Joe Biden’s In. Understanding Capitalism. Customers Doing More.
Today: Biden’s taking power. Whether America will revert to its historical position as a technological laggard. Revisiting Braudel (again!). Customers creating value.
The Agenda 👇
America falling behind in terms of technology
The growing gap between capitalism and mercantilism
Customers are more than a collection of wallets
The first editions of The Family’s newsletter for entrepreneurs
🚶Will Joe Biden Change America’s Trajectory As a Technological Laggard?
The decades since World War II have created a sense for most of us that the US is naturally a technological leader. And rightly so: that period encapsulates virtually all of our lives, and thus it’s really all we know from personal experience. But for much of its history, the US wasn’t particularly technologically advanced, in no small part because it had certain resources that discouraged innovation: cheap, abundant land, food and power meant that it was easier to simply expand rather than making the most out of a smaller portion of those resources.
Still, the idea that the US will go back to that state of affairs, letting others race ahead in terms of technology, is a hard one for us to accept. Yet with its government investing less in both basic research and end products and a dwindling, less powerful middle class, it’s hard to see where the impetus for tech advances in the US will come from.
Of course, there is a changing of the guard at hand, and we’ll have to wait to see how Joe Biden and his administration will approach technology companies, both at home and abroad. It’s certain that his will be a steadier guiding hand than that of Trump (anybody remember the TikTok story?), and there are some signals that he could bring Western countries together in a push for technological progress.
👉 I delved into barriers in America As a Technological Laggard and possibilities for how Joe Biden’s administration could affect European startups for Sifted in What Biden Means for European Startups.
🏦 Accounting for Capitalism and Why Local Businesses Can Thrive in the Entrepreneurial Age
One of the most important distinctions for understanding business in the Entrepreneurial Age is, I believe, found in Fernand Braudel’s partition of the “market economy” vs. “capitalism”. The growing gap between the two is at the heart of many anxieties and problems that are seen in countries around the world, as greater percentages of created wealth accrue to the few who are practicing capitalism, all under the weary eyes of the many stuck in mercantilism.
Creating new social safety nets to bridge that gap is thus a glaring need, and all the more so in a world where more and more people can be effective, impressive entrepreneurs solving big problems. This new generation of entrepreneurs are also moving into industries where much of the value they create can be captured locally: healthcare, agriculture, mobility, as opposed to content, advertising, online retail.
COVID-19 is, as we now know, serving as an accelerant to all of this. Its negative effects are being felt most harshly by those who were already suffering; software is rapidly entering industries that long resisted change, simply because there’s no other choice in a world with drastically reduced social interactions; and previous solutions such as immigration policy can’t work in a world without travel.
👉 I pulled on these (and other) strings in Accounting for Capitalism and Why Local Businesses Can Thrive in the Entrepreneurial Age
🏋️ Your Customers Are More Than Their Collective Purchasing Power
Any business that grew up during the 20th century is confronting a changed paradigm: whereas their customers used to simply be wallets consuming their products, they’re now in a situation where customers take an active (and ideally, value-adding) role in the business itself.
As such, executives have to reorient their thinking in a way that fully integrates customers and their labor (whether that comes in the form of recommendations, platform users, data, etc.) within their business model. This is a difficult transition for companies that were constructed as pipes rather than platforms.
Difficult though it may be, it is absolutely necessary, because in today’s world any company that fails to utilize their customers in ways that add value will lose out to the other companies coming along who are able to do precisely that. It’s relatively simple to look at the most valuable companies in the world and see that the one uniting thread is their new, technologically-driven, mutually beneficial relationships with their customers.
👉 Go further in Your Customers Are More Than Their Collective Purchasing Power.
Sounds interesting? Subscribe to European Straits and let me know what you think!
📝 As I mentioned last week, alongside my fellow directors at The Family we’re counting down to our 6-week startup batch starting in January with a daily newsletter of startup lessons we’ve learned over the past 7+ years.
So far, you can read about:
There’s hope for investors’ behavior (Oussama)
It’s OK to shut down. (Mathias)
How to take advice (Balthazar)
And my next edition will be coming later today! You can keep up with it all (and subscribe) at The Family Substack.
⚠️ I also contributed to this white paper on early-stage funding aimed at helping aspiring and first-time founders. Many thanks to Brian Ellerman for bringing it all together in an effort showing how, even in the USA, startups aren’t only a Silicon Valley thing.
From Kamala Harris and the Future of Silicon Valley (August 2020):
Kamala Harris is someone who understands the tech industry’s worldview and knows its people on a personal (even if distant) level. She already won several statewide races in California. She’s related to many personalities in the tech industry: her brother-in-law Tony West is Chief Legal Officer for Uber, her niece Meena Harris used to work at Facebook, Slack, and Uber, and I’d guess she has many friends in the industry—which can make a huge difference in terms of not doing stupid things when you’re a high-level official considering the US tech industry.
All recent editions:
America As a Technological Laggard—for subscribers only.
Why Local Businesses Can Thrive in the Entrepreneurial Age—for subscribers only.
Your Customers Are More Than Their Collective Purchasing Power—for subscribers only.
Accounting for Capitalism—for subscribers only.
The Billionaire Raj w/ James Crabtree. A Long Week in the USA. Jack Ma and the CCP. Protectionism Back in Style.—for everyone.
A Reading List on America—for subscribers only.
What Becomes of America (and the World)—for subscribers only.
Jack Ma’s Future—for subscribers only.
You’re The Protectionist!—for subscribers only.
The Gig Economy. IPOs in Europe. Silicon Valley Politics. Countries Are Different.—for everyone.
European Straits is a 5-email-a-week product, and all essays are subscriber-only (with rare exceptions). Join us!
From Munich, Germany 🇩🇪
Nicolas
