Thoughts in Time

I haven’t posted for awhile because I’ve been super busy with transitioning from my role at Higher One and getting things rolling with the new business. We’re still keeping fairly quiet about what we’re doing, however I want to share a few things and then am going to be blogging consistently as the business, and my life, evolves. The business is a consumer Internet oriented company. It’s about doing things within the now socially connected internet. It’s about entertainment and fun with friends. The cool thing is that we’re going global from day 1. We’re building a great team. Johannes Larcher, who built Overture’s international business has joined as CEO. We raised seed funding from First Round Capital (Chris Fralic and Josh Kopelman). Most importantly, with the business I’m moving to London to get our UK office started. A second act in a second country - just thinking about all the things this involves is mind blowing. Starting with no network, no office, no place to live! It’s going to be a great new challenge, but hey - that’s why we’re doing it. Stay tuned

Technology Fast 500: Rising Stars List - Deloitte & Touche USA LLP

Higher One was just named a “Rising Star” by Deloitte. We clock in at #10. It’s kind of a bit of a silly ranking system as a lot of where you end up depends on your base year revenue. If year 1 was 55k, and your third year was 10MM that you have ~20,000% growth. If your base year was ~1MM then you have 1000% growth. Now, would you rather own part of a biz that goes from 55k in revenue to 550k in revenue, or one that goes from 1 to 10 million. Anyways, it is still an honor to be on the list and a great tribute to all the folks who work at Higher One!

I had a conversation the other day with a reporter who was interested in why many startup companies get their legs by partnering with companies that many might see as being their competitor. Take Higher One as an example. Fundamentally, we’re competing with banks, yet we offer our service through a partnership with a bank. In some cases, the answer is that the startup has developed a new technology and this provides a barrier to entry for the large potential competitor. More often, I think that there exist cultural barriers to entry that prevent a larger firm from entering a market to compete with a startup. Internal organizational issues may make it close to impossible to pull together the group necessary to build something that competes with something developed by a much smaller group of people that have less management overhead. If you’re interested in this idea, I would recommend reading Clayton Christensen’s books - The Innovator’s Dilemma (HarperBusiness Essentials) and The Innovator’s Solution: Creating and Sustaining Successful Growth. Although Christensen doesn’t specifically refer to the problem as “cultural barriers to entry” he does identify organizational obstacles as a primary reason why DEC, the large steel companies, etc. were not able to move quickly enough to keep their business being destroyed by disruptive technologies. In The Innovator’s Solution, he suggests that large companies create organizations outside the traditional org. structure to work on disruptive technologies. I think that although an interesting idea, I think that it is almost impossible to separate a group from the company culture unless all of the employees are new… and the fact that they are employees rather than “founding employees” makes this cultural barrier very difficult to overcome.

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