Shifting Paradigms of Entrepreneurship Strategy.

26 04 2014

Shifting Paradigms of Entrepreneurship Strategy
(in a new world order driven by the rise of New Media)

© mihir gajrawala
Published on http://www.mihirgajrawala.com on 26.4.14

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New Media : a phenomenon created due to the advent of social media converging with the tremendous spread of mobile technology. The key features (at this point in time), being on-demand access to data, inherent interactive feedback capability and community formation potential.

It has been an age old dictum in our business tradition – ‘it takes 1000 days for an enterprise to set up, after which one may think of driving it to above average profits’.

Does this still hold true? Try this…
It took Instagram 730 days to turn itself into an enterprise valued at a humongous $1bn, around ` 5500 crores. Around 24 months back, Facebook came up with an IPO having valuation at a staggering $100 bn; the point is it took the company less than 3000 days to reach here. This social media behemoth went on to acquire a 5 year old start up – Whatsapp-for an unbelievable sum of $19billion dollars. These are not the only events. Let’s take an Indian example. Cisco Systems, the technology behemoth took a 17% stake in a lesser known start up, Qyuki – founded by Shekar Kapur and AR Rahman, at a great pricing of `27 crores. And this was even before the beta version launch.

Just look around in the spectrum of New Media and the concept of time value of money seems to be going through a fundamental change. And if we delve deeper it seems the global consumer behavior is changing dramatically leading to sweeping transformations in the contemporary business environment. Every paradigm that we know is changing, already.

So what are the fresh paradigms shaping up?

Let’s go back in time to put our discussion in a better context.

Powered by the discovery of electricity, entrepreneur/scientists worked on it and some life changing inventions took place during the late 18th till late 19th century. These phenomena carried on in the entire 20th century leading to the invention of computer followed by the Internet. The world has changed. The skill sets existing a century before are not even known now. Who would use Human or bird messengers for communication, you had telegraph and later email. Who would have even imagined that the skill set of making earthen vessels would become redundant before steel and other metals came into being? But nothing could stop human imagination, and with it the world order went through change.

The prime driver of this change was the human craving for ‘convenience’. In today’s scenario, ‘convenience’ & ‘ease’ are being taken over by a totally new set of values, which is – the human craving to express, to share and eventually to INFLUENCE. The change occurring today is potentially far more impactful than what the world has ever seen earlier.

And we are all part of this change. We have changed. Our motives to do ‘something’ are going through a sea change. And the reason I am quoting this change to be more powerful is the speed at which it is occurring. What earlier took centuries to occur, now may just happen in decades or even years.
You don’t take pictures to make an album to show to your kids, you take them to instantly share it with your community. You do not wait for a weekly film review, but you are plugged into the first show tweet review. You do not have to wait for tomorrow’s newspaper to tell you what your favorite sportsman did on his birthday; he would have already shared it with his followers on Twitter. You do not need to have ‘contacts’ to let a film maker notice your story, you connect with an expert on Qyuki. Before we even leveraged ‘networking’, the concept of ‘community’ is taking over. While as a nation, we still haven’t ended bloating about ‘outsourcing’; the early signs and power of ‘crowd sourcing’ is out to behold!

Creative individuals from across the world come together to develop new art or commercial offerings; a phenomenon unthinkable just a few years ago. Entrepreneurs have now an option of crowd funding at their disposal, and thousands of new start ups are coming up just because of the availability of such unique funding. These phenomena are huge, considering they are bringing about a sea change in the existing understanding of the idea of ‘ownership’.

We would be blind if we are not seeing this. The new paradigms have already emerged in the world of Entrepreneurship strategy. And we all know that business has to follow where the ‘community’ is heading.

Let me list down what’s happening:
• Job creation as the prime motivator of entrepreneurship is taken over by ‘potential to co-create’
• The demise of stand-alone firm as the primary unit of competition; linear hierarchic firm structures are giving way to multi polar, decentralized structures – where the skill, power and control is spread widely across individual firms/individuals.
• The demise of nation-state as the principal unit around which international economic activity is organized and conducted.
• The focus of business is shifting from ‘the firm’ to ‘the community’

Based on all of these the over arching trend in front of us is :
‘Shifting focus from consumption economy to influence economy’

As entrepreneurs we cannot over look this trend. Every aspect of enterprise creation is changing in a phenomenal way. We will need to develop ways to identify community based opportunities for developing capabilities and acquiring the specialized resources needed to compete in today’s fluidic market place, and we need to understand our own strategic value in the context of shifting focus from Investment management to Access management.

Driven by need of convenience we created a consumption based economic model and ended up given control and power to Investment houses. This may soon become obsolete. Driven by the desire to ‘express’, an Influence based economic model is emerging leading to hand over control and power to those with ‘Access’.

Do you wish to wait till suddenly you realize that no one uses earthen pots any more? As evolving entrepreneurs we have to understand the essence of this emerging paradigm and generate keys to long term entrepreneurial existence.

 

Inputs taken from :
1) Shekhar Kapur’s Speech at NASSCOM India Leadership forum 2013
2) “Changing Paradigms of International Entrepreneurship Strategy” Paper published by Richard W. Wright & Leo-Paul Dana in the Journal of International Entrepreneurship in 2003.

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