Introducing Tom Ehrenfeld, Author of The Startup Garden

Welcome to Day 4 of the Business Blog Book Tour. Our guest today is Tom Ehrenfeld, author of The Start-up Garden.

In The Startup Garden, Tom speaks eloquently about how the Internet has changed things for entrepreneurs. He also speaks frequently about future changes he sees on the horizon. Tom to share more detail about Internet trends and their impact on entrepreneurs and startups.

Small Business Trends Question #1: What are some specific examples of the positive legacy the Internet bubble left behind?

Tom Ehrenfeld: On a macro level I believe the Internet bubble created a sense of possibility among teens and college students entering the workforce that entrepreneurship was a viable and achievable career path. A significant number of smart and industrious individuals were exposed to successful people who capitalized on a passion and vision based on the promise of the technology.

• Despite the prevailing wisdom that the bubble has turned people off, I truly believe that its positive legacy has been to show the promise (albeit the peril too) of creating your own gig.
  
• Moreover, I see some individuals who hit the jackpot striving to use the Internet to help others launch meaningful companies. In particular, the work of such as Bo Peabody and Matt Harris, who hit it big with Tripod, have gone on to use some of their proceeds to launch Village Ventures, a vc fund enabled by the Internet, that seeks to invest in promising startups located outside of the geographic hotspots like Boston or San Francisco.
  

Small Business Trends Question #2: How will the Internet help budding entrepreneurs make the connection between their personal life and their business aspirations?

Tom Ehrenfeld: I guess in a fundamental way the Internet has not yet helped individuals tap into the connection between personal aspirations and their business, at least not in a meaningful way that I have witnessed.

• I think that the more that individuals can realize how their unique skills and resources and opportunities (themselves or combined with their founding team) can come together in a tangible way that delivers value to customers, the greater their chance of success. I'm not talking about entrepreneurship as a selfish quest for identity - but the need to pour what you know and care about and are good at into a healthy venture.
  
• I do believe the greatest use of the Internet to date is one of marketing. I see many clever individuals using the Internet to create lively blogs and websites that serve as terrific forms of finding prospective customers, sharing company data, and simply helping create opportunities for success. To the extent these sites share personal or differentiated material from the founder, they help "personalize" companies.
  

Small Business Trends Question #3: Has the Internet fundamentally changed the process of starting up a business? If so, in what ways?

Tom Ehrenfeld: I just don't believe the Internet has fundamentally changed the process of starting up a business. Yet. And I believe that the fundamental process is unlikely to change radically as long as we operate under the same economic rules we do know. To succeed, individuals will have to bring together the right mix of resources to capitalize on an opportunity they recognize as having enduring value, and they will have to grow or develop a fundamental skill set to do this in a way that is reflective, responsive, and always open to new learning and change. I think the biggest change, both actual and coming, has to do with business metabolism - the rate at which companies go through their basic activities.

• The Internet makes it possible for people to find customers, form networks, communicate with key players, find information, process information, market to folks, and many other activities at a far greater speed. It does so while erasing barriers such as distance and formal (state or national) boundaries. And so companies that have all the elements aligned truly have the potential to grow much faster than before.
  
• The downside of this accelerated metabolism: companies can also fold far faster than before. Two reasons: it is harder to maintain a competitive edge in the market as a result - and the big players have more flexibility to attack you as a result.
  

Small Business Trends Question #4: Will the Internet open up new markets for startups, and how?

Tom Ehrenfeld: We've certainly seen many technology-based startups benefit from the Internet. As to the next generation of startups...let me simply cite an article I wrote for the Industry Standard several years back, and which continues to reflect my beliefs: "Small is Beautiful."

Small Business Trends Question #5: Will the Internet support entrepreneurs and help them be more successful? How?

Tom Ehrenfeld: I'd like to think the Internet will support entrepreneurs and help them be more successful. What does the Internet do best? Form communities. Spread news. Make connections. Help educate folks with information they might not otherwise have access to. In each of these categories I see some baby steps being made, but unfortunately, and this would take too long to go into, I fear that virtually every beneficial trend of the Internet in this regard carries negative consequences that are harmful or counterproductive. Okay, let's consider a few areas.

• Information is now more widely available - but I am appalled at how many people - students for example - who believe that doing a Google search on a topic turns up an objective and comprehensive search for real data.
  
• Or communities - while it's nice to quickly form communities online, I think this is a very self-selecting and often solipsistic crowd.
  
• Finally, one trend in the Internet particularly concerns me, and that is the increasing concentration of thoughts and ideas to a few leaders, none of whom particularly thrill me. Look at the blog world. While on the one hand I love it, the degree of blogrolling concerns me - it's this "small worlds" effect in which the leading players end up generating a disproportionately large amount of mutual links and buzz and attention, and the best ideas on the net become simply the ones with the most links....
  

Small Business Trends Question #6: Will the Internet become a superhighway for the big established enterprises and make it harder for startups to merge successfully into the flow of commerce, or will it increase access for startups, or will it do both? Who wins and who loses, and how do they win or lose?

Tom Ehrenfeld: You could certainly say that the Internet has made big companies smaller and small ones bigger.

• I think that in some arenas the net amplifies the advantages of big companies (i.e., anything concerning legal battles or the need to fund investments or to leverage existing relationships.) Moreover, the big companies with bigger resources and the patience to sit out trends will often swoop in and capitalize (IBM may not always be first with new products but it certainly knows how to last).
  
• On the other hand, the really smart and focused small players really can use the Internet to form lasting and valuable relationships with customers as long as they find ways to continue to deliver value, plain and simple.
  

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