Eric Lange
Well-known member
I think this is the most important barrier to economic recovery at work today, and it's a real structural problem. A 20-something or 30-something entrepreneur gets offered so much cash that it's hard to refuse, then the company is controlled by people who don't have the passion for the business that grew it. The VCs are interested in harvesting all the money they can as fast as they can, so they look to a "China strategy" to deliver maximum short-term profit margins. Along the way, two things are lost: the business loses a founder who has passion for the idea, and the founder loses the opportunity to learn how to take a company through scale-up to maturity. And the economy as a whole suffers a lot from this.
No less an entrepreneur than Andy Gove (one of the founders of Intel) spoke to this in this article about a year ago. http://www.denverpost.com/business/ci_15537041?source=rss Fascinating (and a little disturbing) reading.
Dave thanks for posting the link to that article.
I think there were at least 30+ points in there that really resonated with me. Quite humbling in a way. A lot of these things I/we have direct experience of.
The points that were made about scaling up on US soil are very valid. On the one hand yes one can scale up a business from a small set of innovations, but the ability to innovate in a continued and substantial way to get to much more fundamental technological development is very difficult to achieve. [That is one of my personal goals]. The universities can innovate in their own way; but for a lot of what is really needed in the future requires very deep corporate R&D investment that has in mind a longer arc or trajectory. Unfortunately a lot of US (mid sized and even larger) companies get locked into a business model that does not support fundamental R&D. In essence the R&D and innovation becomes much more superficial and therefore we get into a negative spiral of diminished return on every dollar spent on useful R&D, and instead we concentrate on developing the I-phone 9, that has marginally more capability than i-phone 6. I think over the past ten to fifteen years I feel that the rate of fundamental innovation has substantial declined in favor of superficial quick buck tech. In the long run this approach is going to be very damaging I think.
I think the proposed remedial action (in the cited article) is sound; BUT this requires “politicians” and strict enforcement of international business law. Unfortunately I don’t see Judge Dred putting on a suit and tie and do battle on the international stage. I also feel that the “softness” of western attitudes will be taken advantage of. The irony is that the finger is usually pointed at corporate interest as to why the US political system does not serve the interests of the common man. Ironically it seems that US corporate interests are not politically up held on the international stage? [Apart from the ludicrous “oil” wars…which have totally bankrupted the nation but obviously helped a handfull of US corporate giants (talk about the ultimate "hand-job" as Jim might put it)]. Short term “greed” and lack of appropriate representation on the world stage will in the end be our undoing. That coupled with business models that don't or can't support fundamnetal and useful R&D.
Eric