An Applied R&D Lab Serving Solo and Family-based Entrepreneurs in Rural and Distressed Urban Communities
The Nanocorp Primer #2
New Economy Venture Capital: A Nanocorp Perspective
New Ways to Play the Great Game of Business
The Myth of 'Internet Speed'
At Sohodojo, we think Internet Speed gets way too much attention. Speed is important for Empire builders, while Internet accuracy is more important for collaborative communities of entreprenurial free agents and dejobbed small business owners.
But the domain of venture capital is a clear case where Internet speed is starting to reshape an industry's widely-shared common business model. Before we delve more into the future face of venture capital...
What's all this talk about "business models"?
Business model... it's a buzzword du jour if ever there were one. You can't watch a Digital Jam (CNN's tech show, RIP) interview or read a Red Herring or Fast Company article without someone waxing on about his or her business model and how wonderful or distinct it is. A lot of this talk is empty marketSpeak. But when the talk is authentic, especially when it's about web business models, what does it mean?
The happy-face diagram above is a simple business model. (Since we talking about the aggregate model all venture capital businesses, we are more precisely describing a simple industry model as opposed to a particular company's business model.) The nodes (people, companies, products and services) and lines (moneyflows, energy commitments, product and service offerings, etc.) connecting the nodes form a graph. We're talking 'graph' as in graph theory, a branch of mathematics that is well-suited to model-making.
In the model above, Company elements (X Inc., Y Inc.) and Entrepreneur elements are 'tightly coupled'; the entrepreneurial team is bundled inside a company.
This coupling is how our worldview (our collection of assumptions about the way things work) drifts into our formal models. In this case, Industrial Era thinking reflected a world where companies were relatively long-lived, and their marketplaces of products and services were dynamic.
The 21st Century won't be like this. Savvy venture capitalists will understand that the 'pieces' are the same, but the rules are changing about how to put the pieces together, the VC meta-model is evolving.
Old Economy venture capitalists create and play in product and service markets through tight couplings between entrepreneurs and companies.