May 14 I attended the Peer Financing for Developers event organized by Embarkons Inc CEO Trevor Cornwell and hosted by law firm Cooley LLP in New York. Against a backdrop of Diaspora's extraordinary success raising funds through Kickstarter,a cadre of smart entrepreneurs representing Grow VC, Chittai, LendFriend and Appbackr explained their companies’ approaches to enabling peer funding of new ventures. Beyond insight into an emerging new industry what left with me was a sense of glimpsing the future. Here’s why.
With official U.S. unemployment close to 10% (and many people I know “statistics”), the energy and optimism among Peer Financing participants was refreshing. An assumption that the future lay in creating new products and businesses pervaded the room. And that’s good given thriving new businesses is exactly what the U.S. needs.
The Financial Times May 10 reports that small, young businesses are responsible for most new employment:
"New firms are essential to recovery. From 1980 to 2005, virtually all net new jobs were created by companies less than five years old, and the one to five-year olds created two-thirds of the jobs."
This reality is driven home in research at Deloitte's Center for the Edge showing the continuing declining Return on Assets (ROA) for U.S companies since 1965.
Source: ZDNet from John Hagel III, John Seely Brown, and Lang Davison (2009) The Big Shift: Measuring the Forces of Change Harvard Business Review
Looking back reminds us that wealth flows to business minded entrepreneurs from the Rothschild’s, Rockefellers and Vanderbilts to the founders of the iconic 20th century technology companies, IBM, Microsoft, Apple, Oracle, Salesforce, eBay, Amazon and Google.
The recent downsizing and destruction of full time jobs that came with the financial crisis point to the changing dynamics of employment, to the "eLance economy" as forecast by Tom Malone and Rob Laubacher in their 1998 book and fluid organizations described in The Future of Work (2004).
My take away from Friday’s Peer Funding event was not just admiration for the entrepreneurs determined to create thriving businesses and a new peer financing industry but a reminder about vital 21st century skills. In an uncertain and dynamic economy being entrepreneurial, innovative and able to run a business are essential whether you are in business for yourself or trying to sustain working in an organization.
What’s your sense? Are entrepreneurship, an ability to innovate and run a business even more important skills in this 21st century? And from what industries will the wealthiest entrepreneurs emerge this century?
~ Jenny Ambrozek
