Why the Rules of the Entrepreneurial Game Are Changing

THERE WAS A TIME when AOL was how most Americans got online. Co-founded by Steve Case, American Online at its peak handled nearly half of U.S. Internet traffic and was the first Internet IPO. From his unique vantage point, Case shares his playbook for the future in The Third Wave.

Case believes we are now entering the Third Wave of the Internet. The First Wave was building the Internet. The Second Wave was building on top of the Internet. And the Third Wave is integrating the Internet in seamless and pervasive ways throughout our lives.

Leading on the Third Wave of the Internet

The Third Wave is about leveraging partnerships. Entrepreneurs of the Third Wave will spend a great deal of time focused on things other than tech as they work to connecting the Internet to everything else. It will be a matter of connecting ideas to create context.

“The entrepreneurs of this era are going to challenge the biggest industries in the world, and those that most affect our daily lives. They will reimagine our healthcare system and retool our education system. They will create products and services that make our food safer and our commute to work easier. The Third Wave of the Internet will be defined not by the Internet of Things; it will be defined by the Internet of Everything. We are entering a new phase of technological evolution, a phase where the Internet will be fully integrated into every part of our lives… As the third wave gains momentum, every industry leader in every economic sector is at risk of being disrupted.”

For example, education will be more personal, more individualized, and more data driven. “Education innovators were often too focused on technology in the First Wave, and too much on content in the Second Wave. The winners in the Third Wave will leverage technology and focus on great content, but also understand the importance of context and community.”

Case believes that if you are to start a successful company in the Third Wave it’s going to come down to partnership, policy, and perseverance.

Can You Work with Others?

Your partnership skills may very well be the determining factor in the success or failure of your product. Partnerships help to bring credibility, momentum and a sense of inevitability.

Can You Work with the Lawmakers?

The government is a key force in the Third Wave. Third Wave entrepreneurs will need to figure out how to work with governments. “No matter how good an idea, a Third Wave company that lacks a clear strategy for policy is a dangerous gamble for investors. It is not that success is impossible, but the odds make it a difficult bet.”

Are You Adaptable?

Of course perseverance is critical in nearly everything of any importance. But Third Wave entrepreneurs will need to have a special kind of perseverance in a changing world to manage tensions. “The winners of the Third Wave will be those who chase big-impact ideas with a sense of urgency—but also methodically and diplomatically. It requires a fresh perspective and the ability to look a new paradigms without being burdened by legacy dogma.” He adds, “Third Wave entrepreneurs must find a way, then, to bring both viewpoints to bear—the nuanced perspective of the defending incumbent and the relentlessly disruptive mind-set of an entrepreneur on the attack.”

In the Third Wave innovation can happen almost anywhere—anywhere there are experts in the field your are trying to disrupt. “During the Third Wave, though products will be tech-enabled, they won’t be tech-centric. They’ll use apps, but the product won’t be an app. And so the benefit derived from being surrounded by the tech world won’t be as high. Instead, being surrounded by experts in the industry you’re trying to disrupt may reap the biggest dividends.”

Case makes a distinction between “startups” and “small business” especially where policy is concerned. While startups are businesses that can scale quickly and disrupt an existing category, small businesses are focused on steady growth in the long term. More to the point: “The difference between the two is reflected both in the kinds of problems they are trying to solve and in their effect on the broader economy. Indeed, it is not small businesses but new business startups that account for nearly all of the net new job creation in the United States.”

Collaboration is Key

On a final note, Case reiterates: “Entrepreneurs as ‘Soloists’ will be replaced by orchestras playing a stronger, more credible tune. If you want to go far in the Third Wave, you must go together.”

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Posted by Michael McKinney at 06:49 PM
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