“Big Data” and the Entrepreneur

First, a few estimates (not mine):

  • 45% of the world’s population is now online
  • One third of the world’s information is stored in alphanumeric text and still image data,
  • The estimated telecoms capacity to exchange data in 2014 was 667 Exabyte (1 Exabyte = 1 billion gigabytes)

Are we surprised that “big data” is a hot and growing topic? It takes me back to my time at M.I.T. Sloan and Jay Forrester. Jay was one of the first professors at Sloan (1956) and we studied his System Dynamics.

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Organizational costs: old vs. new

Corporate organizations that predate the Internet were built based upon a military or “span of control” model. While it evolved over thousands of years from Roman times, there have been limited changes, even with the introduction of telecommunications and computers. The foundation was that a manager/leader could directly manage a specific number of direct reports. This was due to the need to gather information, understand the bigger picture, and provide leadership to the team. From the Army website, here is the traditional Army organization.


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Small business opportunity

The Internet has revolutionized the information that is available to businesses and the speed with which it is available.   This has created both an opportunity and a challenge.  The opportunity is that an established company has ways to expand, grow, and leverage its experience and current business base with lower cost and less investment.  The challenge is that the Internet has opened businesses to new competition that does not need offices, sales representatives, or inventory.

An existing business has two choices:

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Small Business Challenges

In the book, Digital Siege, I write about the assault on traditional corporations by young, Internet based businesses that have created new business models.  It is easy to see the sales that Amazon has taken from Borders, CompUSA, Tower Records, and others.  It is less obvious to see the impact that new entrants are having on small, local businesses.

There are multitudes of small businesses that are struggling to deal with the changes impacting their business due to the Internet.  I would classify these businesses into three groups:

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Entrepreneurs vs. Innovation

There are many books written about innovation and guides to help entrepreneurs, but what is the difference?  Does one need to be innovative to be an entrepreneur or have entrepreneurial talent to be innovative?

One of the most entrepreneurial corporations historically has been Citibank, particularly in the international field.  Citi had offices in far flung Buenos Aires and Shanghai before there were telephones or air travel.  The local manager had to be entrepreneurial.  I was Citi’s country executive in Sweden, Ireland, and Singapore in the 1980s and it was still that way.  We had an expression that “sometimes its easier to ask forgiveness later for a decision than to get approval before.”

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Trains, planes, and mainframes

Railroads and trains are a special part of U.S. history.  I remember visiting Drew Lewis, CEO of Union Pacific in 1992 when their headquarters was in Bethlehem, PA.  The hallways were adorned with historic paintings and the atmosphere of adventure and exploration was intoxicating.  Railroaders have their own lingo, some of which we still use to this day.  For example “deadbeat”.  Webster’s says “one who persistently fails to pay his debts or way.”  It originated over 100 years ago when railroad workers noticed that loaded cars passing over rail joints made a different sound than empty cars.  The empty ones made a “dead beat” and were seen to not be paying their way.

For passenger transportation in the U.S.,  railroads had their time between the years when significant rails were laid and the advent of the Interstate Highway system and commercial flights.  Even with Carl Grey’s introduction of the Streamliner in 1935, the passenger train dwindled in importance with the exception of commuter loads and the Northeast corridor.

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