In many respects, whether employees return to work or work from home is part of a broader discussion concerning the intersection between technology and human capital. The direction that is taken will have dramatic implications concerning how we manage human capital in the future.

While many would argue that the previous statement is melodramatic, it is increasingly a reality that human civilization is running into. The value of human capital has steadily been declining since the Industrial Revolution in the 18th century. Thanks to advances in automation and artificial intelligence, individual productivity has consistently increased since the Industrial Revolution.

Many would argue that human civilization has shown its adaptability with regards to automation and artificial intelligence. While the transition has been difficult, individuals whose roles have been eliminated have managed to find new roles. At least, that has been the perception since the Industrial Revolution. The reality, though, is mixed.

While many individuals have adapted to the new realities, the reality is that individuals may not have traded for roles that were one for one but may have traded for roles that moved them down the economic ladder. In addition, there were probably many individuals who weren’t successful in transitioning and then ended up an unemployment statistic. All in all, not a successful transition for human civilization.

Today, human civilization is on the cusp of another transition. While some state that it is a continuation of the transition that has occurred since the Industrial Revolution, there are significant differences compared to those past transitions.

One of the biggest differences between previous transitions and the current one is the speed that this transition is occurring. In many respects, the speed of the transition has greatly accelerated versus what happened in the past and that is thanks to the addition of artificial intelligence.

That acceleration is a critical component of the current transition and is creating a general malaise amongst the wider population. Unlike in the past, artificial intelligence is pushing the speed of the transition well beyond the ability of individuals and human driven organizations to adapt. 

One could argue that automation and artificial intelligence during previous transitions were manageable by humans. The changes that were required to take advantage of automation and artificial intelligence within organizational processes were slow enough that humans could adapt to the changes. Whether through re-education or adapting to equivalent jobs, humans could transition given their current abilities.

Today, however, artificial intelligence and the transitioning of the economy from a physical one to a software one has accelerated the shifts that employees must deal with. Perhaps beyond that of human capacity.

In some respects, artificial intelligence is the beginning of redefining what human capital means in the economic system. For centuries, human capital has been a critical part of powering the economy but perhaps we are on the cusp of eliminating or, at least significantly, diminishing its need?

For several decades, we have managed employees and organizations to a mathematical standard. Whether it was forecasts or performance models, there was a constant push by organizations and management to achieve those forecasts and performance models.

In many respects, that constant push wasn’t unwarranted. With processes primarily being driven by humans and the processes that enabled humans to produce goods and services, there was always room for improvement. Until potentially now.

While artificial intelligence is still in its infancy, the rapidity of its improvements continue to astound. It still may not be ready for prime time but the rate of advancement and its potential means that employees and organizations will have to adapt sooner than expected.

What does this adaptation look like? For many, there is a belief that it will look similar to what has come in the past. However, there are an increasing number of individuals who look at the current transition as something of an unknown. Indeed, it could potentially be a dramatic transition to the extent that it eliminates the need for human capital in the economic system.

In the past and, to a certain extent, the present, organizations have continued to push for efficiency. For centuries, managers were always looking to maximize throughput via the resources at hand. Whether optimizing the number of employees or reorganizing the division of labor, managers always had innumerable opportunities to improve efficiency.

What are the standards that managers are leveraging to manage? The simple answer is a mathematical formula, one that is predicated on perfection. In many respects, the need to manage to perfection has not only driven the impetus of managers for decades but some of the contra reactions as well. These contra reactions include the rise of unions and labor employment laws and regulations.

While many would argue that the constant tension between managers and employees is a natural one and should be encouraged, the latest innovations in technology have the ability to completely disrupt the natural tension. Automation and artificial intelligence have the potential to tip the scales in favor of managers and efficiency more than ever before. It begs the question concerning what will happen to the average employee.

As advances in automation and artificial intelligence continue to accelerate and disrupt not only blue collar professions but increasingly white collar professions as well, the question needs to be asked, what is the role of human capital in the economy? Putting aside creativity for the moment, if one looks at the traditional role of human capital in the economic system, it has been for the creation of goods and services.

While many entrepreneurs and futurists would state that just as in previous transitions workers will find new roles, is that realistic, particularly if automation and artificial intelligence continue to advance at speeds which no human can easily replicate? Are we entering an era where replacing human capital is no longer about finding lower cost human capital but of technological capital instead?

For the most part, technology has been leveraged to improve the productivity of employees for decades. It has been a reality of every transition and it allows organizations and managers to drive towards “perfect” efficiency. However, as automation and artificial intelligence becomes more “human-like”, at what point does it become futile for humans to attempt to keep up? Not only that, what will the purpose of human capital be in this fully automated economy?

The post Can Humanity Keep Up With The Rapid Technology Changes In The Economy? appeared first on Global Super Connector.

However, the latest trend which has alarmed managers and executives are individuals who don’t actively quit but instead do the bare minimum to keep their positions. Known as “lying flat” or “quiet quitting”, for some it is an act of rebellion against a system that continues to treat humans as disposable widgets while for others it is an act that could lead to the downfall of civilization.

Why the divergent perspectives? In many respects, it is not only symptomatic of the uncertain future of what work is but what it means for human labor and the recognition that something is changing. 

For much of human civilization, we have relied entirely on human capital to drive the advances we have been able to achieve thus far. Whether one references the building of the Pyramids, the painting of the Mona Lisa, or the launch of the Apollo missions, all these civilization building feats leveraged human capital. 

Now, however, human advancement is moving from a complete reliance on human labor to something different. What that difference will look like and when a general direction will appear is an open question. It is one that is making humans nervous and justifiably so.

For much of current economic history, we have been driving human capital to be more “machine-like”. Whether it is “management by spreadsheet” or the development of the assembly line, we have continued to drive human capital to be more productive and efficient. 

One wonders though if we have reached the pinnacle of human capital productivity improvement. We’ve increasingly seen stories about human capital rebelling against insane productivity targets but the overall concept of “hustle culture”. 

While economists and executives have begun to increasingly worry about the lack of productivity improvement, the individuals who are actually doing the work are increasingly wondering what it is all for. Especially as technology continues to replace human capital.

Indeed, this human capital replacement that the economy is experiencing with technology is subtle but is having wider ramifications as indicated with the “lying flat” and “quiet quitting” trends. In many respects, it is the subconscious realization that at the end of the day, no matter how many hours they put in with an employer, they are not only expendable widgets but widgets who will not be able to compete against their replacements. Those replacements aren’t other humans but technology.

As the economic system continues to drive for more productivity and cost efficiencies, many of the individuals doing the work are starting to realize that it is on their backs. Whether it is through keeping staffing levels at bare minimums with very little room for flexibility to an increasing reliance on “unpaid” work from individuals, those same individuals are starting to realize that they aren’t building a future for themselves but working themselves into the oblivion.

So what does this all mean for the economy and for human capital? It means a lot more instability and, perhaps, a realization that today’s relatively static systems need to be much more dynamic. 

Whether one talks about the “Great Resignation” or “Lying Flat”, they are all symptomatic of something that has been brewing in the economy for decades. Whether one calls them economic rebels or entrepreneurs, the reality is that there have always been individuals who have realized that the economic system is designed not to inherently benefit the individual but the system itself. As such, for individuals to succeed they need to leverage the system to benefit themselves versus the other way around.

These are dynamic times because the same technology that is making people realize that the system is inherently biased towards itself than the individual is also potentially limiting individuals from escaping the inherent downward spiral we find ourselves in as we compete against technology. The same technology that is enabling more individuals to create their own personal brands and empires to escape the corporate system is the same technology that is making it difficult for some to escape. 

Technology is increasingly putting pressure on individuals who are currently most at risk of automation to conform to impossible “automation” standards. One only has to look to highly process-oriented industries to see this trend. Whether it is manufacturing or resource extraction, any industry where individuals still play a critical but declining role in execution are being treated as disposable machines versus human beings. In many respects, it is no wonder that the turnover rates in these industries are at dramatic all time highs.

So what is to be done? For many economists and executives, the belief that a recession will rebalance the scales from the worker to the employer will address the issue, is a fallacy. Yes, it may address the issue short term but long term it does not provide an effective solution. 

The reality is that as more people begin to realize that they need to protect their self interest and as the system continues to provide opportunities for individuals to work for themselves versus someone else, the system needs to adapt. What do we mean by adaptation? Adaptation can take many forms but will include the realization that how businesses and societies are run should be predicated on increasing individual dynamism versus stability.

In the past, individuals could count on the “cradle to grave” system to provide a semblance of stability in their personal and professional lives. Individuals could work for one employer and expect to thrive professionally while dabbling in their personal passions. This “cradle to grave” system was predicated on individuals conforming to a relatively narrow set of choices and for many decades it worked. 

Today, however, the “cradle to grave” system is no more. While it still exists, it is in decline because of the fact that humans are inherently individualistic and dynamic. Individuals are starting to realize that thanks to societal and technological innovation, they no longer have to select a narrow set of choices but make selections that suit their individual preferences and their individual timelines. At least some segment of the population.

The reality of the situation is that while the individualistic utopia previously mentioned is available for some, it is not available for a significant portion of the global population. There are many who continue to be trapped in the declining “cradle to grave” system not due to their own choice but by their own circumstances.

As economic and societal systems continue to change, we need to ensure that every individual has the ability to pursue interesting and worthwhile opportunities. Indeed, we have an opportunity to reshape economic and societal systems to be more “human” without losing productivity and efficiency. If we do not, we risk societal and economic stagnation.

The post Lying Flat & Quiet Quitting: Are They Symptomatic of People Catching On That A Lot of Work Will Disappear Through Automation? appeared first on Global Super Connector.

Now, however, it seems like the disruptor and innovator narrative of Silicon Valley is being passed to the very societal sectors that have been disrupted in the past. Whether Silicon Valley acknowledges or not, political, economic and social actors are pushing back against the disruption and innovation of Silicon Valley. 

How are they pushing back? In many respects, there is no organized narrative related to this pushback. It is broad and it is all encompassing however. 

From the social perspective, we are seeing this in the rising growth of “techlash”. Individuals from all spectrums of society are pushing back not only on the intrusion of technology in their daily lives and the perception that it brings out negative personal behaviors but also of the technology companies that dominate the field today.

From the political perspective, thanks to the rising growth of “techlash”, politicians have started to attempt to reign in Silicon Valley. Whether it is reconsidering Section 230 of the Communications Decency Act that gave rise to social media or imposing new restrictions on the direction and growth of technology in general, politicians are leveraging the bad “Big Tech” narrative for their own political gains.

While the technology industry in general has continued to thrive and grow, its growth has been threatened by a number of factors. These include the growing reach and attention of state regulators and the increasing discontent the general populace has related to the disconnect between where technology futurists want to take us and where most of society wants technology.

Where does this leave the startup ecosystem? At present, in a very precarious state. While the current technology industry is relatively strong thanks to nearly two decades of unprecedented growth and has built a significant warchest, the reality is that the warchest pales in comparison to the array of adversaries the industry has against it.

In many respects, the techlash that the startup ecosystem is facing can be viewed from one of two perspectives. The first perspective is one where the techlash will lead to a modification of the current trajectory of the startup ecosystem as we know it. It is one that keeps the same foundations that we’re used to and pushes them into new technologies. Think blockchain and the metaverse. In other words, more of the same but with restrictions and caveats. 

The other perspective though is a radical overhaul of the startup ecosystem. One that existing players will not recognize. It is a startup ecosystem that on one hand will prioritize large scale developments such as quantum computing and artificial intelligence. These prioritizations though will not be for consumer benefit though but for traditional statecraft. Indeed, consumer wants and needs may be a distant tertiary consideration versus the primary one in this perspective. 

In many respects, the two perspectives outlined above are indicative of a startup ecosystem that doesn’t necessarily benefit the majority of consumers but those of a select few either via political means or via economic means. While there are many in the current startup ecosystem that would state that today’s startups were already benefiting a select few, the new potential startup ecosystem could worsen the situation.

There is no doubt that today’s startup ecosystem is a product of great individual innovators and idealists. From Steve Jobs to Bill Gates, these individuals were willing to challenge industry and technological norms and not only created new industries but new economic and social paths as well. 

As we look towards the future of Silicon Valley and where we build from the shoulders of these great innovators, the question increasingly becomes whether we will “go back to the future” in terms of innovation or pursue a direction that is more decentralized and radically different.

Indeed, whether discussing the two perspectives outlined above or understanding the roots of techlash, what we are seeing is a battle between centralization and decentralization. How the startup ecosystem navigates this will determine its direction over the next decade.

In many respects, the startup ecosystem is responsible for this battle. Thanks to technologies such as the Internet and 5G telecommunications, human civilization has simultaneously been able to come together as one community while pulling apart at the same time. 

We’ve seen these throughout the political, economic and social spectrum across the globe. From the one community perspective, we have seen this with the incredible rise of “Big Tech” firms that have managed to dominate the technology conversation on a global basis. On the opposite end of the spectrum, we’ve seen previously small niche communities such as anime fans turn into global phenomena driving new multi-billion dollar industries.

With society pulling itself in two extreme and polar opposite directions, how do we ensure that the startup ecosystem remains resilient? That is a difficult question and requires peering into a crystal ball that no one has. However, we can define some parameters that will be required to ensure the startup ecosystem remains resilient in the unknown future.

In many respects, it will not be technology that will be at the forefront of startup ecosystem resilience but how we manage the greatest input of all: humans. There is no mistake that technology has freed society to pursue a different form of human management. The issue though is whether we choose to pursue it or not.

The technology and ideas that the startup ecosystem has enabled over its inception is one that has continued to breed individualism and self-reliance even in these dynamic times. The question becomes whether or not we as a society can build or reconstruct the current systems to support individualism and self-reliance or if we will move toward “forced centralization”.

The post We Are Living In An Era of Unprecedented Change. How Do We Build Startup Ecosystem Resiliency? appeared first on Global Super Connector.

As such, when startup founders identify a customer segment that has a willingness to purchase their product or service, they need to capitalize on that product-market fit. Without it, they may not be able to achieve the profitability required.

In many respects, startup founders’ laser-like focus on an identified paying customer segment is one that has been time tested to work. Without a sufficient customer base, a fledgling startup is bound to fail. However, with that laser-like focus, there comes a cost, particularly after a startup has achieved profitability and a sizable customer base.

While many would point out that today’s startups have adopted the “growth at all costs” mindset, that mindset has taken a hit recently thanks to the downturn. Thanks to the changing downward economic conditions, startups are now focusing on traditional financial metrics such as profitability and cost optimization. Critical metrics in these uncertain times.

Many would wonder how a laser-like focus in these uncertain economic times would be detrimental to a growing startup headed towards IPO. The reality is that while a laser-like focus on the core customer base is crucial at the beginning of a startup’s lifecycle, too much of a focus on the core customer base later on during a startup’s lifecycle may be extremely detrimental to their growth and sustainability.

If one looks at the total addressable market (TAM) of a startup, while for many startups it may look like a homogeneous amalgam, the reality is that the homogeneous amalgam is highly fragmented. Indeed, if one truly thinks about the inception of a startup’s total addressable market, the reality is that it is, at best, an estimate versus a concrete truth. As such, startups need to be cognizant that as they determine their true core customer base, it may be made up of many different customer segments?

So what does this have to do with the classic 80/20 rule? Otherwise known as the Pareto principle, it states that 80% of the outputs results from 20% of all inputs for any given event (https://www.investopedia.com/terms/1/80-20-rule.asp). As startup founders must determine how to manage the thousands of decisions that they need to make at the inception, the reality is that as they start seeing success, they sometimes forget about the Pareto principle and how it must be continuously applied and updated.

Why is this a topic of criticality now? While many could state that the growth of startups is being disrupted by the unsettled socio-economic conditions that civilization is encountering at the moment, the reality is that startups are failing to effectively apply the Pareto principle as they attempt to achieve their total addressable market.

The perfect example of this failure is the cryptocurrency industry. While on one hand, the cryptocurrency industry has applied the Pareto principle perfectly, it is facing a reckoning as to whether it wants to further achieve its total addressable market or stay content with its current core customer base.

There is no doubt that the core base of the cryptocurrency industry are in many respects “true believers”. It is from these evangelists that we have unique cryptocurrency terms such as HODL (“Hold On For Dear Life”) that not only signals the fast and loose nature of the cryptocurrency industry but also the exclusive nature of the “club”.

Indeed, if you talk to those in the cryptocurrency industry, it is an industry at a crossroads. That crossroads isn’t only due to more regulatory and government scrutiny but also whether or not it wants to address the needs of the other 80% in its total addressable market.

There is no doubt that since its inception, the cryptocurrency industry has found its core customer base. These individuals wholeheartedly believe in the value proposition surrounding cryptocurrencies even in the face of the massive declines that have occurred. The question now though is whether or not wants or even desires to pursue the other 80% of their total addressable market.

Whether it is a startup or an industry, the desire to pursue the other 80% of a potential total addressable market isn’t as clear cut as it may appear. While investors and advisors may desire the pursuit of the other 80% for purely financial reasons, startup founders and their core customer base may not for a variety of reasons.

Some startups and industries may be able to draw a greater and greater portion of the total addressable market because the other 80% isn’t that different compared to the core 20%. In many respects, this is the most desirable state as it doesn’t require major modifications to either technology or business model to attract the other 80% and it satisfies the value proposition of both the 80% and the 20%. However, the reality is far from this desired state.

Just as the cryptocurrency industry is experiencing, attracting the other 80% may require significant technology and business model modifications. In the case of the cryptocurrency industry, it can range from greater centralization for regulatory and governmental reasons, simplification of technology and a fundamental change in business models. 

There is no right or wrong answer for the cryptocurrency industry just as there is no right or wrong answer for startups as they consider pursuing the other 80%. The reality is that it is a difficult choice for a startup or an industry to make. Focusing on the core 20% may or may not allow a startup or an industry to thrive. Indeed, the other 80% may join the core 20% thanks to a relatively good value proposition fit. Or it may not.

The post Most Businesses Focus On The 20%. As Businesses Grow, However, It Is The 80% That They Need To Consider appeared first on Global Super Connector.

Another week, another salvo in the future of work wars. This time it seems to be in favor of work traditionalists. 

With the hiring slowdown that has hit the tech sector combined with the increasing number of layoffs that are hitting startups of all shapes and sizes (i.e. Netflix, Gemini, Skillz, etc.), there are a number of commentators stating that the pendulum has swung back in favor of employers. The loudest and latest voice is billionaire Elon Musk who has tweeted that all salaried employees should return to the office 40 hours a week or quit. 

Whether one agrees with Elon Musk or not, the economic downturn has emboldened work traditionalists to state that the reckoning has been a long time coming. No longer will employees “in the driver’s seat” but there will be a return to the natural order of things where employers are primary. Or will it?

Just as with any long war, they are not won or lost in one or two battles. It will be a series of battles that will determine the outcome. Indeed, this is the case with the future of work.

The reality is that the future of work is definitely changing. What the final outcome will be remains to be seen. All that we are seeing right now are opening salvos between the two factions with the outcome still in question.

In many respects, the future of work may be more determined on an individual employee and employer level than by uniform blanket statements or tropes. At the end of the day, individual employees and employers, if given the opportunity, will find the optimal work culture and environment that they will thrive in.

Indeed, the issue at hand is much more than whether or not individual employees should be “returning to the office” but how individual employees are valued by employers. It is a battle of beliefs concerning whether an individual employee is merely a “widget” or is an integral part to the growth and development of the organization. Elon Musk and work traditionalists have made their stance clear.

The office environment is one that for Elon Musk and work traditionalists is an environment where strong work culture, work ethic and innovation are born. Indeed, Musk has stated that with regards to Tesla where an in-person work environment is needed to be innovative and it can’t occur “by phoning it in.” While this may be true of Tesla it is not the case with every organization.

While there is no doubt that in-person collaboration is still optimal at this point in business history, the reality of the situation is that the pandemic and Silicon Valley itself has proven that it is not the only way to innovate. There is no doubt there is some loss of serendipity and randomness due to the lack of an office environment but that loss increasingly seems overrated.

Ultimately, we need to recognize that the majority of work is to execute on organizational vision and strategy. That is the reason that in Silicon Valley we state that “ideas are a dime a dozen”. Ultimately, what matters more than an organization’s vision and strategy is its ability to execute.

So what does this mean for the future of work? At the end of the day, the need for execution neither proves benefits or detracts from the argument. It is ultimately the purpose of work. 

For all the talk concerning the need for in-person serendipity and innovation, those talking points are distractions from the majority of an individual’s work which is to execute. Yes, there is no doubt that innovation can drive work to be completed more efficiently and effectively but at the end of the day it is a small part of someone’s work product. 

Ultimately, the requirement for in-person work is less about innovation and more about control and the supposed benefits of having a “focused work environment”. There is no doubt that the previous model of work has powered human civilization to its current level. However, we may be reaching the limits of its usefulness, particularly as we consider the next phase of socio-economic technological evolution.

Indeed, the purpose of humans at work is slowly less about tactical execution and increasingly about creating new ideas to be executed on. There is no doubt that we are still in a transition phase when it comes to tactical execution but automation, artificial intelligence and new forms of fabrication such as 3D printing are challenging existing norms. 

As the need for creative thinking increases at organizations, there requires a different approach and mindset when it comes to management and culture. It is less about “command and control” and more about “collaboration and execution”.

How does this influence the war for the future of work? In many respects, it influences the side of the divide that one stands on concerning the future of work. The work traditionalists believe in the power of conformity is required to drive progress whereas future of work adherents believe that collaboration will win the day. At the end of the day, both sides are right and what we need is an acknowledgement that depending on an individual’s and an organization’s circumstances will determine the optimal outcome.

In some respects, the war for the future of work seems to have been caught up in the general culture wars that dominate human society today. The pervasive need to be “right” in order to feel a semblance of normalcy in these dynamic times. This need to be “right” though neither represents what we are as a society today nor what society was in the past. 

Everyone views society through “rose colored glasses” and today’s culture wars are no different. While it is nice to believe that society was uniform and orderly in the past with only one viewpoint, the reality is far different. 

If one takes the energy and effort to truly understand history, while there may be one dominant narrative that is espoused, there are always different perspectives and viewpoints of history. This is no different now than it was in the past. 

How does this apply to the future of work? If one ignores the prognostications and overhyped tweets, the reality is that the future of work already existed in the past. If one looks throughout history, one can always find examples of “remote work” or “hybrid work” but they were more one-offs versus the norm. The only difference between the past and the present is that we are living in an age where more individual employees can make such requests thanks to technology.

At the end of the day, the “Great Reshuffling” isn’t only about employees increasing their salaries and opportunities but it is realizing what they truly value from a work experience and whether the organization they work for values them as more than a widget. There is no doubt that for some, particularly white collar workers, they have more flexibility to change and find a work environment that appeals to them but that increasingly is the desire of every employee. As such, employers will have to decide where they land on the future of work debates and live with the consequences of said decisions.

The post In The Future of Work War Are We Moving “Back to the Future” or Another Battle As Part of A Long War? appeared first on Global Super Connector.

We are still in the early stages of an economic retrenchment. How severe and how long it will last remains to be seen. What can be stated is that there are an innumerable number of factors colliding to cause this economic downturn. So many in fact that it is unprecedented. 

There are the ongoing COVID effects whether it is inflationary pressures due to processes unable to keep up with demand from countries opening up or supply chain constraints due to countries remaining locked down. The conflict in Ukraine that is roiling the geopolitical landscape is also contributing to economic instability. These factors combined with the continuing dynamism in the overall processes and system that make up economic, political and social norms, it is quite apparent that the world we know is potentially on the cusp of permanent and dramatic change.

What does this mean for the startup ecosystem? No one truly knows for sure but there are some guesses that can be made based on the current economic conditions that the startup ecosystem is facing. One is that the mix of startups will more than likely change in the near future from consumer-oriented to enterprise-oriented.

There are a number of factors that drive this transition and many are tied directly to the social, political and economic changes outlined above. It is increasingly apparent that these factors will more than likely negatively impact the receptive consumer attitudes that a number of emerging startups rely on for growth. 

The most obvious negative impact on consumers lately are the economic ones. While the current focus are the supply chain constraints and the inflationary pressures that have lead to rising prices, there are longer term economic ramifications that are impacting the ability of consumers to hold up the economy. The hollowing out of the middle class as well as increasing automation has reduced the number of stable well paying jobs available to the global economy. As such, it is not only the overall current and future size of the economy at stake but the willingness of individual consumers to try new and innovative products, services and even business models.

With the latest economic downturn as well the geopolitical situation around the globe, this is clearly becoming a trend. Whether one is talking about crypto or the metaverse, there is general skepticism amongst the general public as to the value and the benefit of these new technologies and their associated business models. 

While there are a number who would argue that it boils down to poor public relations on the part of crypto enthusiasts and negative media perception, there seems to be something more that is occurring. Whether one attributes it to the growing “techlash” that is occurring or an overall malaise concerning the fundamental and, at times, cataclysmic change that is occurring, the reality is that startups may have a harder time convincing individual consumers to try new concepts in the future.

If this is the case, what does this mean for startups? For consumer oriented startups, it may mean that they need to not only adjust their growth expectations but also their business models as well. The size and speed at which consumer oriented startups may be able to capture their total addressable market (TAM) may be significantly smaller and slower than what was expected in the golden age of startups just a few months ago. Both founders and investors may need to adjust to having to take a more “workman-like” approach to growing their startups and dramatically scale back their expectations for “unicorn” valuation status.

With consumer oriented startups having to adjust their expectations, what does this mean for enterprise startups? In many respects, enterprise startups are well positioned to take advantage of this transition in the startup ecosystem. 

Enterprise startups are used to long and laborious development and sales cycles thanks to the rigorous vetting and validation processes most corporate clients require of their vendors and partners. These sales cycles which can take between 12 to 18 months are on top of the high level of development standards that enterprise startups have to meet on behalf of their clients. Whether it is achieving international security standards for their applications or being able to manage the various data privacy regulations demanded by different jurisdictions, enterprise startup development isn’t an easy task.

With the level of rigor and thoroughness expected by the customers of enterprise startups, there is an opportunity for enterprise startups to attract more talent as individuals look to acquire new skills in a startup ecosystem that is in the midst of dramatic upheaval. It is not only from a resourcing perspective, both financial and non-financial, that enterprise startups may benefit but from an overall growth perspective as well.

With a global economy potentially entering an economic downturn, individuals, corporations and governments are moving towards more “traditional” forms of economic management and growth. What that means is more emphasis on cost optimization and containment as well as improving overall efficiencies and time to market. As such, enterprise startups that focus on “traditional” forms of economic management and growth will have not only increased customer interest but investor interest as well.

At the end of the day, the startup ecosystem is entering a period of dynamic flux that may be beneficial for enterprise startups. It is an environment where slower innovation and adoption may be the future for the entire startup ecosystem, one that enterprise startups may be primed to exploit.

The post Are We Entering An Era of Enterprise Startup Growth? appeared first on Global Super Connector.

The geo-political trends that we now see are pushing society in the next decade towards a path of de-globalization. One can see that the trend has been occurring for quite some time. Whether one points to the Brexit referendum of 2016 or the rise of nationalist politicians around the globe, there is no denying the de-globalization trend that has been steadily rising. 

While the causes will continue to be debated at present and well into the future, there is no doubt that they will have both short and long term impacts on the startup ecosystem. The reality for startups in the here and now is how do they thrive and survive in these dynamic times?

There are no clear cut answers as the trends are relatively recent from a geo-political perspective but there are definite signs as to what startups will have to pay attention to in order to thrive and survive. These factors that startups will have to pay attention to in our increasingly de-globalized environment include:

1. Rapid Changes In Market Availability: It is increasingly apparent that a new reality is the rise of either full or partial trade wars will be a part and parcel of the increasingly de-globalized economy. As such, the availability of markets will wildly fluctuate impacting the ability of startups to achieve their growth projections and targets. While such changes in market availability have been a risk, such risks have increased and will continue to increase in the minds of startup founders.  
2. Rapid Political and Regulatory Changes: Coupled with the changes in market availability are the primary drivers which are rapid political and regulatory changes that are increasingly driving the next decade. The rapid rise of populism driven by a disoriented and increasingly fearful populace will lead to rapidly fluctuating political and regulatory regimes that startups will have to adapt to. Whether it is outright bans (i.e. crypto mining) or revolutionary realignments (i.e. El Salvador and its national acceptance of crypto as a form of payment), politicians and their associated regulatory regimes are starting to catch up to startups in terms of speed of execution. As such, startups will have to manage rapid political and regulatory climate changes with greater dexterity than before.
3. Increased Input Costs: Market availability and rapid political and regulatory changes are not only impacting startup growth prospects but their input costs as well. From hardware components to software packages to software developers, startups are facing increased costs across the board that will not abate any time soon.
4. Localization First, Globalization Second: While globalization has been beneficial overall, for many however, there is a widespread belief that the benefits of globalization have been very unbalanced and has led to massive inequality. For startups, this means that their potential market segments will increasingly demand that they “localize” their content beyond what is currently being offered. It will not only mean offering native languages but it may also mean the localization of employees, data and infrastructure that addresses the concerns of not only market segments but governments as well.

With all these challenges on tap for startups related to the de-globalization era, what does it mean for the overall startup ecosystem? Fundamentally, it means a new era has dawned for startups and the associated ecosystem. It is an era where growth is not only slower but more volatile as well. 

Instead of driving their own destinies, startups may find that they need to react to externalities such as dynamic market conditions and government policies. This greater attention to externalities will lead to a new way of managing startups that will further disrupt what is known in the startup ecosystem

The post In An Era of De-Globalization, What Are Startups Supposed To Do To Thrive & Survive? appeared first on Global Super Connector.

While we have seen a number of startups that have revolutionized customer user experience around the world from neobanks in the financial services sector to Amazon and its significant impact on the retail sector, there is no doubt that society has achieved a great number of innovations over the past half century. One has to ask, however, what leads to this growth in innovation and whether we are making the same investments now to generate the next phase of innovation.

One could argue that the advancements that society has seen over the past half century has been due to the investments, both public and private, that we made not for  short-term purposes but for long-term and non-commercial purposes. From the investments by DARPA that ultimately led to the Internet to the technological and scientific advancements that came from the Space Race, a plethora of multi-billion dollar technology companies owe their very existence to these investments.

While we know where our technological advancements are coming from in the past and present, the future is more muddled. No one can predict either how long it will take to discover the next lynchpin technological innovation or what that lynchpin technological innovation is. In many respects, for all the advancements in human society over the millennia, humanity is still at the whim of chance. The grand debate that society is currently having is how do we minimize chance and encourage faster and more deliberate innovation.

In the past, we have relied on a significant amount of government funding to drive technological innovation and advancement. Society saw this with the DARPA investments that created the Internet and the plethora of scientific advancements that were derived from the Space Race. While proponents of government scientific research and funding can point to these successes, numerous critics can point to dramatic failures as well.

As such, governments around the world are searching for an alternate means to fund scientific research and innovation. Driven not only fiscal realities but a desire to find a faster and more deliberate pace of innovation, governments are turning to the private sector for advice and new business models. The public private models that have been experimented with in the 21st century are a result of this pairing.

While there are a number of different public private models in existence, there are a number of well known examples to point to. The one that is most relevant to the theme being explored is the NASA driven competition for the next American Space Shuttle.

With the retirement of the old Space Shuttle, NASA has been relying on Russian Soyuz capsules to reach the International Space Station. Considering that NASA now is focused on longer range exploration of the Solar System (i.e. Mars), NASA has decided to develop the next American Space Shuttle via a private sector competition between Boeing and SpaceX.

Proponents of this new public private model state that it has lead to faster innovation as private companies not only have to win but to deliver their win in the most efficient and economical means possible. Indeed, SpaceX decided to develop reusable booster rockets to reduce costs and launch turnaround times, an approach that may not necessarily have been considered with a 100% government funded approach.

While there is no doubt that there has been incremental innovations and processes brought about with the introduction of the private sector, can it be considered true scientific achievement and advancement? Indeed, the question becomes whether it will be sufficient to drive the next wave of undiscovered innovation and technological advancement. 

The public private model and its commercialization approach relies on pursuing a very structured approach to innovation and advancement. The model is focused on achieving a very specific set of objectives in the most efficient and quickest manner possible. An excellent model if one is relatively confident in the existing technology available but what if one is not?

In many respects, we are starting to reach the limits of current technology. Moore’s Law which estimated the doubling of processor power every two years is finally hitting a wall with existing technology. If we are are starting to hit the wall with current technology, there are two fundamental questions that need to be asked:What is the best approach to fund basic research to achieve the next level of innovation and growth?Who is responsible for the funding and ultimately the objectives?
Indeed, what is more critical than ever is the address the conundrum that is basic research. While there still needs to be work done on the commercialization angle of scientific research and innovation, the reality is that the biggest reward will be solving how to fund and proceed with basic research.

Fundamentally, basic research and human individuals are the same due to the fact that they are unpredictable and cannot be refashioned into a linear process. While humanity would like to think that it is omniscient, the reality is that we are far from it. Indeed, the number of times that scientists and researchers are shocked by the results they obtain after following the scientific method are too countless to mention.

The unfortunate problem is that in our request for cost savings and efficiency, it is increasingly apparent that we are eliminating our ability to explore the unknown with basic research. There is no doubt that commercializing scientific research is a critical component to the overall research and development lifecycle but overemphasis on it is extremely dangerous. 

Basic research and the ability to explore questions that have no commercial value as well as potentially contradicting established orthodoxy is critical to advancing not only scientific knowledge and innovation but overall human evolution as well. Indeed, we have seen time and again throughout human history, how our society and our knowledge is advanced by those who challenge established orthodox. Galileo is a prime example.

If we as a society are not willing to fund basic research in the long term, particularly basic research that may upend conventional thought, we are condemning society is a dramatically slower pace of innovation when it is most needed. With climate change starting to have a more pronounced impact on human civilization and the countless other societal issues that need to be addressed, we need more investment in basic research than ever before.

The post Basic Research: A Critical Lynchpin To The Startup Ecosystem appeared first on Global Super Connector.

What is the financialization of the economy? It is the increasing influence and importance of financial markets and financial institutions on the health of a country’s overall economy (“Financialization”. Investopedia. https://www.investopedia.com/terms/f/financialization.asp. Accessed: March 21, 2022.). 

Why has the financialization of the economy become a major topic of discussion? There are an increasing number of individuals that view the financialization of the economy as the crux of the issues that society faces today. 

Thanks to technology, a wide variety of industries have been further “financialized”. From critical commodities such as oil and gas to human capital talent, the further financialization of the economy has been increasing. Many would ask, what do we mean by further financialization?

While critical commodities such as oil and gas have always been at the whim of the markets, particularly when it comes to pricing, the reality is that technology and changing business models have accelerated the pace and reach at which the markets operate. It is the pace and reach which is of increasing concern to many individuals and organizations.

There is no doubt that the financial markets have moved quickly. Since their inception, financial markets have always pushed societal and individual limits. Whether it is creating new financial products that push regulatory boundaries or leveraging technology to transact faster, financial markets have always been innovative. Sometimes faster than society can handle.

Perhaps society is entering another era where the combination of technology and new business models within financial markets is causing too much change too fast for an even broader swath of society. What do we mean by moving too quickly for society to cope, not to mention a broader swath of society?

One only has to look at the ramifications that we are currently seeing with commodity prices versus the ability of organizations and individuals to adapt to changes. As commodity prices continue to rise at an unrelenting pace, organizations and individuals are leveraging existing tools to cope. These tools include reducing purchases of expensive commodities and finding substitutes. Can these methods continue to work in these financialized times?

The answer is a strong maybe. While these methods may have worked in the past, they only provide short-term relief and aren’t necessarily effective over the medium-term to long-term. Indeed, while there will be a small number of individuals and organizations that will profit from such short-term volatility, there will be many others that will be harmed by it, particularly startups.

Startups, in many respects, have always been at the whim of timing and market circumstance. If a startup goes to market too early then they may find themselves without revenue and be forced to liquidate. A startup that goes to market too late may find themselves outclassed by larger existing competitors. However, if a startup can read the market trends correctly and manage to get their product out when demand and interest are at their peak, they have the opportunity to become a unicorn.

How does the financialization of the economy impact the sustainability and the growth potential of startups? While there are some that would argue that startups are able to capitalize on these rapid market changes whether through their nimbleness or their direct role in driving the financialization of industries, there are others that question whether that will be the case over the long term.

Startups, whether they realize it or not, need some semblance of stability and order to perfect their business model and product. Everyone forgets that today’s big name technology companies such as Google and Meta took many years of research and development as well as experimentation to reach the heights they have now achieved and will continue to achieve in the future. These big name technology companies will definitely be able to weather if not capitalize on the financialization of the markets. It is the smaller startups that will have a harder time.

Without the financial cushion of larger technology companies, smaller startups will find their ability to build new products and services impeded thanks to unpredictable input costs. It is not only high input costs that could be impacted but also overall operations as well. 

Startups with significant burn rates and minimal revenue may find themselves having to dedicate resources to monitoring costs and supply chains versus making product improvements. A scenario that leaves society poorer due to reduced product improvements and slower growth.

Another consideration is that the type of startups society would see would dramatically differ. Instead of truly innovative startups pushing the boundaries of science and technology, society may be left with startups that merely repackage existing technologies into slightly different business models. Great for short-term profitability but lousy for long-term sustainable growth and innovation.

There is no doubt that some startups will thrive in the continued financialization of the economy. The question becomes whether or not those that thrive are the startups we need to succeed for long-term sustainable growth and innovation. 

There are some that would argue that regardless of the economic conditions, successful startups will find a way to survive and thrive. There are others though that would argue that society might be taking a detour towards a dead end when it comes to true scientific breakthrough and innovation. Only time will tell which side of the argument will win.

The post Will The Financialization Of The Economy Help Startups Or Hinder Them? appeared first on Global Super Connector.

Many would argue that the success of Silicon Valley is due not only to the availability of high quality education but the geographic proximity of high quality personnel as well. While one can view geographic proximity in a very limited scope, its definition needs to be both expanded and narrowed when discussing innovation.

Looking at the narrow definition of geographic proximity, Silicon Valley is in a prime position for innovation. Not only does it have several top tier post-secondary institutions such as UC Berkeley and Stanford University but it has been at the epicenter of government innovation with laboratories such as Lawrence Berkeley and Sandia. While some may not believe these are critical components, they are the foundational elements required for innovation and growth.

Top tier post-secondary institutions are definitely needed to build a strong foundational populace. Having the ability to train a high number of individuals to think differently as well as to associate with others who have diverse perspectives is critical to innovation success. Not only do post-secondary institutions and their diverse populations act as a crucible for testing ideas in a safe environment but it saves investors over the medium-term by having to spend less time and resources on “not ready for prime time” ideas.

Multinationals and startups not only rely on post-secondary institutions to provide new scientific breakthroughs and new business models but thought processing power (i.e. graduates) as well. It is not a unidirectional flow, however, and some post-secondary institutions have managed to effectively create a highly advantageous bi-directional flow. 

The most innovative and financially successful post-secondary institutions have managed to create a 360 degree cycle that is mutually beneficial to all participants. Former graduates and current executives have the ability to not only attract new talent and find new innovations to continually power their organization’s growth but they have the individual opportunity to benefit by joining as faculty or guest lecturer to relay their experiences to the next generation. Faculty and students benefit by establishing their networks that will be critical in developing their startup ideas as well as accelerate commercialization efforts related to their scientific breakthroughs.

While geographic proximity has proven itself in the past and in today’s current state, is it something that will be a critical deciding factor for innovation in the near future? A number of factors besides the concerns over the coronavirus and the rising constraints over immigration are potentially reducing the necessity of geographic proximity. 

One of the biggest factors that is reducing the importance of geographic proximity is the rise of cheap and effective communications technology. From email to video conferencing, technology is becoming ubiquitous around the globe. Whether someone is in a rural area or a cosmopolitan urban center, everyone has access to some form of communications technology to enable them to access the globe in the comfort of their own locale.

There are many who would state that the need for face-to-face communications will always be critical to building trust and smoothing communications across cultural divides. While there is no doubt that there is a need for face-to-face, particularly from a sociological and psychological perspective, the reality is that those norms are slowly changing and potentially accelerating in light of recent events.

While the coronavirus and latest immigration restrictions are new accelerators, there has been a shift in social norms over the past decade as technology becomes an integral part of our daily lives. Just like the phenomenon of children returning to an empty house due to both parents working led to the development of the term “latchkey kid”, the growing importance of technology in the daily lives of young children has led to the term “digital native”. 

As “digital natives” begin to enter the work force, they will not only start influencing why we work but how we work as well. While video conferencing and email were put in place as productivity measures versus wholesale attempts at changing corporate culture with “digital natives” there is an increasing expectation that “digital first” will be the norm leading to a dramatic disruption of corporate culture. Indeed, particularly in technology based organization, we are seeing the rise of distributed teams regardless of organization size.

Driven thanks to the rise of multinational corporations and globalization of back office processes, a number of organizations are moving towards distributed teams. No longer is it necessary to centralize front office and back office operations in one location. Increasingly, corporate executives and startup founders are finding it extremely advantageous to be close to their major investors, usually in high cost of living areas, while at the same time locating their back office teams in lower cost of living areas. 

Economics and technology are not the only things driving this movement towards distributed teams. Whether you call it work life balance or a realization that the best work done by individuals is done in environments they are comfortable with, individuals are demanding the ability live and work in locales that fit their individual needs and personalities. Organizations with an increasing need for smart and adaptive talent are willing to accommodate these individuals to ensure they remain competitive.

What does this mean then for geographies that have benefited for the need for geographic proximity? While they will remain supreme over the long term, they will increasingly be under pressure from other geographic regions that weren’t thought of as potential innovation centers thanks to technology and changing societal norms. Such a trend may not be a bad thing over the long-term.

Not only could it potentially alleviate some of the issues plaguing today’s large urban centers but it could allow for a greater and more even distribution of benefits across geographies. It may also force greater action by governments to address long standing issues to accommodate these changing social norms. Large urban centers will have to address issues such as homelessness and other quality of life issues to remain competitive while state and national governments will have to determine how to address the infrastructure gap between urban and rural. 

In the end, geographic proximity will continue to be a powerful force in business. The fundamental reason for that is due to the fact that any organization, whether multinational corporation or startup, is run by human beings. Human beings as such require face-to-face communication and while communications technology will help to supplement, it will not replace the need.

The post Does Geographic Proximity Matter Anymore? appeared first on Global Super Connector.