Bottom Up Era
By Homebrew venture capital:
“Opportunity is created by several catalysts driving a Bottom Up Economy:”
Supercomputer in Our Hands: For the 2.5 billion people already online, smartphones, tablets and other increasingly inexpensive internet-connected devices have been magical, but for the remaining billions getting online for the first time via these devices, they will be transformative. As inventor Ray Kurzweil has said, “a kid in Africa has access to more information than the president of the United States did 15 years ago.” Our bet is that the kid in Africa will use that information to become an entrepreneur…and we hope she looks us up.
Trickle Down Technology: Enterprise technology used to be expensive to buy, complex to customize and frustrating to maintain. It was clunky and ugly compared to consumer tech. Now APIs, cloud services and app platforms provide the opportunity for businesses large and small to benefit from unprecedented efficiencies and intelligence. For example, imagine a small, local business in Kansas City making beautiful glass lamps. It can virtualize payroll, accounting and employee benefits with SaaS applications. Production can be scaled via crowdfunding, as opposed to a small business loan. The company can build a storefront on the web for less than the price of a few square feet of retail space on 5th Avenue. It can use cloud-based customer relationship management tools and social media platforms to effectively manage its community. A single employee can create and distribute online videos to a billion people without buying TV spots. Technology lets a team of 10 hit the market with 100 times more force than just a few years ago.
The Business of One: The work covenant used to look like this: you work for a company or the public sector at a fair wage and spend 20+ years with a single employer. Even if you lost a job, there would be another available; not always with higher wages, but at least with a living wage. Today, the efficiencies gained from technology and the growth of a global workforce mean that many jobs continue to disappear, especially outside of the most skilled labor.
Alongside opportunity, real necessity is a powerful driver of a Bottom Up Economy. Economies driven by technology and knowledge have different employment footprints than the world’s industrial past. Wealth aggregates with a minority of the population and many get squeezed out of the middle class. What’s left are service economy positions and jobs that are under salary pressure due to technical efficiency and global labor markets. Following the recent recession, low wage jobs are returning; middle wage jobs are not. A recent survey of Americans revealed 59% of middle class families are concerned about dropping out of their “current economic class over the next few years.”
The path back to personal economic stability? It’s no longer a career in middle-management and a pension. We’d argue it’s entrepreneurial activity. Being able to enter the marketplace not as part of a large corporation but as an individual, team or emerging enterprise. Building small businesses or offering talent, time, creations or assets directly to customers with little friction. Not a single wage, but many wages. Supplementing or creating entirely new income streams.
An engineer or designer gets project work by offering his skills via vertical marketplaces. An entertainer sells music, tickets and merchandise directly to her fans online. An underutilized car or apartment gets turned into cash via peer rentals. Some participants enjoy the community aspect and a little extra spending money. Others find a path to self-employment and financial freedom. And a few even become employers themselves. A Bottom Up Economy is a self-starter economy, driven by a workforce that is being pushed toward innovation.” (http://homebrewvc.tumblr.com/)