What's the future of big business? Better yet, what is a column dedicated to venture capital and entrepreneurship doing writing about big business? Well:
• More than 90% of positive exits in Canada (an "exit"is VC speak for selling off an investor's position in a company or exiting the investment) come from an M&A with a large corporation. This trend has been globalized as of late, as the likes of Microsoft, Google, Amazon, ebay and Yahoo vie to facilitate their own growth through acquisition of interesting ventures, products, and services (e.g. YouTube, MySpace, Flickr, WebEX).
• Venture Capital in Canada has, for the most part, been focused on investing in B2B companies (i.e. business to business revenue models, a/k/a those companies that sell the majority of their products primarily to big businesses).
So, it seems to me, that if one is either a founder or a funder looking to back founders, one should ask not where the enterprise is today, but where it will be tomorrow. The "Great One", Wayne Gretzky, said it best. When asked his secret for hockey success, he often replies: "I skate to where the puck is going, not to where it's been."
In order to determine where the puck is going in the hockey game of big business, I turned to a man who has been writing about the future of business for over 30 years, Mr. Don Tapscott. Tapscott, who has penned 11 books to date, currently resides on both the Globe and Mail and New York Times' Bestseller's lists with his current tome, Wikinomics: How Mass Collaboration Changes Everything. Wikinomics, in turn, was inspired by $9 million of research into how the new web changes business models, competitiveness, and the strategy of enterprises. I spoke with Don from his cottage on the Lake of Bays near Dorset, Ontario, to get his views on the future of the Enterprise.
SW: Before we get started Don, let's set the tone. What we are discussing today, the future of big business, isn't just based on your own views -- it is the result of statistical and observational data you've recently gathered.
DT: Correct, I've been studying IT and business since I worked at Bell Northern Research in the 1970s. Over the last 5 years, my company, New Paradigm, completed several large research projects funded by major corporations. One looked at web 2.0, another was on the topic of transparency as a new force in the economy. We even did one on the role of the new web in competitive advantage. Our work continues and we're also doing a large program about the Net Generation — young people aged 13-29 who are growing up digital. We studied a couple of hundred companies, published over 70 reports, and are currently interviewing about 9,000 people in countries throughout the world.
SW: So, now that the initial research is in the bag, what were your findings?
DT: We concluded simply that the corporation is going through the biggest change in many decades — maybe the biggest change ever.
SW: But change is the only constant, so what makes this a revolution and not just evolution? Why will Enterprise 2.0 be so different?
DT: This is an unusual time in business history when four new developments are combining to create a perfect storm for change:
• web 2.0;
• the rise of the net generation;
• a social revolution; and finally, the big one;
• an economic revolution where the ways that firms orchestrate capability is changing.
SW: Let's take these one at a time, starting with web 2.0. The term "web 2.0" was coined by Tim O'Reilly to represent the second wave of internet companies, services, and technologies created after the dot.com bust in 2000. You've stated publicly that, "this ain't your daddy's internet", but what's so special about the tech today?
DT: The old web was: low speed, accessible through a PC only, text and graphics-oriented, and based on HTML — a standard for the presentation of information. The new web is: broadband, accessible through billions of objects in the world from Blackberries and Treos to Refrigerators, embraces true multi-media and is geospatial — meaning that you can browse the physical world with Gypsy Tour for example, a product that tells you what's happening near you — wherever you are. Most importantly, the new web is based on XML, which is a standard - not for presentation but for computation. That means the web is becoming a giant global computer that everyone programs. So, each time you put a photo onto Flickr, enter something in a blog, or create or do something on [the virtual world] Second Life, you are, in a sense, programming a global computer.
