Future Startups Will Succeed Only If They Acknowledge These Harsh Realities
The dotcom boom of the 1990s was a glorious and wonderfully chaotic time. When it began, nobody really knew that there was such a thing going on as a “dotcom boom,” they just knew that there was something exciting and disruptive happening, and they wanted in. Only a very small handful of visionaries truly saw the full scope of what it was and how it would change the world.
There were a lot of things about that time that failed. A lot of companies burned out quickly, a lot of venture capital money went up in smoke and a lot of 20-year-olds found themselves on the unemployment line with nothing on their resume except “Dotcom CEO.” Yet, a lot of things went right too: The innovative spirit changed how we view and launch startups to this day. Even though most of the companies didn’t last, the technology persisted and has made the world a better place.
Today, we find ourselves in the same situation.
Once again, most people don’t know what’s coming. In fact, it’s already begun, and the relatively small handful of people who see it will emerge as winners. The dotcom boom was only the beginning, and was only one peak in an ongoing cycle of technology-driven entrepreneurship. It’s the emerging dotcloud boom that will dominate the next 10 years, and its scope will run far greater with a disruption much deeper than the dotcom era. It has already begun to make permanent and transformative changes to business models, work models and much more, not just in startups, but in the largest of the Fortune 500 companies.
The dotcloud boom is lowering the barrier to entry for entrepreneurs, creating countless opportunities and eliminating the barriers that once defined who we are and what we may or may not become. It is redefining what a company is and what a job is. It allows us to take a more global, collaborative approach to business, and it lets us get right to the heart of what your startup really is -- to find, if you will, your company’s “God particle.”
Related: Get Ready for the DotCloud Boom
Enormous opportunities are arising for those who see what’s coming. Those who resist change aren’t going to like the dotcloud boom. It’s disruptive from a personal, business and political point of view. Some jobs will disappear as we redefine what a “job” is. Entire industry segments will disappear and others will be created. The dotcloud will form the heart of small companies with global ecosystems that will not be stopped by isolationist politics and trade barriers. No matter what your personal points of view may be, this genie is not going back into the bottle.
Make no mistake, there will be winners and losers. Your future prosperity -- and your very survival -- depends on acknowledging it, and learning to adapt to the challenges and opportunities being brought about by the new dotcloud economy.
Companies will become smaller, but with more partners, and those partners are just as likely to be from halfway around the world as they are next door. Automation and robotization will reduce the number of people it takes to complete any given process, and the lower-skilled manufacturing jobs that created the great American post-war middle class in the 1950s and 1960s will decline. They’re not going to China, they just won’t exist any more. A new middle class will emerge, but it won’t be based on the same sort of unskilled manufacturing jobs that gave the post-war generations their middle class prosperity.
The Post-War Anomaly
People, and especially politicians, will point the finger of blame at technology. They will blame other countries for what they perceive as a threat to the status quo. They will argue for a simpler time when America reigned supreme in the world.
Those times are gone and they are not coming back. “Making America Great” is not a backwards-looking process of recapturing a lost ideal based on an obsolete way of doing business. “Making America Great” can only be accomplished by embracing the technology and automation that is so rapidly eliminating last-century jobs, and using it to create new ones. It can only be accomplished by rethinking everything we thought we knew. It can only be accomplished in today’s global environment if, by making America great, we make the global community great.
That post-war boom between about 1946 and 1975 was an anomaly, driven by the fact that the rest of the world was rebuilding after World War Two. The United States dominated manufacturing, which was still largely driven by unskilled labor. During that time it was possible to hang in the back row in high school, skate by and graduate by the skin of your teeth, get a union card and a good-paying job at the plant.
Because of this anomaly, we were lured into thinking that American workers were the best in the world, anything made in the United States was inherently superior, and we would continue to be the world’s largest economy forever. Even though it felt good to think those things, it was never true. Today, we are starting to see the reality.
If you’re nostalgic for the 1960s and 1970s, buy a lava lamp, put on some vinyl records and listen to the Doors. But if you want to succeed today, know that it’s all about looking forward. In the next 10 years there will be unprecedented opportunity to take part in a global greatness that comes along only once every few hundred years.
Succeeding in this new era means looking to the future and acknowledging some hard truths. It means acknowledging that the jobs of the post-war boom don’t exist any more. According to a study by Harvard and Princeton economists, nearly all job growth has been in “alternative work” rather than traditional jobs, and most of that alternative work is dotcloud driven. The jobs come from new platforms that allow for freelancers, temp workers and contractors to launch their own small businesses.
Success in this new era means acknowledging that there is a narrow opportunity today for a small, born-in-the-cloud business to shake up yesterday’s giants by creating, providing and participating in these new platforms.
Success in this era means acknowledging that we are not an economy that is driven by manufacturing things because manufacturing today is really an extension of the technology industry. There is a prevalent myth that American manufacturing is on the decline, but in fact, American manufacturing is at an all-time high, with output at twice what it was in 1984, according to the Bureau of Labor Statistics. It just takes fewer people and a little more software to achieve those efficiencies. Manufacturers rely less on in-house workers and more on a third-party ecosystem of suppliers. Becoming part of that third-party ecosystem is the key to success in the dotcloud era.
We’ve seen great things since the dawn of the Information Age, but the greatest yet is still to come in the next 10 years.