Today’s entrepreneurs chart tomorrow’s course.
Back in 1995, I had the opportunity to sit in on the first internet-based video telecast, put on by IBM between its New York and San Diego offices. The images were herky-jerky and the sound quality was so-so, but from that moment on, the world began to change in interesting ways, and thousands of new business ideas were sprung. Nowadays, the entire world is being run via video teleconferencing.
The experiences we are collectively having via videoconferencing may be paving the way for the next generation of business models as well. Tomorrow’s ventures may be built upon the “zoomification” of work, education and training, as explained by Lars Sudmann, former CFO of Procter & Gamble Belgium and now innovation leadership and board advisor to organizations such as The Conference Board. Expect to see, for example, “a ‘Zoom’ for university degrees, corporate training and next-level corporate remote work,” he explains. “So far, it was assumed that one has to be together face-to-face for this, but with great user experience like Zoom and AI-powered recommendation and idea generation I see a wide range of possibilities on the horizon that will be captured.”
Turbulent times mean pain for many organizations, but at the same time, every turbulent period has produced its share of entrepreneurial innovators who have defied the common wisdom of hunkering down. Will the current times – with the Covid-19 crisis and ensuing economic morass – give rise to its own generation of innovators? And we’re talking about new ventures within existing companies, as well as scrappy startups. I put that question to Sudman and other leading venture capitalists, CEOs and experts in the market, and will be providing their predictions in a series of posts over the coming weeks.
Some of the world’s greatest companies – Apple, Microsoft, Facebook, Google, Uber, Slack, Airbnb, Twilio, Shopify, Square and Stripe — were launched during economic downturns. This is no coincidence, says Umesh Padval, venture partner with Thomvest Ventures. During downturns, he explains, “investment in innovation typically declines as investors become very cautious. This creates the Darwinian theory of survival of the fittest. Lots of undifferentiated companies can’t raise money and file bankruptcy or they get sold. However, the best companies with solid teams and differentiated platforms, survive and get funded.”
This could one of those remarkable periods when uniquely resilient companies emerge, Padval continues. The rush to digital means the world is ripe for new ideas and approaches. “Work from home has increased the use of streaming video, video conferencing and online shopping and connecting with business and personal contacts,” he points out.
When conceiving new ventures, start with the business model — and not necessarily the technology. “Lately, we’ve seen a lot of innovation in business models,” says Ondrej “Ondra” Krajicek, chief technology strategist of Y Soft Corporation. “Cloud and the innovations around cloud are mostly about the innovation in the business models. It’s important to distinguish between innovating through these business models versus innovating with technology. Technology done right can open a lot of doors and if there is one good reason for future proofing, it is business model flexibility.”
When it does come time to consider the technology, it’s important to recognize there is no single technology that can make an impact. Instead, it depends on “how technologies work together to deliver one seamless experience,” says Erik Day, vice president and general manager of Dell Technologies Small Business division in North America. “Independently, AI, machine learning and cloud are critical enablers of business continuity. But bringing them together and being able to apply these technologies to integrate workloads from across a company’s infrastructure is the biggest game changer and leads to smarter, more intuitive experiences.”
For example, Day says, “think for a moment if you applied AI to your supply chain management applications to quickly correct inefficiencies and optimize your supply chain. No doubt an excellent use of AI. But what if you could deploy that same supply chain app in the cloud, integrate it with your warehouse operations and HR applications? Now you can not only see what’s happening in your supply chain, but you can apply AI to all three apps in the cloud, resulting in real-time insight into how a spike in orders can be supported by your warehouse inventory and growing staff.”
Still, some technologies have had a greater impact on the success of new ventures than others — and we’re talking about cloud here. As the move to cloud accelerates, “technologies which manage the hybrid and multi-cloud data and applications management companies will do extremely well,” says Krajicek, who observes the profound impact cloud has had on business models. In the software industry, for example, “the business model has changed drastically over the last five years to SaaS model from perpetual license model since it reduces costs for large and small enterprises on a pay-as-you-go model,” he observes.
This is having enormous implications well beyond the software industry — enabling innovation at levels not seen before. “It’s important as an entrepreneur to ask, ‘What is the potential of a particular technology, and what do we need to do to tap into the potential?’” said Krajicek. “As long as there is internet access, as a small to medium enterprise, you can take full advantage of today’s technologies. At one time, a business had to undertake its own research to find the best technological solution, which took money and time to complete. Today, a business can take advantage of Google, Microsoft, Oracle, Amazon or IBM, and the tech is available quickly. This brings incredible opportunity that has impacted whole economies by allowing small to medium enterprises innovate and compete with the giants.”