Topics in Technology and Marketing The Flat World

Intro from the man himself ● Thomas L. Friedman – author of “The World is Flat” ● Coined the phrase “Flat World” to describe the global convergence of technology, society, and economics.

The World Is Flat…tiny, too ● “Flat” refers to the reduction/elimination of: ● Global economic friction ● Historical competitive advantages/disadvantages ● Resource wealth/poverty ● “Tiny” refers to the immediacy of global: ● Communications ● Transportation ● Logistics ● Barriers are lowered. Distance is abolished ● Combination of technology and capitalism / democracy have enabled: ● Integration on a global scale ● Collaboration on a global scale ● Competition on a global scale

Waves of Globalization ● Globalization 1.0 ● ● Led by countries ● Globalization 2.0 ● ● Led by companies ● Globalization 3.0 ● 2000-present ● Led by individuals

“We live in exponential times” ● ●

How Did We Get Here?

The Bubble Inflates ● Critical mass of desktop PCs ● Windows 3.1 launches in 1990 ● Media digitalization goes ballistic ● Netscape web browser introduced in 1994 ● Investment in global bandwidth ● Global fiber-optic cable for network backbone ● DSL (digital subscriber line) for homes ● Explosion in internet applications ● Google, Yahoo! ● AOL/CompuServe ● eBay

Netscape makes a killing ● … after 16 months in business ● 1994 Y/E results ● Net revenue = $0.7MM ● Net loss = $8.5MM ● 5MM shares IPO ● Priced at $28 ● Day 1 peak at $75 ● Day 1 market cap = $375MM ● Day 1 profits for insiders = $300MM

Partying like it's 1999 ● VC funding and IPOs for anything dot-com ● Adding an “e-” or “.com” to business name could be worth billions to market cap ● The New Economy ● Internet good, bricks-and-mortar bad

The Need for Speed ● The new economy runs on bandwidth ● Never-ending virtuous cycle – like adding lanes to a highway ● More traffic requires more bandwidth ● More bandwidth allows more interactivity – Faster downloads – Higher graphic intensity – Increasingly sophisticated capabilities ● More interactivity results in more traffic ● More traffic requires more bandwidth ● Bandwidth usage doubling every 3 months ● $1 TRILLION in 5 years invested in fiber-optic backbone

March 2000: The Party Ends ● NASDAQ market tanks ● VC funding dries up ● Market valuations shrivel ● 50%-80% of dot-coms don't make it March 10, 2000: 5, (intra-day peak 5,132.52) October 9, 2002: 1, % decline

Problem: How Do You Collaborate Globally?

Open Source (Part 1) ● Open Source allows: ● Any network to communicate with any other network ● Any computer to communicate with any other computer ● Any software platform to communicate with any other software platform ● Anyone to communicate with anyone else

Problem: How Do You Compete For Free?

Open Source (Part 2) ProprietaryOpen Source Server Operating SystemMS Windows Server = $600Apache = $0 PC Operating SystemMS Windows = $120Linux = $0 Productivity SuiteMS Office = $500Open Office = $0 Google Docs = $0 Photo EditingAdobe Photoshop = $189Gimp = $0 Webpage designAdobe Dreamweaver = $300NVU = $0 ● Open Source means free

Problem: How Do You Communicate Globally? For Free?

The Era of Dark Cable ● Dot-com crash results in enormous network overcapacity ● Investment based on pre-crash traffic projections ● Post-crash traffic grows more slowly ● Supply outstrips demand ● Network usage costs plummet ● Continual growth in traffic over existing fiber-optic cables absorbed through improvements in transmission hardware ● Supply continues to outstrips demand ● The result: ● A planet wired for Internet ● A network that costs nothing to use

Problem: How Do You Make Payments Around The World?

PayPal: A Global Currency For Individuals ● Confinity ● Founded December 1998 ● Online December 1999 ● X.com ● Founded March 1999 ● Online December 1999 ● PayPal – Confinity/X.com merger in March 2000 ● April 2000 – 1MM eBay auctions ● October Purchased by eBay for $1.5B

What Does All This Mean To You? ● Open standards means anyone can work with anyone else in the world ● Free tools means that everyone has access to the software/platforms needed to compete ● Free content distribution means that anyone who creates content has a global audience ● Free communication means that anyone can communicate with anyone else in the world ● A common currency means that anyone can conduct business with anyone else in the world

What Does All This Mean To You? ● Collaboration on a GLOBAL scale ● Ridiculously easy to find opportunities to collaborate anywhere in the world – As easy to collaborate across the globe as it is to collaborate across town ● The talent pool is phenomenal – Some of the most gifted people in the world ● There is literally nothing stopping you from realizing your dreams and bringing your ideas to life

What Does All This Mean To You? ● Competition on a GLOBAL scale ● Ridiculously easy for you to find opportunities to compete anywhere in the world – As easy to compete across the globe as it is to compete across town

What Does All This Mean To You? ● Competition on a GLOBAL scale ● Ridiculously easy for anyone in the world to find opportunities to compete against you – As easy to compete across the globe as it is to compete across town ● The talent pool is phenomenal – Some of the most gifted people in the world ● 5 Guys Named Rajiv/Sergei/Wei/João – Have a good business idea? They are already working on it ● What can be done, will be done – Question is: will you be the one to do it?

You Have No Inherent Advantages ● No longer a default advantage to: ● Being American ● Coming from a wealthy family ● Earning a college degree – even from a top university ● Having a solid work ethic ● You’re actually at a disadvantage ● Expectation that the above are still default advantages

3 Ways To Survive ● Be special ● Kobe Bryant ● JK Rowling ● Angelina Jolie ● Be specialized ● Highly skilled ● Highly trained ● Highly unique ● Be localized ● Provide services that can only be delivered locally

IP Is Your Only Real Hope ● IP = intellectual property ● Your ideas and their creative application ● Seek opportunities to maximize your IP where minimized for others ● What can you do better than others? ● What can you do more special than others? ● What is the highest value you can provide?

Don’t Be Pasta. Be The Sauce. ● Pasta is: ● Bland ● Generic ● Simple ● Anonymous ● Sauce is: ● Savory ● Unique ● Complex ● Provides an identity

Remember ● What CAN be done, WILL be done ● The only questions is: ● Will you be doing it? ● Or will others be doing it to you?

Questions?