I was with Umair Haque last night and he urged me to read and respond to his Manifesto for the Next Industrial Revolution – something I was keen to do for a couple of reasons.
- He is urging us (and by us I mean investors, entrepreneurs and pretty well society at large) to get focused on the big problems – e.g. sustainability of the planet and organising the world’s hunger and thirst – who wouldn’t want to create/be part of the Google equivalent that solved those problems?
- The web has reached a level of maturity now where new ventures are somehow less exciting. There has been extensive discussion of this by Fred Wilson and others – but I guess the key point for me is that the canvas is no longer blank. We will keep investing here because there are a ton of problems still to be solved – search is still only 5% of the way there, Facebook and Myspace have shown the appetite for social applications, but their recent declines in traffic show that we all still need to figure out how to sate that appetite, etc. etc. – but going after those opportunities is maybe becoming less adventurous and more mechanical
So starting to think about these new areas is definitely fun for me.
So what is my response Umair’s manifesto?
As is often the case with Umair’s ideas I find myself in agreement with the thrust of what he is saying, but suspect itwill be hard to action as I go about my job of investing in startups and then helping them grow and exit over say 3-5 years.
To explain. As I read it there are three main thrusts to the manifesto:
- Good corporate DNA will be the driver of success in a the next generation of startups
- For the sake of global peace and prosperity those startups need to solve our big problems
- Those startups will have networks, markets and communities at their core
So far so good. I am in total agreement with all these points.
The challenge for me as a VC locked into the logic of 7 year funds is that things need to happen reasonably quickly. This question and answer from Umair captures both the opportunity and the timing challenge:
Where is the next industrial revolution crying out for revolutionaries? Simple: in industries dominated by clear, durable, structural barriers to efficiency and productivity.
The opportunity lies in the productivity and efficiency to be unleashed. The challenge comes from the durable, structural barriers.
I think this leaves us with two options – either the structure of VC funds changes to allow longer investment horizons, or smart entrepreneurs find ways to make change happen quickly in these staid industries. I know for sure that neither of these things will be easy. Then again, if it was easy, everyone would be doing it….
I’m going to finish by indulging the social scientist within me. The widespread dis-satisfaction that touches much of society today stems from alienation in the classic Marxist sense. There is too little meaning in life. One of the appealing things about Umair’s vision of the future is that I can see the combination of pervasive good corporate DNA and the rising importance of networks and communities could help, or even solve, this problem.