Start Up Blog

The Great Fragmentation – my new book

Posted in entrepreneurship by Steve Sammartino on June 10, 2014

I’ve had a lot of stuff buzzing around my head for the last few years. My local readers get their share when we have coffee. Recently I’ve put together a manifesto from my mind in the form of my debut book: The Great Fragmentation – why the future of business is small

It is being published with Wiley and comes out mid July. Here’s a picture of the cover below and below that I’ve got some offers for readers of startup blog.

 

The reasons I wrote the book was that it was my view that most of the business books these days are too thin. They have a single idea and just tell a number of stories and examples around that idea. I feel like the revolution we are living through is much bigger than that. I felt as though we needed a business survival manifesto. Something which assesses the entire change in the business landscape – not just a trend inside of it. My view is that all the barriers to entry are being removed. That there is a dramatic power shift happening. An industry and by industry fragmentation which can’t be avoided and must be embraced. That the playing field is being equalised because technology almost has it’s own agenda. And that agenda is to become cheaper, smaller, more distributed and more powerful – with humans as the beneficiaries, not necessarily corporations. But mostly this book is the intersection, of Anthropology, Technology and how these forces shape the Business world. You can read a little blurb about it here, or even pre-order a copy here. While I can’t be sure if this will be a best seller, I can guarantee you it will be a best reader!

If you haven’t already signed up to my blog via email, you can sign up to updates on the book (and other projects) by clicking here. Before the book is released I’ll have advance copies and other cool resources for your startup / business. These resources will be crazy good & available only to those who signed up. (including a couple of world firsts).

I really look forward to the scary part of hearing your feedback on my 200+ pages of having nowhere to hide and instead say: ‘This is what I believe, I hope you got something valuable from it’.

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The early money & the long money

Posted in entrepreneurship by Steve Sammartino on May 21, 2014

When we hear about startups that have gone on to be huge successes the mind often gravitates to all those early investors. Those who had a seat at the table in the angel rounds, those who knew the founders and got in early enough to make some serious money. It’s a natural reaction when companies go on to reach the unicorn level. It is true that people who get in early always make more money. Late money often pays a premium as future expectations (when positive) are priced into the investment.

But there is actually a way to become an early investor even when you are late to the party. The way to do it, is to be a long investor.

If we invest long, then by default we arrive early.

When we invest in something for the long haul, we eventually become an early investor. Even if the investment vehicle was well established when we arrived and got involved. If we stay long enough the price becomes cheap through the dual benefits of inflation & compounding. Just ask your parents what price they bought their first house for and you’ll see the relationship between long and early investing. It also works for quality stocks too. While very few people indeed got to invest in Google before their IPO, those who bought the stock on the open market once the stock was publicly traded would have made more than 6 times their original investment in 10 years.

When we start to invest in 10 year plus timelines all manner of investments from property to index funds provide outsized returns. And while we may not be clever enough to invest in something that grows quickly, we can be smart enough to invest in something long enough for it to become early.

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The ultimate time management lesson

Posted in entrepreneurship by Steve Sammartino on May 19, 2014

There’s a lot to know about time management, and even when we know it all, it’s pretty hard to implement. But if I had to impart a single thought on the subject of time management it would be this:

If the years seem to be passing quicker and quicker, it is because they are.

Yep, you read that correctly, each year we live is shorter than the previous year. That’s because everything we experience in humanity is experienced in relative terms. What we compare things to is what really matters. Our financial position, our height, our intelligence, our health… everything is compared to something. And so too are the years we live. The relativity of each year we live is a smaller percentage of the life we’ve already lived. This is why years seems shorter and shorter, and in relative terms, they are. For example, 1 year in a 10 year olds life amounts to 10% of the life already lived. While 1 year of a 40 year old is .25% of the life already lived.

For me this is a nice reminder that time is constantly running out. And we should make a concerted effort to get as much out of it as we can, even if that means we want more down time. The point is that we should make conscious choices on how we use our time, not just let it evaporate. I recently did a podcast on the topic of time management on the Beers Blokes and Business show. You can listen to it here.

And here’s one more doozy to close off with – you’ll never be as young as you are today. So get out there and make a ruckus.

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4 mind blowing presentations on the future

Posted in entrepreneurship by Steve Sammartino on May 17, 2014

I’ve recently watched a few presentations which really below my mind. Re-shaped my thinking on the next iterations of the technology revolution. Most interestingly, they all focus on independent systems, peer to peer and the end of the middle.

  1. Jeremy Rivkin – The zero marginal cost society.
  2. Mike Hearn – The trade net.
  3. Albert Wenger – World in Transition. (Why GDP decline is inevitable)
  4. Philip Evans – How data will transform business.

These talks aren’t short, but there aren’t any shortcuts in understanding what our future world might look like. I say, watch these instead of TV – you’ve got the time, it’s really all about how you allocate it.

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The Employee to Entrepreneur conversion

Posted in entrepreneurship by Steve Sammartino on May 15, 2014

If you’re reading this and you currently work for a company you don’t have an equity stake in – I reckon there’s a pretty good chance you’re planning your cubicle escape route. Today I wrote a post for Pollenizer on my Top 10 things employees need to know before they jump ship. The thing about entrepreneurship is that it is a change in environment. And like all new environments we enter the biggest challenges we face are never intellectual, but cultural.

You can read it here.

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Evolution & strategy

Posted in entrepreneurship by Steve Sammartino on May 12, 2014

Evolution itself does not have a strategy. It just lets what wins, win. If anything, it is the accumulation of a lot of in market testing. Traits, (or tactics) are tested for advantage, and those that work, keep on happening through natural selection. Nature tries everything. Nature lets things that don’t work die.

We too can help our business evolve. We just need to do what nature does. That is to not pretend to know what will work. Instead we should try everything and find out what does. The good news of course, is that it’s so cheap to try so much in a low cost technology world.

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Some companies are infallible, or are they?

Posted in entrepreneurship by Steve Sammartino on May 8, 2014

In a classic case of economic externalities, privacy has become the hot issue in the Digital Industrial Complex. It’s the industrial pollution equivalent of the digital era. There’s a lot of attention going to startups which circumvent or avoid centralisation of their services, or use what is becoming known as Block Chain technology. In fact famed Venture Capitalist Fred Wilson is calling their 2014 fund the Block Chain cycle. In simple terms, startups in which the information is distributed across the network of users, rather than stored in the companies server farms.

It got me thinking about how what seem like minor road bumps can become the key factors which entirely disrupt companies and industries. Privacy could be the type of road bump which up ends businesses, whose infrastructure is based on an old method. That method being, centralised data aggregation and distribution. I’m talking about brands like Google and Facebook. Companies who at this very moment seem entirely infallible, simply too important, big and powerful to ever lose their position of dominance. Personally, I don’t think it will happen, because unfortunately most people have a level of apathy where they usually don’t care about a potential problem until it really becomes one. And even then they sometimes still don’t care – just look at the climate change issue. Why this is interesting is that the thing which disrupted the recording industry, the retail industry and many others was that the infrastructure they set up became a distinct disadvantage. I’m starting to wonder if internet based companies with centralised data systems are creating an infrastructure which isn’t in line with a shift which technology seems to wants to make happen. The shift to distributed data.

Some recent numbers on a search engine called Duck Duck Go – a privacy based search engine are interesting. It is growing rapidly. Here’s a description of what they do straight from Wikipedia:

DuckDuckGo is an Internet search engine that emphasizes protecting searchers’ privacy and avoiding the  filter bubble of personalized search results. DuckDuckGo distinguishes itself from other search engines by not profiling its users and by deliberately showing all users the same search results for a given search term. DuckDuckGo also emphasizes getting information from the best sources rather than the most sources, generating its search results from key crowd sourced sites such as Wikipedia.. 

Here’s a chart of the recent growth that Duck Duck Go has achieved:

Screen Shot 2014-05-08 at 10.58.25 am

 

While this search engine doesn’t operate on a distributed system, it is interesting to see how a slightly different proposition to the incumbent can have a lot of meaning to groups of end users. Yes, it’s tiny in the scheme of search, but this is how change begins. Every disruptor was insignificant at some point. And we’ve already seen the disruptors being disrupted. For example streaming music impacting iTunes business in the space of under 10 years. It seems like dominance occurs in shorter life spans now.

The key thing that we shouldn’t forget is that once powerful organisations can fall quickly. They seem infallible, untouchable. But the two things we ought remember are that companies like Ford once had a Google-like air about them and in a digital world the barriers to entry and dissemination of change are lower than ever.

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When innovation is not really innovation

Posted in entrepreneurship by Steve Sammartino on May 6, 2014

Innovation is an interesting word which gets thrown around lot in organisations. No one seems to disagree that it is the life blood of long term organisational survival, but I think it’s clear that the definition of what it actually is happens to be wrong. The definition tends to be most wrong in large stable industrial companies. I should know, once upon a time I was the ‘head of innovation’ in one such large organisation. I was recently pointed to this article which goes a fair way to demystifying innovation, versus novelty and invention. But for me it doesn’t go far enough. I think the problem with innovation in many large companies is this:

They confuse Asset Utilisation with Innovation.

A colleague of mine works in a large industrial concern heading up the product innovation area. Here’s a bunch of constraints they’ve placed upon him:

- All innovations must be able to manufactured in their existing factory.

- All innovations must use the existing machines in the existing factories.

- All innovations must focus on the existing core users of the brand.

- All innovations need to be able sold in the existing sales channels and retailers.

- All innovations should have a price point in and around the existing price points their range of products are already sold for.

- All innovations have exactly 13 weeks to prove themselves in market, because that’s what the reseller demands.

Clearly constraints like this prove that the core task is not at all about innovation and much more about business management within a set set of structured parameters. In simple terms it’s an asset utilisation program. There’s nothing wrong with asset utilisation. It’s a valid, profit centric, strategic imperative. It’s what companies must and should do to reach their financial potential. What’s foolish though, is confusing it with innovation. Such confusion can only lead to a long term displacement of brand relevance.

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I’m making some terrible mistakes right now

Posted in entrepreneurship by Steve Sammartino on May 1, 2014

The problem is that I’m not exactly sure what they are. The passing of time is the only thing that will actually reveal them to me. As much I want to avoid making mistakes, I know I’m doing some things right now which will just look silly or uninformed once I look back at them. Last night I was looking back at my life in 5 year increments thinking about the things I’ve done, some of the projects I’ve undertaken and how I would have done things differently in hind sight I look back to what I thought was right 5 years ago, and it seems glaringly obvious what the mistakes are. The interesting part is that it is not a one off. It seems to be true again and again – as every period of time elapses, there in the past lies a set of errors. It’s not like I am graduating from mistake making either – granted, they are not the same mistakes, but the process of making them is yet to desert me.

My history is a constant reminder of the truth. Like everyone, at least I assume, I have clear strategic and tactical vulnerability. I used to worry about it, but now I realise if what I did then, didn’t seem stupid now, then personal growth would not have been possible.

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Counter intuition, deal cutting and commissions

Posted in entrepreneurship by Steve Sammartino on April 22, 2014

I really like sharing my ideas with groups of people – so much so that I often get up on stage in front of large groups of people to to do this. After doing it for the best part of 10 years (usually in local startup events & for friend who work at large corporates) I started to get offered money to speak at events. Which is quite exciting. It’s a classic example of the wood chips generating a significant revenue stream on their own.  I’ve recently starting working with an agency to help me manage my speaking engagements. Again, these guys came to me through others who recommended me as a potential source of revenue to them – apparently I give good voice.

When we talked about how the agency thing works for their speakers the issue of commission came up. Surprisingly I was advised that I could pick my preferred commission to give to them. I could chose to give the agency a lower percentage commission if I wanted. I could give a commission of 10, 20 or 30 percent. I chose 30 percent. My dad once told me the easiest way to make money is to help other people do the same. To create a deal where there is enough in it for the other guy that they go to work for you. So I took his advice.

The principal of the agency then told me it was a good decision and that most people take more and but end up with less.

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