Technology is no longer an industry; it is a layer transforming all industries. So there is a lot to learn from how the tech platform companies have secured their dominant market positions today. They have understood some basic principles about the Future:
• Consumers are driving all purchases; the consumerisation of technology
• The world is driven by networks
• This in turn makes exponential growth the norm
• Costs are strictly aligning to revenue, and everything is moving to a unit economics basis
The question Ariadne started asking itself 8 years ago which led to the launch of EntrepreneurCountry in 2008 and the publication of Welcome to EntrepreneurCountry in 2012, is what happens to the rest of the world? Surely it can’t be that 25 tech platform businesses in Palo Alto clean up and everyone else goes bankrupt. So therefore?
What we realised an economic cycle ago and through our work in the tech industry for 25 years and with our portfolio companies for 15, is that the winners of this digital age are the companies who understand their role in the ecosystem and are organising the economics for it.
What Ariadne also knows:
• Disruptive tech happens at the beginning of a 6o to 80 year cycle; the second half of that cycle is when the establishment embraces it to get to the future and become part of the new common sense (Carlotta Perez)
• Transaction costs which corporations had been set up to aggregate are now possible at the individual level (Ronald Coase)
• Giving people assets drives them to create prosperity (Hernando de Soto)
• Early Adopters are critical to establishing the new common sense (Geoff Moore)
• In order to lead your industry, you don’t want to compete well, you want to create a new market space (Renee Mauborgne & Chan Kim)
We tie all of this up combined with our deep understanding of how companies we’ve advised and invested in have won over the past 15 years:
• First Tuesday – connected a continent’s entrepreneurs with financiers
• Espotting – first Pay Per Click business globally
• Zopa – first P2P business globally
• Monitise – created an economic model for mobile banking
• Skype – enabled individuals with P2P connectivity
• SpinVox – all B2B businesses are now B2C2B
• SoundOut – the obvious goliath to go to market with tends to resist; reach out to all natural allies
• BeatThatQuote – individuals should have an economic upside in the use of their data
EntrepreneurCountry enables mid to large enterprises to become Ecosystem Economics companies – enabling them to win in the digital age.
Because of the technology discontinuity that networks and exponential growth bring, you can’t get to the future from the present in a straight line. EntrepreneurCountry enables Goliaths to airlift themselves over the discontinuity into the future to iterate around hypotheses about their business and their industry. By testpiloting these hypotheses in the EC marketspace, they can create product / market fit for their new businesses.