Last week, this blog discussed one of the important small business insights from Bhu Srinivasan’s excellent book, Americana: A 400-year History of American Capitalism.
Note: That insight appears here, Henry Ford and the Problem of Customer-ization.
But I want to share one other big insight for small businesses: The technology entrepreneurship intersection.
Fortunately, this insight takes only a few words to discuss.
The Insight from Mr. Srinivasan
Here’s the insight: Again and again, when you look at centuries of capitalism, as Srinivasan does in Americana, you see that technology drives much economic growth and opportunity. Not all of it, of course. But much of it.
Furthermore, technology and innovation crash over the economy in wave after wave after wave.
Finally, these waves of technology create both obvious, and also not so obvious, opportunities for entrepreneurs…
Technology Entrepreneurship Intersection #1: Technology Products
The first and the terribly obvious opportunity we see? The opportunity to develop new technologies and then build businesses selling those technology-loaded products.
Good examples go back centuries: Eli Whitney and the cotton gin… Thomas Edison and the light bulb…
One sees more recent examples, too. Boeing and the airplane… Microsoft and desktop software…
We often easily remember only the grand slam winners in this category. And many entrepreneurs fail trying to take this route.
Clearly, however, selling technology represents one way to achieve entrepreneurial success…
Nothing particularly insightful here, right? I agree.
Furthermore, this inside-the-box intersection, though it produces billionaires, maybe doesn’t provide great small business opportunities. Too risky, too obvious.
Technology Entrepreneurship Intersection #2: Passive, Tactical Application
Which maybe explains why passive application of technology appears to be the most common intersection of technology and entrepreneurship.
And you and I do this all the time. We’re using computers and networks to manage information and automate processes. Many of us have hardware and machinery automating any part of the workflow we can.
And then, of course, we pay lots of money to technology product vendors like Microsoft and Apple.
We have to do this.
But the incremental value you or I get from upgrading to the newest version of Microsoft Excel or a faster computer? Pretty insignificant.
Technology Entrepreneurship Intersection #3: Strategic Technology Application
A third technology entrepreneurship intersection exists, too: Using technology to transform an existing business model.
You can look at more recent big technology companies from this perspective: Google and Facebook using search engines and social networking websites for advertising businesses. Amazon and Alibaba using websites and logistics systems for retailing.
And look further back, and you see the same pattern.
Earlier entrepreneurs like Vanderbilt using Robert Fulton’s steamboat technology to transform the shipping industry and Carnegie using Henry Bessemer’s furnace to transform the steel industry.
But often hidden from the general public, you see lots and lots of smaller ventures that use technology to change an existing business model. Or you do if you keep your eyes open.
And those changes can give your small business a radical strategic advantage.
You and I can’t passively use the technology, of course. We need to re-engineer our business models. Or big pieces in the process.
I share some technology-based changes we’ve implemented in our small business, which have produced strategic advantages, via the links below.
But I bet if you start thinking about and looking out for this intersection in your and other small businesses, you’ll see more examples.
I leave you with this thought: Big opportunities exist for you and me to re-engineer our small businesses for technology. And we need to not simply stop at the point we’re passively buying hardware and software and other expensive gear.
A Quick Final Comment
A final quick comment…
Not all of the technology-led change from the last four centuries counts as good. Yes, absolutely, much of the change contributed to growing the economy and rising living standards for Americans.
But Srinivasan paints a heartbreaking picture of other intersections—for example, between Eli Whitney’s cotton gin, large scale cotton farming and the enslavement of human beings.
We want to careful. We want to work for good.