I have come to believe that how, in the past, large corporations were needed to overcome the costs of retaining talent, overcome the complexities of a logistics infrastructure to bring together raw materials and get to market finished products – today those all problems have been solved by the divide and conquer strategy.
It is no more a problem for a bright person with an idea and some seed funding to get his idea tested, validated, and produced in small quantities. And then, it can be marketed (over mail, think bulk-mail fulfillment, over the internet, think google and viral marketing and specific-online-forums), packaged (think fulfillment companies), supplied (at one end are the likes of DHL, Fedex and UPS and at the other end are closer-to-home franchising models that can soon become the mom and pop franchise stores that can act as a collection point and distribution center for their own localities).
I think the next 10 to 25 years will see the larger corporations move back into their role of designing products that required mass production … in the 1900’s it was iron & steel, shipping, cars. In the 2000’s it will be entertainment devices, transportation systems (imagine a light-rail train turn-key solution), food, network access.
Just as we could not imagine only small scale auto manufacturers in 1980, we cannot imagine a small local ISP supplying network connectivity … the irrelevance of the last mile problem will take care of that job opening.
Also, it is interesting to note, the new breed of small companies will follow exactly in the footsteps of the current MNCs, with a minor difference, they will be loosely integrated buddy-lists of sorts, and not a tightly integrated (common corporate culture) team.
How will this affect startups?
Isn’t every innovation-minded company going to be either a startup or a SMB?
(Not today, not Apple, not IBM)
How is this going to affect bankruptcies and financing?
Would there be a new market for penny-stock IPO’s ? Would there even be IPO’s for the companies themselves? Or would you just buy shares in industry specific or region specific hedge funds? What happens to a company that does not perform? Is the first choice still a M&A ?
A lot of How’s What’s Who’s and Why’s … I’ll enjoy watching the answers unfold in real-time!