The number of professionally run venture capital firms in Miami can be counted on one hand with fingers left over. This is one of the major reasons that Miami is a city of SMEs and few high tech startups.
A new VC has emerged in Miami, Medina Capital, organized by local Manny Medina who sold his Terremark business to Verizon for $1.4 billion. The new firm will focus on disruptive technology principally in cyber security, cloud computing, big data and storage. The focus is on early stage software companies. Typical investment is $10-20 million over the life of the investment. The firm's focus is not surprising given Medina's background in data centers.
"Design school is the future, business school is dead."
The point may be stated in the extreme, but the point to consider is the importance of design in the future of business.
I have heard Nicholas talk about design several times but my thinking on design began with some posts from Frog Design after reading Helmust Esslinger's "A Fine Line" (Esslinger founded Frog Design.) Frog helped me to see the parallels to entrepreneurship in design. I then found the Stanford Design School, which is heavily influenced by the thinking of the design firm IDEO, and began reading about their design processes. Lately I have been reading Karl Ulrich's writings on design. Ulrich is another alumni of MIT (Negroponte) who teaches a Coursera offering on design. He also advocates that design should be part of a general requirements university curriculum, like writing, calculus, etc.
All of this reading lead me to realize that design process is an excellent model for the first part of a two-part process approach to entrepreneurship, which I described in this post a few days ago. I think both Nicholas and Ulrich would agree with this concept that a formal design process is the foundation of entrepreneurship, or at least the foundation to develop the hypothesis to be tested in the market. (For the sake of completeness, let us assume that the design process is used for addressing documented large market opportunities.)
In this post, "How to Survive the End of the Industrial Age", I basically argued that the individual must control their economic destiny in the 21st century and that entrepreneurship is the best solution. Therefore, I believe that business schools, as one means to teach entrepreneurship, must change as follows:
Business school curriculum must be changed to use entrepreneurship as the principal theme of the curriculum, as opposed to the current focus on strategy, productivity and finance.
Design courses and the design process must be taught as a required course with several electives in the subject
Computer science must be taught such that every graduate has sufficient knowledge to program, understand the design of a computer or smart phone at the component level and recognize a business opportunity in big data and the technology required to commercialize it, to name a few courses to be offered
Every student needs to develop a new business with each course/semester helping the student to refine their concept and commercialize it. (Ideally the business school would provide the seed money.)
Adjunct professors with practical experience would teach a larger percentage of the courses
Many experts are considering what a school should be in the 21st century in order to foster "21st century skills" in children. 21st century skills generally are described to include:
Creativity
Critical thinking
Collaboration
Communication
Some experts add problem solving skills to the list but I personally believe it is redundant if critical thinking is developed properly.
One company that has a long history in child learning is LEGO, the Danish company. They have a long history of innovation in toys and robots to foster participatory, hands on learning (as opposed to consumptive learning). LEGO has announced that the LEGO Foundation is opening a new school, which I believe is their first school. The Isbillund International School will serve children 3-16. LEGO describes the school as follows:
"Children are open-minded, curious and innovative. They are not afraid to experiment. These abilities will be nurtured in our school to help our pupils reach their full potential. We believe that all children have the right to become the best they can be. The school is based on Danish learning traditions, the IB [international baccalaureate] programmes and the creative approach of the LEGO Group."
School activities begin at 7am with breakfast and include after school activities til 5pm.
What I like about the school:
The LEGO philosophy of hands on learning applies to all courses and not just science and robotics
The International Baccalaureate is a rigorous curriculum that is used beginning in the primary school
The school starts for 3 year olds when children are in their most formative intellectual period
If LEGO were to ask for my suggestions, I would offer three ideas:
There should be no grades; students should be able to learn a subject or area of interest at their own pace.
The concept of a school building should be re-thought; instead of using classrooms as the core concept, the building should be designed to foster communication and collaboration between students.
Use teachers as mentors or guides and rely on e-learning to provide basic instruction; of course every child would have their own connected laptop computer.
In the fall I am going to teach a new undergraduate seminar at FIU--"Entrepreneurship, Design and Thinking". In many ways this course is the result of my thinking over the last three years on entrepreneurship. An important part of my thinking on entrepreneurship is that it is a process, a deliberate set of steps, that leads to better results. I now believe that this process has two parts:
The design process, in which the customer problem is defined and a solution is developed to fill the gap caused by the problem. An excellent book on the design process is Karl Ulrich's Design: Creation of Artifacts in Society, which is used in Ulrich's Coursera design course.
The business model process, wherein the five parts of a business model are systematically analyzed and the best choices are selected. (My book, Billion Dollar Company, deals with the business model process.)
However, neither of these processes individually or together explain the difference between great new business ideas and mediocre ones. What explains the difference is the quality and type of thinking that one brings to the development of the startup. Therefore, to provide a complete methodology on entrepreneurship, I have concluded that I need to teach about thinking, the alternative approaches to problem solving and other methodologies.
Fortunately, Marvin Minsky has written a lot on the subject of thinking about complex problems. One of Minsky's books that deals with thinking is "The Emotion Machine: Commonsense Thinking, Artificial Intelligence, and the Future of the Human Mind". (Ulrich studied with Minsky at the MIT Artificial Intelligence Lab, that Minsky co-founded.) The quote from Minsky that started me thinking about thinking is a remark he made at the 25th anniversary of the MIT Media Lab.
As I more fully develop the curriculum for the seminar, I will be posting on the readings for the course. I will continue to teach my courses on entrepreneurship and social entrepreneurship.
"The ultimate ends of the activities of reasonable beings are never economic. Strictly speaking, there is no “economic motive” but only economic factors conditioning our striving for other ends. What in ordinary language is misleadingly called the “economic motive” means merely the desire for general opportunity, the desire for power to achieve unspecified ends." The Road to SerfdomF.A. Hayek
The beauty of this quote from Hayek is that it focuses on the social objective and makes the economic benefits secondary or more precisely a means to an end. This, of course, has been shown to be the pattern frequently in successful entrepreneurship at scale.
Since the 1960s and the advent of computers, productivity gains have been a major driver in the growth of business profits. However, with little new computer technology on the horizon (see this post), the benefits of computing have probably been optimized by the large corporations that drive the economy. What choices do the large corporations have to drive profitability:
Focus on reducing government regulations, which is a considerable cost of doing business; however, with the growing concern about the morality of capitalism (see this post), this strategy may not be successful.
Commit significant capital to developing markets; this strategy only works if all the major competitors follow the same strategy and products are suitable for the bottom of the pyramid (see this post).
Focus on innovation as opposed to the safer line extension strategies; large corporations have had limited success with developing innovative new products and have some difficulty in recognizing the value of their innovations (Intel divesting their "ARM" chip business might be an example.)
More corporations could become lead investors in venture capital investments, following the example of companies such as Intel and Google; acquisition of the startups could become a source of future growth as Cisco demonstrates (a list of Cisco acquisitions is here).
None of these strategies are easy to execute, although number 4 may appear comparatively easier. A focus on innovation (3) is probably the best strategy, but few companies have a culture of true innovation and even fewer executives who have the risk profile and experience to successfully manage a business built on innovation.
More likely, we will have a 1960s like period of mega-mergers to hide the slowing growth of large corporations. Everybody knows how to do acquisitions :)
The NYT Sunday Review had an article, the Secrets of Princeton, in which they criticized the university for selecting upper class students over lower class students with higher GPAs and test scores. They went on to say that such an approach helps to undermine democracy and perhaps capitalism.
Princeton was founded in 1746 and has probably been selecting students the same way for the last 267 years. Yet the U.S. has flourished in that same period both politically and economically. Princeton's admission policy appears to have little effect. The admission policies of elite Ivy League schools do not undermine the meritocracy in this country. The policies merely point out that certain people could do more to foster a meritocracy.
President Obama has been focused on short term job creation. While this has positive effects on the lives of the unemployed, it does little to correct structural problems in the system. The President should be focused on leading a national initiative to reform education for the 21st century so that people have the skills required to better manage their own economic well being. There are two powerful reasons for such an initiative:
The country badly needs a stated direction. Since the fall of communism the country has had no core focus, a set of beliefs and aspirations that unite us. The recent plague of congressional bi-partisanship is a symptom of such a lack of direction.
There will be fewer and fewer traditional jobs that were so plentiful after WWII. Outsourcing, offshoring and increasing labor productivity all point to the erosion of the traditional notion of jobs.
As Thomas Friedman so eloquently states in thisSunday Review NYT's article, there are only:
"high-wage, high-skilled job[s]".. “because knowledge is available on every Internet-connected device, what you know matters far less than what you can do with what you know. The capacity to innovate — the ability to solve problems creatively or bring new possibilities to life — and skills like critical thinking, communication and collaboration are far more important than academic knowledge".
The job opportunities that remain will require the ability to add value rather than perform rote tasks.
No less a commentator than Clayton Christensen, the HBS professor, shares Friedman's view. Christensen believes that the education system is so endangered that even the continued existence of HBS is in doubt. Christensen believes that education must become more practical to meet the requirements of the 21st century.
Another group that shares the Friedman view is Education Futures, who advocates for Knowmads. "A Knowmad is a "creative, imaginative, and innovative person who can work with almost anybody, anytime, and anywhere."
My own views match very closely with Friedman, as shown in this post from January 2012 titled "How to Survive the End of the Industrial Age". For about the last two years in my entrepreneurship classes, I have been advocating that students study entrepreneurship as much for the skills required in a jobless 21st century as for learning how to identify opportunities and build large new companies. The skills required for entrepreneurs are detailed in this post and closely match Friedman's emphasis on critical thinking, collaboration and communication. These skills can, of course, be learned at a very young age. The original research on learning by Jean Piaget demonstrated this fact.
One may wish to point out that a dramatic change to the education system does not require federal government leadership. However, the private sector appears as disinterested as the governemnt in reforming education to produce 21st century skills. The non-profit sector lacks the resources to really take on the challenge. Most likely the U.S. will just muddle through to mediocrity by never vigorously considering the skills that children need for the 21st century. The Bush initiative for "no child left behind" would appear to support my view on the future of U.S. education.
To reform education requires four key parts:
Education must be focused on student centric learning to match the need in the 21st century for individual responsibility for economic well being; self-paced learning as opposed to grade-based classes is probably a natural outcome of such an approach
Education must be managed at the local level rather than by the federal government in order to encourage community support for the initiative; community/parental support greatly improves educational outcomes
Teaching of entrepreneurship needs to be started at the middle school level to reorient the next generation of children to the concept that they must manage their economic well being
Online resources need to be meaningfully integrated into the curriculum to free up resources for the new educational environment, which means that teachers likely will need training to successfully work in the new environment
Do five year olds need to manage their own fate. Probably not, but they need to be raised in an environment that encourages individual initiative and not rote memorization of facts that are better explained by an online lecturer.
Addition: This post from Edudemics advocates four activities for students to foster learning. Number 3 is startups.
