As technology continues to develop
and improve at a dizzying pace, it
has made going into business a more attainable goal for entrepreneurs all
over the globe. Web 2.0 and 3G are just a
couple of examples of the technology that
exists today that helps keep the world
connected.
“I use Web 2.0 as a way to think about
what is happening in business today,” says
Alex DeNoble, professor of management
and entrepreneurship at San Diego State
University. “I think this is an extremely
exciting time to be an entrepreneur.”
Smart Business talked to DeNoble
about the kinds of technology that have
helped improve business opportunities
the most.
Why is this such a good time to be an entrepreneur?
When I think about all of the people
starting companies today, I think about
the tools they have at their disposal and
how significantly different they are from
the ones entrepreneurs had even five
years ago. A lot of that I attribute to Web
2.0. The Internet has become woven into
the fabric of our lives, whereas in the late
’90s, and even into early 2000, people
were still trying to figure out how to best
use the Internet. Today, Web 2.0 allows the
user so many options, and its technology
has opened up social networking.
Why is social networking so important?
I think of social networking from the
perspective of defined audiences that
share common interests. What does that
mean for an entrepreneur? It means that
you have direct access to the people interested in what you’re selling. When you’ve
got product and services to sell, you now
have direct access to a defined audience
as a market.
You can also project a global image,
which means you can do business internationally much more easily as a small
business than you could before. Web 2.0
enables the smaller player to be on equal footing with the larger, more established
companies, making the world a flatter
place.
Where else can Web 2.0 make a difference?
Think about supply chains. A company
today can more tightly integrate with suppliers from around the world. Think
about your company. You have target
market customers, and you have sources
of supply that you need to establish.
Given the enhanced communication
skills associated with Web 2.0, you have
the tools to project a global image on the
market side and to identify and work with
a whole host of global suppliers on the
supply side.
What about wireless communications?
I just heard someone talking the other
day about 3G technology, which is third
generation wireless communications.
Think about it in terms of application.
Think about all of the things you can do
these days with your cell phone that you couldn’t do five years ago. 3G enables
data and much more content to be pushed
through to your mobile device, which
gives entrepreneurs significant new capabilities in terms of flexibility and being
able to adapt to customers’ needs on the
fly. Two clients could be halfway around
the world from each other and would still
have instant access to each other. Not bad
for a device originally designed to just
transmit voices.
Does it matter anymore where a company is
headquartered?
It could be anywhere. The downside of it
all is that you will have competition from
all over the world, which obviously means
that the level of competitiveness is going
to dramatically increase. But, with the
technology, you can be anywhere and
present the image of being able to provide
a host of products and services.
One of the examples in Thomas
Friedman’s ‘The World is Flat’ was about
tutors in India. Say my child is having
trouble with mathematics. I can go online
and find a math expert in India who can
tutor my child for a fraction of what it
would cost here.
What is The Long Tail theory?
Chris Anderson wrote a book called
‘The Long Tail’ that takes a standard bell
curve and looks at where certain companies go to find business. Look at the big
bump to the right of the mean line. That’s
where traditional businesses go after well-defined, large markets because they are
able to standardize the market. The more
you can define a market, the more you
can gain economic benefits of scale.
Now, look at the tail to the right. It is infinite and never touches the horizontal line.
New technology allows new entrepreneurs to go after those smaller markets
that wouldn’t make sense for larger companies to pursue.
ALEX DENOBLE is professor of management and entrepreneurship at San Diego State University. Reach him at
[email protected] or (619) 594-4890.