your designs for you and ship them to you customers. GO – this opportunity to dematerialise a category (like music was dematerialised) is big. We all know that software is eating the world – Make it happen in your industry.

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