As you contemplate the significance of The Transformation, you will undoubtedly realize that there is enormous opportunity
for many new careers and enterprises. As shown on the graph, these opportunities will place a layer of more entrepreneurial activities on top of the sharply declining supply of traditional jobs caused by the approaching wave of profound technological unemployment.The news media will undoubtedly focus on the depressing and inexorable loss of traditional jobs, while more sophisticated media will emphasize the more moderate loss of participants in the economy. If, however, one makes the shift to the entrepreneurial mindset the outlook is rosy to the point of exciting.
As GDP per capita explodes, people in traditional jobs will find their compensation determined by supply and demand. Because of advancements in robotics and A.I., for decades it will be a hirer's market and employees will find that their compensation, in real terms, will remain flat and even decrease, in many cases dramatically. Entrepreneurs' income, on the other hand, will explode right along with GDP per capita.
This very high characteristic income for Information Age careers is an important source of the increasing income and wealth disparities that are developing, especially in the U.S. where the Transformation is most advanced.
There is one serious problem, however. The Industrial Age image of an entrepreneur is that of a monomanic, visionary, highly self-promotional and intensely goal oriented person. The Industrial Age entrepreneur was confronted with a series of obstacles to be overcome with high income coming with success, but also bankruptcy the result of failure. Consequently, the rules of the entrepreneurial game have been constructed so that success does, indeed, require this personality type.
However, most people don't fit the entrepreneurial personality type. We see that, unavoidably, if the employer-employee relationship will comprise a relatively small minority of the workforce in the Information Age, a new, more encompassing, paradigm for the entrepreneur needs to be developed. That new paradigm is expressed within an Enterprise Network which, rather than presenting obstacles, is a success prone environment.
The light blue are corporate overhead service providers, which may include accounting, human resource, IT, legal services, etc. on a consultative basis. In the Industrial Age corporation, corporate departments tell the operating units what to do. In Enterprise Networks operating units procure counsel as needed, but are free to proceed as they choose.
The green circles are the individual, independently owned and operated, enterprises. The enterprises will tend to be much smaller than Industrial Age enterprises. First, consistent with The Age of Boutique Everything and The Cultures of Affluence, they will be providing niche products and services. Second, consistent with The Income Explosion and Technological Unemployment, they will have highly automated operations. Each enterprise may also have contractual or equity relationships with other enterprises within the network that may be the result of a vendor or customer relationship, or a strategic partnerships.
A few of these enterprises will provide the essential access to markets often on a cash flow positive, percent of sales basis. What that means is that the enterprise will have the option to pay for access as a percent of their revenue and from the proceeds of sales. In Internet marketing this is referred to as affiliate sales. Historically, retail malls have done something similar with a base rent and then a percent of sales after the fact.
This is a significant part of what makes the Enterprise Network a success prone productive environment. It substantially lowers start up equity requirements, allows for higher internally funded growth rates and greatly simplifies and accelerates profitability.
Team Formation
While there are certainly examples of the lone entrepreneur, most successful Information Age enterprises are the result of a fortuitous coming together of complementary personalities. Apple was started by Jobs and Wozniak, Microsoft was founded by Gates and Allen, Google was founded by Brin and Page, Facebook was founded by Zuckerberg, Moskovitz, Saverin, et alia. In many, perhaps most, cases, without these collaborations, the enterprises would not have been successful.
There is great value-added in the creation of these collaborative teams, as is demonstrated by the fees charged by Executive Search firms, which routinely exceed 50,000USD. While some Executive Search firms will undertake the project of assembling a startup team, most successful startups are the result of a serendipitous meeting.
The Enterprise Network provides a structure for the creation of startup teams. A visionary will open up a group and describe his idea. Other network members will look through these groups and, if interested, join them. This will give the founding entrepreneur an opportunity to interact with several potential partners sufficiently to 'get to know them.' There will like form one or more services who will do background checks on potential partners.
Crowdfunding
Equity crowdfunding, recently enabled in the U.S., is spreading to most advanced nations, beginning in Western Europe. It is a complete game changer for startups in the <1,000,000USD range. Because of the 'Age of Boutique Everything' that will be an increasing percentage of startups.
Some types of startups, especially technology and mass market Internet ones, can often attract large angel investors and venture capitalist. At present, however, they are not interested in the small startups with unseasoned teams. This is peculiar since this does describe many of the most successful startups, including Apple, Microsoft, Google and Facebook.
The equity crowdfundng option allows many small investors to take small risks with the potential for huge captial appreciation. Information Age startups often experience a thousand fold increase in value in less than ten years. From the information provided by the David Choe story, we can infer that Facebook returned 3,000X capital appreciation to its early investors.
Crowdfunding still provides a serious obstacle to most, usually young, inexperienced startup teams. As a rule the crowdfunding offer must contact between one and two potential investors for every USD raised. The startup team intending to raise 500,000USD has no practical way of reaching 250,000 to 500,000 potential investors.
By joining an Enterprise Network, the startup team immediately plugs into an existing crowdfunding community which, assuming the startup team chose the network it joined carefully, are predisposed to investing. Most networks will have a crowdfunding publication which will make presentation to the investment community fast and cost effective.
Marketing
The more a startup intends to capitalize upon a niche market the more difficult and more important is cost effective access to the market. McDonalds can advertise almost anywhere because almost everyone eats at McDonalds. Providers of high ticket, corporate purchases have somewhat more difficulty since the vast majority of people are not corporate decision makers. They do not want to pay for advertising where only a tiny percent of readers, viewers, etc. are potential customers. Fortunately, there are many magazines and some television that have a very high percent of corporate decision makers in their advertising reach.
This is why Enterprise Networks will form primarily around a shared customer base. As the economy becomes more nichified, both because of the more bespoke preferences of high income consumers and the cultural fragmentation of the Cultures of Affluence, cost effective access to markets will become one of the most important success criteria for startups.
Scope of Opportunity
While there are certainly examples of the lone entrepreneur, most successful Information Age enterprises are the result of a fortuitous coming together of complementary personalities. Apple was started by Jobs and Wozniak, Microsoft was founded by Gates and Allen, Google was founded by Brin and Page, Facebook was founded by Zuckerberg, Moskovitz, Saverin, et alia. In many, perhaps most, cases, without these collaborations, the enterprises would not have been successful.
There is great value-added in the creation of these collaborative teams, as is demonstrated by the fees charged by Executive Search firms, which routinely exceed 50,000USD. While some Executive Search firms will undertake the project of assembling a startup team, most successful startups are the result of a serendipitous meeting.
The Enterprise Network provides a structure for the creation of startup teams. A visionary will open up a group and describe his idea. Other network members will look through these groups and, if interested, join them. This will give the founding entrepreneur an opportunity to interact with several potential partners sufficiently to 'get to know them.' There will like form one or more services who will do background checks on potential partners.
Crowdfunding
Equity crowdfunding, recently enabled in the U.S., is spreading to most advanced nations, beginning in Western Europe. It is a complete game changer for startups in the <1,000,000USD range. Because of the 'Age of Boutique Everything' that will be an increasing percentage of startups.
Some types of startups, especially technology and mass market Internet ones, can often attract large angel investors and venture capitalist. At present, however, they are not interested in the small startups with unseasoned teams. This is peculiar since this does describe many of the most successful startups, including Apple, Microsoft, Google and Facebook.
The equity crowdfundng option allows many small investors to take small risks with the potential for huge captial appreciation. Information Age startups often experience a thousand fold increase in value in less than ten years. From the information provided by the David Choe story, we can infer that Facebook returned 3,000X capital appreciation to its early investors.
Crowdfunding still provides a serious obstacle to most, usually young, inexperienced startup teams. As a rule the crowdfunding offer must contact between one and two potential investors for every USD raised. The startup team intending to raise 500,000USD has no practical way of reaching 250,000 to 500,000 potential investors.
By joining an Enterprise Network, the startup team immediately plugs into an existing crowdfunding community which, assuming the startup team chose the network it joined carefully, are predisposed to investing. Most networks will have a crowdfunding publication which will make presentation to the investment community fast and cost effective.
Marketing
The more a startup intends to capitalize upon a niche market the more difficult and more important is cost effective access to the market. McDonalds can advertise almost anywhere because almost everyone eats at McDonalds. Providers of high ticket, corporate purchases have somewhat more difficulty since the vast majority of people are not corporate decision makers. They do not want to pay for advertising where only a tiny percent of readers, viewers, etc. are potential customers. Fortunately, there are many magazines and some television that have a very high percent of corporate decision makers in their advertising reach.
This is why Enterprise Networks will form primarily around a shared customer base. As the economy becomes more nichified, both because of the more bespoke preferences of high income consumers and the cultural fragmentation of the Cultures of Affluence, cost effective access to markets will become one of the most important success criteria for startups.
Scope of Opportunity
Since Real GDP in the developed nations is going to increase at least ten-fold during the Transformation, 90% or more of the their 2040 GDP will need to be 'new business'. Additionally, what are currently considered to be 'developing nations', most notably Brazil, Russia, India and China, will likely 'catch up' Overall, Gross World Product will likely increase more than forty fold.
Consequently, while the markets in publicly traded securities will be bearish for the foreseeable future, the business outlook is strongly bullish and that will translate into a strongly bullish private equitly market for investors and entrepreneurs of the Enterprise Networks.
There are several reasons why the Information Age Enterprise Networks will replace the traditional hierarchical corporations.
Second, large, often multinational, corporations are creatures of the global public equity markets. Their rates of returns, their structured equity sections, their management relationship with markets and market analysts define them. As the investment dollars are driven to the private equity markets, with smaller scales and higher risk adjusted rates of return, they will not be able to provide the equity instruments and structures that the new investor wants. In response, large corporations will likely decentralize and offer shares in subsidiaries and business units for sale in an effort to become competitive with Enterprise Networks. Some will succeed. However, they will no longer be what they were. They will have essentially converted themselves into an Enterprise Network.
Third, Enterprise Networks are free to make superior long term decisions while publicly traded multinationals are driven by the need to 'deliver' on the next quarter's results. Over time, these superior decision making incentives will result in superior decisions.
On the other side of the coin, the best Knowledge Workers will prefer the relationship being offered by Enterprise Networks over what is offered in a traditional employer/employee relationship. It is also far superior to the Contractor or Consultant relationship, which today is replacing many of the employee positions. Rather than managers making arbitrary decisions on the proper compensation, the markets will allow for income limited only by the quality of effort.
Conclusion
The Enterprise Network represents a fundamental component of the dramatic transformation that is about to overtake the world. It will be disruptive for most but will be a tremendous opportunity for those who properly anticipate it and take action to capitalize upon their superior knowledge of futurity.
The Enterprise Network has some elements of diversified corporations, save that the degree of management control is greater. In quickly evolving markets, this is critical. It has some elements of the 'enterprise incubator', however, it is intended to be a permanent home for the enterprise, providing ongoing access to consultative, treasury, legal, accounting and marketing support services. It has some similarities to franchises, especially the often repeated characteristic of 'being in business for yourself but not by yourself.'
Despite the similarities to some existing institutions, the Enterprise Network is, in the end, a new and novel business structure particularly well adaptive to the niche markets of the Information Age. The forward looking person, cognizant of the ongoing demise of the employee position is well advised to pursue the formation of and membership in a personally enabling Enterprise Network
Conclusion
The Enterprise Network represents a fundamental component of the dramatic transformation that is about to overtake the world. It will be disruptive for most but will be a tremendous opportunity for those who properly anticipate it and take action to capitalize upon their superior knowledge of futurity.
The Enterprise Network has some elements of diversified corporations, save that the degree of management control is greater. In quickly evolving markets, this is critical. It has some elements of the 'enterprise incubator', however, it is intended to be a permanent home for the enterprise, providing ongoing access to consultative, treasury, legal, accounting and marketing support services. It has some similarities to franchises, especially the often repeated characteristic of 'being in business for yourself but not by yourself.'
Despite the similarities to some existing institutions, the Enterprise Network is, in the end, a new and novel business structure particularly well adaptive to the niche markets of the Information Age. The forward looking person, cognizant of the ongoing demise of the employee position is well advised to pursue the formation of and membership in a personally enabling Enterprise Network
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