Entrepreneurial world could use sudden infusion of big ideas

Published in UT San Diego, January 8, 2013

I am not a good predictor of the future or what the next big thing is going to be, and looking back is only an exercise in recounting.

So I am going to stay in the present, which is a bit depressing. I am not thinking about fiscal cliffs, guns, taxes, health care, education or the homeless — all of which qualify for serious discussion. What I am wound up about is the thinking behind the word “innovation.”

First, I want the entrepreneurial community to embrace BHAGs. These are defined by Jim Collins in his seminal book, “Good to Great,” as Big, Hairy, Audacious Goals. These are not little things like improving sales 10 percent. These are visionary goals that are strategic and emotionally compelling, what Collins calls “a 10- to 30-year goal to progress toward an envisioned future.”

No more small ball.

A recent Wall Street Journal article pointed out that the lackluster initial public offering results of Facebook, Zynga and Groupon had taken the hype out of social media companies, deflating the balloons of the venture boys in Silicon Valley and causing them to bail out of funding that junk and looking for something new and pretty.

What took so long? Come on, a company like Zynga that makes all of its money from 3 percent of its users who buy virtual things with real money? How can you resist that idea? Or Groupon, where the cost to acquire a customer is so high that you never get profitable, but you can scale and you only lose two cents on each sale. Like the old story says, you can make it up on volume.

Sadly, another recent Wall Street Journal article said that the most powerful and game-changing innovations have already happened. In that column, Robert Gordon says, “In setting out the case for pessimism … I am not forecasting an end to innovation, just a decline in the usefulness of future inventions in comparison with the great inventions of the past.”

Where in America today is there a cry for “radical, unpredictable, bound-to-fail, but what the hell, let’s try” innovation? I am depressed when I read about one more app that helps me find an app that helps me find a parking space or a latte. I don’t care. It might be nice to have, but it is not something earthshaking that is going to change my life dramatically.

Where is the drive for the “it will never work, but if it does, wow” stuff? And if you want to do that, where is the funding?

Building something meaningful means it has to be “anti-fragile,” the title of a new book by Nassim Taleb, author of the best-seller “The Black Swan.” The stuff has to be able to withstand stress.

And to the entrepreneurs who have visions of sugar plums — get real. The National Venture Capital Association polled its members, and, no surprise, found that CEOs remain far more bullish than investors. Only 38 percent of investors thought startup valuations would rise in 2013, compared with 78 percent of CEOs. That’s a math problem no algorithm can resolve.

And finally to the venture men and women (and not as many of those as we would wish), no more funding “get-rich-quick, just like the other guy, hope someone dumber than rocks will buy it,” ideas or features. Stop playing small ball for the fees, and take a few swings at the hard, down and away, inside slider. You won’t feel bad fanning on a Tom Seaver pitch. It breeds character.

Rule No. 147

If it were easy, everyone would do it.

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