Friday, December 03, 2010

Functionally Inspired Blog; Entrepreneurial Revolution Will Reshape Business

Functionally Inspired Blog; Entrepreneurial Revolution Will Reshape Business
Entrepreneurial Revolution Will Reshape Business
By Josh Levine -- December 1, 2010
Anyone who thinks the best times for entrepreneurs and startups are behind us should read this: When It's Darkest Men See the Stars. The message is we're at the beginning of an entrepreneurial revolution that will permanently reshape business.

Steve Blank, who well understands the history and evolution of Silicon Valley, believes that all previous barriers for startups and innovation are being removed right now – swiftly and across the entire economy.

Ever since the Cold war, each wave of innovation in Silicon Valley was thought to have run out of steam. Yet whenever that happened a big shift would occur triggered by radical change, and a new wave of technology emerged.

The tandem of the great recession and the financial crisis destroyed a ton of wealth. But one of the things it gave birth to was more startups. And today's startups are blessed with very favorable risk-to-reward ratios, having a lot less to lose and a lot more to gain.

The current transformation – referred to by Blank as the "democratization of entrepreneurship" – is being propelled by these developments:

•Short time to first product
•Low cost to first product
•Global innovation, far beyond the U.S.
•Lower startup failure rate
•Fast customer adoption rate
•Large pool of risk capital

The playing field for startups has been leveled to such a degree that it's enabling innovative firms to move with speed and efficiency unimaginable a decade earlier. The Internet is at the center of these trends, but its impact goes far beyond e-commerce.

According to Blank, "While innovation is moving at Internet speed, this won't be limited to just internet commerce startups. It will spread to the enterprise and ultimately every other business segment."

What's the consequence of this new revolution? "The second decade of the 21st century may turn out to be the West's and in particular the United States' finest hour," he says.

This extreme optimism may seem totally off-the-wall in an environment where investors are still reeling from the events of the past decade going back to the bursting of the tech bubble. Yet that's when revolutions take root and the greatest change occurs. And investors focused on small, innovative companies who best understand the transformations now happening throughout the U.S. and global economies will make tremendous profits in the years ahead.

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