Investing in Car 1.0 on the eve of Car 2.0
The new Tom Friedman article is essential for its analysis of the coming shift in business models. Like every other human with a functioning brain stem, the Detroit Bailout stinks to Friedman:
…America’s bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.
And I did not know this about gas mileage 100 years ago:
Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage - 25 miles per gallon - than many Ford, GM and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done.
And it will happen to more than just this industry.
The future of intellectual property: “Game over for protection”
As a creator of content, you wonder how you are going to get paid if you can’t control the rights to your output.
Gerd Leonhard is likely the world’s top “music futurist,” a job title that appeals to me in many, many ways. He says that control is overrated.
That, my friends, as the banks melt and industries scatter about as if you dropped a box of ball bearings from ten feet up, is the theme of the year.
Check out Gerd’s keynote for more thought provoking insight:
Business Week: The long-term future is the last refuge of a wrecked economy
For sometime I have been saying that we’re on the cusp of a wave of interest in the long-term future that is not driven by economic bubble or apocalypse per se. The normal cycle is that people are interested in the future when we’re inventing new technologies and profiting, or when we think we’re going to nuke each other. This time, perhaps for the first time, we’ve got a mix of both: technologies will likely be influential, the economy’s a mess, the world is largely peaceful, the climate is changing, etc. People are finally interested in the future not as a gimmick, but as the only way to wise management of public institutions.
Pretty cool.
The most recent edition of Business Week has a great example of this emerging mindset. Michael Porter, the intellectual godfather of competitive analysis, has written an article that is desperately needed today: “Why America Needs an Economic Strategy.”
You should read this in its entirety, but to sum up, Porter says that America has a lot of valuable assets, and no plan whatsoever for long-term prosperity. The United States has a great science and technology engine, the best technology transfer in the world, and a still-vibrant culture of entrepreneurialism. However, we are hobbled by our lacking social net, a mess of a public health system, decaying infrastructure, and creeping neo-mercantilism in the form of giant corporations that distort markets. The only way out is to think long-term, from small businesses up to national policy makers.
We couldn’t agree more! Too bad the economy had to be smashed into flints before we could notice it, but better late than never.
Future brightspots will result from this mess
Here at Competitive Futures we regularly tell clients, “Just because something is a disaster doesn’t mean it will be a disaster for everyone.” History is filled with stories of leaders who perceived danger early, acted appropriately, and profited.
I’m a bit fatigued of straining about this financial mess, and naturally began to ask, “OK, what’s going to be 
positive out of this?” Despite the ugliness here, there will likely be many positive developments resulting from this crisis of business and governance. One example is quite close to home for me.
My father is in his 28th year running the Rutland Agway, a store dedicated to farm, home, and garden in Central Vermont. Recent economic trends have sent both farming and manufacturing to far-flung states or countries. Giant retailers like Home Depot came to take a piece of the diminishing supply of disposable income in the state. For local stores, things got pretty tight for a moment.
Fleeing jobs and rocketing fuel oil prices are putting a massive financial strain on rural households. How are they responding? By going local - planting gardens like never before. Staying at home, avoiding pricey vacations - and sprucing up the backyard with fertilizer and lawn mowers. And suddenly, times are better in the home and garden business. (On top of it, Vermonters are back to eating their own delicious local foods!)
What else could be positive about this? Think it through - there will plenty of time to think about disaster soon enough.
Want to find the next Starbucks? They could be bankrupt failures today!
There’s the book gaining more and more attention 
called Discovering the Next Starbucks,
which is about picking great companies ahead of the curve.
Just a reminder — the hot company is tomorrow could possibly be a dismal failure today.
Disney failed at the amusement park business three times before prevailing. The same number of failures as Pepsi. And so on. You’ve probably heard the list of Lincoln’s failures and Edison’s 1800 useless designs for the lightbulb. I’ll spare you.
In America, we worship entrepreneurial success, but are often more cool about the entrepreneurial failures that undoubtedly precede them.
The fantastically successful entrepreneur of tomorrow is probably drunk in a bar right now, sweating his unpaid mortgage and lamenting his past strategic decisions.
Failure is not a guarantee of future success, though it’s almost always one of the points along the way.
-Garland
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