Great innovations are often launched on modest budgets, writes Tim Longhurst, a trend spotter and futurist, and founder of strategy consultancy, Key Message.
For small business owners setting up in business with the expectation that this will be their career for the next few decades, think again. Your new venture may last only two years.
You talked at the Icehouse Network Event about business models shrinking, with companies like photo sharing company Instagram selling for $1 billion in just a couple of years.
The world is changing so fast that it isn't safe to start a business today and assume that it will be around in 10 years' time. Most products, services and industries are being redefined so rapidly that business owners should ask themselves: "How quickly can this business be profitable and ready to flip?" Whether or not their businesses do actually have a limited shelf life, that approach will keep business owners on their toes, watching how the world is changing, and looking for opportunities. For the first time in history, anyone can start an online business and have instant access to hundreds of millions of customers. It is definitely time to shift our "It's going to be around forever," mindset.
Tell us about the "power of small". What can New Zealand businesses learn from this?
Lots of people think that they need a million-dollar budget to innovate. This is a myth that holds people back. Million-dollar budgets are few and far between so if you wait for a million- dollar budget, you may end up waiting forever, never acting on your ideas. And the truth is that all of the great innovations, products and services that we are seeing now were started by people with modest budgets. Try answering the question: "What would you do if you only had $10?" And you are forced to think about the best use of resources. Even Apple, the world's largest corporation, with US$100 billion ($122 billion) in cash, started in a garage.
You have talked about "the edge" and developing ideas from "the edge". Who are the people at "the edge" in small businesses?
People at the edge of organisations take an active interest in the world and how it's changing and see the business not just as it is but how it could be. They are the people you want to encourage and tap into because if you give them a bit of space, a bit of credit, a bit of time, and ask for their ideas and perspectives, then they can be your filters. They can filter the way that the world is changing and distil the key trends or insights for you. I always encourage CEOs to listen to their ideas because they are paying attention to what's happening out there and what needs to change in here.
What trends are there in social entrepreneurism. Can social entrepreneurs make money from this in the long run?
Social entrepreneurs pursue an idea or a business model that meets a social need. Some decide to also make a profit, some don't. Some choose to only charge what they know will cover costs, others invest profits in the community. There are all sorts of business models. It is definitely legitimate to work towards a profit, though, and that is a trend. Social entrepreneurs tend to be people with the drive, the energy, the entrepreneurial skill and talent who are just not excited about capitalism alone. They want to leave the world a better place and they are prepared to dedicate their time, their talent and their abilities to that end.