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Technology and Marketing

The Flat World

Intro from the man himself● Thomas L. Friedman – author of “The World is Flat”

● Coined the phrase “Flat World” to describe the global convergence of technology, society, and economics.

http://mitworld.mit.edu/video/519

The World Is Flat…tiny, too● “Flat” refers to the reduction/elimination of:

● Global economic friction● Historical competitive advantages/disadvantages● Resource wealth/poverty

● “Tiny” refers to the immediacy of global:● Communications● Transportation● Logistics

● Barriers are lowered. Distance is abolished● Combination of technology and capitalism / democracy have enabled:

● Integration on a global scale● Collaboration on a global scale● Competition on a global scale

Waves of Globalization

● Globalization 1.0● 1492-1800● Led by countries

● Globalization 2.0● 1800-2000● Led by companies

● Globalization 3.0● 2000-present● Led by individuals

“We live in exponential times”

● http://www.youtube.com/watch?v=16tgJFW1o7o● http://www.youtube.com/watch?v=6ILQrUrEWe8

How Did We Get Here?

The Bubble Inflates

● Critical mass of desktop PCs● Windows 3.1 launches in 1990● Media digitalization goes ballistic● Netscape web browser introduced in 1994

● Investment in global bandwidth● Global fiber-optic cable for network

backbone● DSL (digital subscriber line) for homes

● Explosion in internet applications● Google, Yahoo!● AOL/CompuServe● eBay

Netscape makes a killing● … after 16 months in business● 1994 Y/E results

● Net revenue = $0.7MM● Net loss = $8.5MM

● 5MM shares IPO● Priced at $28● Day 1 peak at $75● Day 1 market cap = $375MM

● Day 1 profits for insiders = $300MM

http://www.neominds.com.mx/boletin-de-prensa-optimizacion-web/05-06-28-netscape-case-study-1995.html

Partying like it's 1999

● VC funding and IPOs for anything dot-com● Adding an “e-” or “.com” to business name could be

worth billions to market cap● The New Economy

● Internet good, bricks-and-mortar bad

The Need for Speed● The new economy runs on bandwidth

● Never-ending virtuous cycle – like adding lanes to a highway

● More traffic requires more bandwidth

● More bandwidth allows more interactivity

– Faster downloads

– Higher graphic intensity

– Increasingly sophisticated capabilities

● More interactivity results in more traffic

● More traffic requires more bandwidth

● Bandwidth usage doubling every 3 months● $1 TRILLION in 5 years invested in fiber-optic

backbone

March 2000: The Party Ends

● NASDAQ market tanks

● VC funding dries up

● Market valuations shrivel

● 50%-80% of dot-coms don't make it

March 10, 2000: 5,048.62 (intra-day peak 5,132.52)

October 9, 2002: 1,114.11

78% decline

Problem: How Do You Collaborate Globally?

Open Source (Part 1)

● Open Source allows:● Any network to communicate with any other network

● Any computer to communicate with any other computer

● Any software platform to communicate with any other software platform

● Anyone to communicate with anyone else

Problem: How Do You Compete For Free?

Open Source (Part 2)

Proprietary Open Source

Server Operating System

MS Windows Server = $600 Apache = $0

PC Operating System MS Windows = $120 Linux = $0

Productivity Suite MS Office = $500 Open Office = $0Google Docs = $0

Photo Editing Adobe Photoshop = $189 Gimp = $0

Webpage design Adobe Dreamweaver = $300 NVU = $0

● Open Source means free

Problem: How Do You Communicate Globally?

For Free?

The Era of Dark Cable● Dot-com crash results in enormous network overcapacity

● Investment based on pre-crash traffic projections

● Post-crash traffic grows more slowly

● Supply outstrips demand● Network usage costs plummet

● Continual growth in traffic over existing fiber-optic cables absorbed through improvements in transmission hardware

● Supply continues to outstrips demand

● The result: ● A planet wired for Internet

● A network that costs nothing to use

Problem: How Do You Make Payments Around

The World?

PayPal: A Global Currency For Individuals

● Confinity● Founded December 1998

● Online December 1999

● X.com● Founded March 1999

● Online December 1999

● PayPal – Confinity/X.com merger in March 2000● April 2000 – 1MM eBay auctions

● October 2002 - Purchased by eBay for $1.5B

What Does All This Mean To You?

● Open standards means anyone can work with anyone else in the world

● Free tools means that everyone has access to the software/platforms needed to compete

● Free content distribution means that anyone who creates content has a global audience

● Free communication means that anyone can communicate with anyone else in the world

● A common currency means that anyone can conduct business with anyone else in the world

What Does All This Mean To You?

● Collaboration on a GLOBAL scale● Ridiculously easy to find opportunities to collaborate

anywhere in the world

– As easy to collaborate across the globe as it is to collaborate across town

● The talent pool is phenomenal

– Some of the most gifted people in the world

● There is literally nothing stopping you from realizing your dreams and bringing your ideas to life

What Does All This Mean To You?● Competition on a GLOBAL scale

● Ridiculously easy for you to find opportunities to compete anywhere in the world

– As easy to compete across the globe as it is to compete across town

What Does All This Mean To You?● Competition on a GLOBAL scale

● Ridiculously easy for anyone in the world to find opportunities to compete against you

– As easy to compete across the globe as it is to compete across town

● The talent pool is phenomenal

– Some of the most gifted people in the world

● 5 Guys Named Rajiv/Sergei/Wei/João

– Have a good business idea? They are already working on it

● What can be done, will be done– Question is: will you be the one to do it?

You Have No Inherent Advantages

● No longer a default advantage to:● Being American

● Coming from a wealthy family

● Earning a college degree – even from a top university

● Having a solid work ethic

● You’re actually at a disadvantage ● Expectation that the above are still default

advantages

3 Ways To Survive

● Be special● Kobe Bryant

● JK Rowling

● Angelina Jolie

● Be specialized● Highly skilled

● Highly trained

● Highly unique

● Be localized● Provide services that can only be delivered locally

IP Is Your Only Real Hope

● IP = intellectual property● Your ideas and their creative application

● Seek opportunities to maximize your IP where minimized for others

● What can you do better than others?

● What can you do more special than others?

● What is the highest value you can provide?

Don’t Be Pasta. Be The Sauce.

● Pasta is:● Bland

● Generic

● Simple

● Anonymous

● Sauce is:● Savory

● Unique

● Complex

● Provides an identity

Remember

● What CAN be done, WILL be done

● The only questions is:● Will you be doing it?

● Or will others be doing it to you?

Questions?