Entrepreneurship is the engine behind an innovative always-changing economy that harnesses the individual Entrepreneur. The Entrepreneur is the visionary driver building the framework and guiding this engine through startup obstacles and innovation despondencies. This breed of workers drives economic events through a semiconscious process of intuition and insight, and with a deliberate strategy and an overall vision. The next generation of entrepreneurs — digital entrepreneurs — have been growing due to an ever increasing number of digital customers and internal digital workflows. These fringe players are usually or normally at the top of the field they are in and have experience in most functions within an organization. My prediction: There will be more fringe online entrepreneurs in the next 5 years than ever before. As the digital lifestyle becomes ingrained as a behavioral attribute of the educated, next generation entrepreneurs will be there to capitalize. Just as a gas engine distributes power, control, and a steady comfortable ride, entrepreneurship does the same for its fastest moving driver: the digital entrepreneur.
Can you cut it?
In the United States one in ten people are estimated to be involved in starting a new business or managing, or at least partly owning a business. New emerging markets such as the Internet, personal computers, biotechnology drugs, and services such as overnight package deliveries drive small business. Small companies drive these technological advances and generate more new jobs than any other markets. Did you know that small businesses provide over 75 percent of net new jobs added to the economy, and out of all those small businesses, 39.1 percent of jobs are in the high technology sectors? With such a large amount of opportunity, knowing the art and science behind entrepreneurship and technology is essential.
Digital Entrepreneurs view the world through one or two 19 flat screen monitors. They conduct all normal processes, from internal management and customer relations to public relations through this screen with the same passion that a traditional entrepreneur does with a business like opening a restaurant. The digital entrepreneur understands the digital revolution, views e-everything as more than a billion dollar a year industry. What does it take to be one of these revolutionaries? First of all, a tremendous understanding of the past and current Information Technology. With the Internet and computers getting into their teens there is a history behind computing and a digital life. Their history books will be 30 years old and understand modern proven techniques in management and workflow. There also needs to be a innovative passion for opening new doors and opportunities. There is no concrete mold for an entrepreneur but there is a set of personality traits that is commonly seen. They fit type A personalities. Type As are typically driven, hard-working, self-confident, busy and impatient. In the digital world these type As can be seen writing tech-articles, speaking at conferences, and continuously devoting time analyzing the digital world. On top of devotion to the technology industry you must be dedicated to starting your company from ground zero. This requires being totally dedicated to their businesses, sometimes at considerable cost to their relationship with their friends and family. Over 22.5% of the CEOs of the Inc. 500 got divorced while growing businesses. This goes to say that they lack sensitivity towards others while growing a business. Many times entrepreneurs are impatient and ruthlessly drive themselves and everyone around them. They don’t have the tolerance or empathy necessary for team building unless it’s their team, and this sometimes affects personal relationships around them. These entrepreneurs know what they are deeply passionate about, what they can be the best at, and knows how to drive their engine. The digital entrepreneur manages this offline and online.
It is the digital consumer who is driving technological innovation via the Internet. Flickr.com, a phenomenal Internet 2.0 service that allows sharing of pictures and is experiencing 30% monthly growth in users, was recently acquired by Yahoo! for $35 million. Flickr founder, Stewart Butterfield, describes his 1.2 million members: they live pretty connected lifestyles; for most of the day, they have access to an Internet connection.
Stewart Butterfield and other digital entrepreneurs like himself have developed strategies on the Internet based on this growing digital consumer. IT industries have been growing at more than double the rate of the overall economy a trend that is likely to continue. Investments in IT now represent over 45 percent of all business equipment investment. And with traffic on the Internet doubling every 100 days the iPod carrying, MP3 downloading, video stream watching, blog writing, picture uploading consumer is driving opportunity.
The new digital economy has been described as something that all businesses need to be ready for or, “Businesses that aren’t will be toast,” says Don Tapscott, author of The Digital Economy (McGraw Hill). The convergence of computing, telecommunications, and content is a real revolution, giving access to a networked economy working in real time and without knowing distances. The digital entrepreneurs view this new network economy as the next generation playing field. With Internet 2.0 applications like Flickr and E-commerce applications like Amazon.com there is a new set of rules that are being made. As technologies continue to expand on one another, the only constant is that creative destruction will continue to dismantle old business models with new ones at a Moore’s Law rate.
New Set of Practices, Same Old Rules
In this era, digital entrepreneurship holds to a new set of practices based on an old set of rules. Maintaining old practices like low overhead, high productivity, and minimal ownership of capital assets are all expressed digitally with a new set of tools. Viral communications (company blogs), small business intranets, flight-travel saving collaborative application software, pay-per-use online advertising, and customer relation management software are all best practices fluent to the digital entrepreneur. One of the best seasoned digital entrepreneurs, Jeremy Allaire, founder of ColdFusion and once CTO of Macromedia, recently ventured into monetizing Internet TV with his creation, BrightCove. As well as a top-of-the-line brightcove.com website, he uses a personal and corporate blog where he gets a very efficient and effective PR opportunity for interested customers. On top of that, Jeremy creates a personal blogosphere as he writes for other industry papers like ContentNext and ColdFusion Journal. Jeremy doesn’t hide the research he has done and some people might consider giving up valuable market information a poor business practice. You can even view a rather internal Breezo presentation right from Brightcoves PR page. Hiding innovation is a common misnomer, as ideas are a dime a dozen.
William Bygrave, author for The Portable MBA in Entrepreneurship, tells his would-be entrepreneurs, “Almost any idea that they have will also have occurred to others…developing the idea, implementing it, and building a successful business are the important aspects of entrepreneurship.”
Jeremy Allaire and other entrepreneurs that are successful understand that innovation and best practices is always best to give to their community. Just as a rock or movie stars depends upon their audience, the tech industry leaders rely upon their community for fame and fortune. These tech leaders are growing. People with some post-graduate education and between 24 and 35 years of age are the most likely to start a new business. The post-graduates that are coming out of college today behaviorally rely on a digital environment and are receiving curriculums that are just catching up with technology. Combine this growing supply of entrepreneurs with demand — 75% (or 204 million) Americans with a fixed phone line that have home access to the Internet, up from 66% just a year earlier — and their is going to be a convergance of economic activity. It is important to understand that the educated digital entrepreneur is not the next generation of programmers. Rather its the next generation of programming managers that know how to harness their power. They are aware of the fatal assumption that Michael Gerbers teaches in E-Myth, “If you understand the technical work of a business, you understand a business that does that technical work.” They know it is not efficient to work countless hours programming. Rather they work on growing and managing your business by hiring engineers in the meantime.
Final reason behind the next digital boom in entrepreneurship is that overhead for a small business is lower than ever before. Small digital startups don’t have the market barrier that once existed. Open-source and/or very inexpensive software applications, inexpensive computers, and the extensible Internet marketplace are driving a low-cost startup opportunity.
With a large digital consuming market, an educated class of digital entrepreneurs, and low barrier to market; there is going to be more entrepreneurial economic activity than ever seen before.
Next generation entrepreneurship is growing. New digital applications will be grown by digital entrepreneurs. These digital entrepreneurs are more educated with an understanding of the online and offline structure behind a great, well-run organization. The next five years are going to witness more mainstream educated digital entrepreneurs than ever before on the Internet 2.0 highway.