What Would Google Do_ - Jeff Jarvis [104]
Can large companies spark entrepreneurism in their ranks? Google, of course, invests in internal innovation through its 20 percent rule. Google also buys innovation when it acquires companies. Apparently that hasn’t been sufficient, for Google surprised the investment community when it started its own venture fund in 2008. When I worked in large companies, I saw how hard it was for them to invest in start-ups. Investing requires different skills. Finding start-ups comes from networking. Managing the relationship is more like teaching. And big companies need the patience to let investments grow on their own paths and timetables. Still, supporting innovation is vital in any industry and any company you can name. Rather than implementing 20 percent rules, perhaps companies can find innovators within their ranks by offering grants to entrepreneurial employees in return for equity. Perhaps universities can help. I am working to start an incubator for the news industry inside my university.
Venture capital’s goal is to find talented people with good ideas and to give them the resources they need to execute those ideas. If I were a venture capitalist trying to think like Google, I’d figure out how to build a platform for entrepreneurship. I’d be as open as Fred Wilson with my ideas and hope to attract many more. I’d consider being a matchmaker more than a middleman, sometimes connecting investors and start-ups directly and trying not to get too much in the way. I’d rely on a large, distributed network of trust to help me find and manage investments, rewarding people in that network. I’d put together networks of start-ups that could help each other, whether I invested in them or not. I’d assume that just as it has gotten easier and cheaper to create content and media, it will get easier to create other kinds of companies. I’d manage abundance. All that, of course, assumes that I have an abundance of money. I don’t. Oh, well.
The First Bank of Google: Markets minus middlemen
Banking is the ultimate middleman business, pooling money and need and profiting on the connections. In small ways—as in small is the new big—the internet is already disintermediating the industry by making direct connections.
Take peer-to-peer lending. At Prosper.com, as of 2008, 750,000 members had borrowed and lent more than $150 million in amounts as small as $50, supporting anything from launching new businesses to paying off college loans to getting out from under credit card debt. It’s wonderfully simple and magnificently human. You see the person and the story: “It has been my dream to open a Neapolitan Pizzeria ever since I moved to the United States 9 years ago. I decided to start small at first and open a small food cart, and expand from there…. It is time we expand our little food cart to a full-size pizzeria.” I wanted to invest in that one. Another: “This loan will be used to start a part-time business doing cooking classes for Raw Foods.” What? Cooking raw food? I thought I’d pass on that. Then there was a student who wanted help to pay for her last year in college. “I work a full time job as well as go to school. I currently have a GPA of 3.9 overall. I am obtaining my degree in Accounting and Financial Management and understand the importance of paying your bills on time and maintaining a good credit score.” OK, she sold me. Prosper advises users to diversify loans in case some default (it sends out the collection agency). Though the interest rates run high, this is no way to get rich or to build the new Bank of America. But it is compelling and entertaining. Prosper turns the most impersonal industry there is into a real-life reality show filled with dreams and winners