As IoT connectivity becomes as common as electricity, entrepreneurs will radically transform the business sectors that affect our everyday lives.
Exponential entrepreneur Steve Case is someone who should be listened to. As co-founder and CEO of America Online (AOL), in the early days of the web he ran the iconic business that popularized access to the internet and instant messaging, consolidating the term “Internet Service Provider” (ISP) and leading to the biggest merger of the time, with Time-Warner in 2000.
In 1993, AOL had a value of $70M, 200 employees and 180K subscribers. Seven years later, it had a market cap of $163B, 4000 employees, and 25M clients. It managed half the internet traffic in the US and was worth more than General Motors and Ford combined. The jingle "You've Got Mail" was etched into the memories of a generation.
The Third Wave of the Internet
Case’s book, The Third Wave: An Entrepreneur’s Vision of the Future, is part autobiography, part manual for the future, and part manifesto. It’s a guide for businesspeople who yearn for ventures with far-reaching social impact and disruptions in traditional industries, who learn from failure rather than fear it. It covers the early era of internet business and its hype-cycle as an emerging technology: the turbulent beginnings, the collective euphoria, the disenchantment–the burst of the dot-com bubble in 2002–the realistic refocusing, and the productive maturation.
Case was inspired by Alvin Toffler’s The Third Wave (1980), which described three waves in our society: the first preindustrial (agricultural) wave; the second industrial wave of the Industrial Revolution; and the third (current) information wave, with nearly unlimited access to information.
As a tribute to Toffler, Case structures the evolution of the internet into three waves (paraphrased below):
1. The First Wave (1985-1999): building the infrastructure and foundation for an online world: AOL, IBM, Apple, Cisco, Sprint, Sun…
2. The Second Wave (2000-2015) of search engines, apps and social networks: building on top of the internet. Google, Amazon and eBay turned their corners of the internet into one-stop shops. Facebook, Twitter, Waze, Snapchat developed new digital communities.
3. The Third Wave (2016-) of internet-enable: everything and everyone is “connected,” moving from “the Internet of Things” to the “Internet is Everything.”
In this third wave, the internet stops belonging to internet companies. Products will require the internet, even if the internet doesn’t define them. The term “internet-enabled” will sound as ludicrous as “electricity-enabled,” as if either were notable differentiators. The Internet of Things (IoT)–adding connected sensors to products–will be limiting, because what’s emerging will be much broader: the Internet of Everything. (Paraphrased from here.)
This third wave—the ubiquitous connectivity of everything—in which the internet provides the global infrastructure that enables platforms to be managed in real time, is also the era of Artificial Intelligence, IoT and enabling technologies.
In this third wave, entrepreneurs will transform and disrupt the business sectors that most affect our daily lives. Case notes the importance of entrepreneurial trait of perseverance. He cites XPRIZE founder and Singularity University co-founder Peter Diamandis, demonstrating why big corporations have serious difficulties in innovating in this new era: “It isn’t that entrepreneurs are smarter than companies, it’s that they are trying more crazy ideas, taking more shots on goal,” which is a good definition of the entrepreneurial concept of moon-shooting.
Without mentioning it explicitly, Case adds moon-shooting to the management concepts of entrepreneurship and leadership, which creates an energizing, optimistic business culture eager to be highly disruptive and in which fear of failure doesn’t exist, since it’s seen as a continuous learning process towards an ambitious final goal. The Silicon Valley mantra of “shoot the moon, fail fast, learn quickly” could be extended to corporate culture: “think high, fail often and cheaply, learn faster.”
Large Companies must Imitate Entrepreneurs
Case's vision of radical change in traditional industries is of great concern to corporations. A 2015 study states half of the best companies in their respective sectors may disappear after 2020.
Large companies’ business transformations tend to be ineffective, at best, relying exclusively on incremental innovation and developing standardized talent within their corporate culture. Firstly, they view innovation as linear, evolutionary processes limited by rigid, long-term strategic plans that aren’t reviewed until the end of the period, and fail to consider the exponential speed at which the Fourth Industrial Revolution evolves. What’s more, the periods are too long and burdensome, when speed and agility are factors of success. Secondly, they acquire talent but do not create an environment that allows for the development of a new adaptive corporate culture. As Peter Drucker said, “Culture Eats Strategy For Breakfast.”
Siemens employs 90,000 scientific researchers. Monsanto, General Electric, and other innovative companies compete for the brightest minds in their industry in the world. They’re awash with masters and doctorates. The raw talent is there, but the question, according to Case, lies in how it is organized and whether the culture helps mobilize them to innovate at an exponential speed. Will failures be seen as learning opportunities for companies? Or will they instead be criticized, their leaders given the thumbs down as in Ancient Rome, their careers within the company sentenced to death?
Employing talent simply isn’t enough – employees have to have a voice, as well as the resources, the coverage and the environment that allows them to test marketing their ideas. To survive, companies’ innovation teams need to mirror the perseverance and start-up mentality of entrepreneurs.
Photo by Teoh Chin Leong
More about Steve Case’s vision:
- Forbes: “Steve Case offers Advice For Entrepreneurs of The Third Wave” (Highs, 2017).
- USA Today: “Steve Case: ‘Third wave' of internet will help Middle America business” (Guynn & Swartz, 2017).
- Google Talks: “Steve Case: The Third Wave” (Grove, 2016).