We’re reaching an inflection point in economic history: the Third Wave of the Internet. According to a 2015 survey by the Global Center for Digital Business Transformation, business leaders said that nearly half of the top-ranked companies in their industries will be gone by 2020.
The increasing presence of internet connectivity in all aspects of our lives has provided entrepreneurs with tools to transform the largest industries in the world – health, education, food, financial services, energy - and the very way we live our lives. That’s the exciting news.
The not-so-exciting news is that after spending a few years the road meeting with hundreds of entrepreneurs, corporate CEOs, investors, and government leaders, I’m convinced that most people do not realise what’s coming. That’s why I wrote a book called The Third Wave.
I've seen this movie before: during the First Wave of the Internet - when companies like AOL, Cisco and others were building the infrastructure for an online world, there was a lag between recognising the emergence of a new medium and preparing to respond. Much of the communications and computing industries were disrupted and left behind.
Then the Second Wave, with new entrants building on top of Internet infrastructure to scale social, search, commerce, and eventually an app economy leveraged through a smart phone revolution.
Today, as the full potential of the "Internet Of Everything" becomes realised during the Third Wave, a new playbook is required. Whether you’re a CEO, entrepreneur, employee, or public policy leader - not only will succeeding become harder, surviving as a company or in a job will become harder. Below are five strategies to ensure success in the Third Wave.
1. Be curious, be paranoid
As many others have pointed out: the largest publisher today produces no content (Facebook), over one million people stayed with the largest hospitality company in the world (Airbnb) on New Year’s 2016, even though that company owns no hotel rooms and the largest taxi service owns no cars (Uber). This is the tip of the iceberg. Whether you’re just starting up, or your company has been around for decades, have no doubt: objects in the rear view mirror are closer than they appear. CEOs, entrepreneurs, and employees need to embrace a worldview that change is coming - and then you need to articulate that worldview internally and externally. Every member of a team will have to be curious about today and what’s coming tomorrow with focused attention to what is happening on the edges of your industry with an eye toward what may happen next.
2. Know your place
It’s never been easier for a company to start and scale in the city it calls home – it’s no longer necessary to move operations to London or San Francisco. That’s why I travel on "rise of the rest" entrepreneurship tours as CEO of Revolution and invest in talented innovators in places like Detroit, Michigan and Lagos, Nigeria. We are finding that local authenticity is key. Companies that harness a city's local strengths, DNA, and character are better positioned than ever to succeed. Artiphon - a company that makes music hardware and software - in Nashville, Tennessee was started by Mike Butera who lived on music row - Mike tapped the expertise of those in the city's growing tech scene, including at the Nashville Entrepreneur Center, and musicians in the city's arts scene. Artiphon was named by TIME Magazine as a top 25 Best Invention of 2015. Figure out what your local city does well and tap into it. And leverage new tools like crowdfunding to raise the capital you need to start or scale.
3. Be an attacker, not a defender
As Amazon CEO Jeff Bezos recently remarked, it's not a matter of if Amazon is disrupted, but when. In the business world there are attackers and defenders. Start-ups are on the attack and they play offense because they don’t have a choice. The corporate mindset, on the other hand, is often to protect the status quo. The attackers are passion about maximizing opportunity. All too often the defenders are focused on minimizing risk. But in an economy that is rapidly changing, inaction or incrementalism is often the biggest risk of all. Kodak knew the digital camera revolution was coming in 1975 when one of their engineers invented it. They knew that digital photography could disrupt their core film business in the long run, but executives were more concerned about the short run and didn’t make the right investments in critical R&D. Kodak declared bankruptcy in 2012.
It’s critical that organisations lean into the future, and have a bias towards action and innovation. Trying more experiments - knowing many will fail - will enable established firms to become nimble, more innovative and more entrepreneurial.
4. Engage with Governments
Government will be more central in the Third Wave than it was in the Second Wave. You might not want to hear that, but it’s true. If you can’t figure out how to work with government - and how to get government to work with you - you’re won’t be able to survive in, or transform, health, education, energy, financial services, or food. They have complicated regulatory regimes and political complexities. Don’t run from it, run to it, and you will be well positioned in the Third Wave.
5. "If you want to go far, go together"
There’s an African proverb I’ve come to appreciate: "If you want to go quickly, go alone. If you want to go far, go together." In recent years, if you had a great idea for an app, you could go it alone - it was all about getting the product right and driving viral adoption. But in the third wave, partnerships will be key. Start-ups need to partner with corporations to break through. And corporations need to partner with start-ups so they can benefit from innovations on the periphery, and be well positioned to own a piece of the future.