The pace of change in business can serve one of two functions for entrepreneurs: It can either be the very thing that helps you spot big opportunities, or it can be precisely what causes your downfall because you can't keep up.
That was the theme at a recent TEDx event at the Times Center in Times Square. An audience of about 300 entrepreneurs, business owners, and executives listened to 10 speakers, including former vice chair of the NASDAQ David Weild and professional hacker Josh Klein. The idea was to explore the nature of change, both in terms of how to prepare for it in your business and what to expect on a more macro level.
Below, we've pulled together three important ideas from the event that every entrepreneur needs to know.
How to Survive in an Constantly Changing Industry
You think staying relevant in your industry is tough? Consider the perfume business. Veronique Gabai-Pinsky, the global brand president of Estee Lauder Company, laid out what her company is up against every year. It can take 7,000 fresh flower pedals to make a single vial of perfume and there's no telling if a scent will take off, being that smell is a subjective sense. And the industry is packed with cutthroat competition: just last year, 1,100 new perfume companies launched around the world--that's more than three new companies hatching a day.
Gabai-Pinsky says to survive in such an industry, which is driven by trends, celebrities, and new businesses, a company cannot transform its identity to keep up. In fact, you must do quite the opposite: "If you are surrounded by uncertainty, there is only one thing you can and must be sure of--that's who you are and what truly matters to you and what you stand for," she says. "This is your guide through the change."
That's not to say that a brand shouldn't evolve over time. Things such as business models and communication tools naturally must adapt. But brand identity must never change, Gabai-Pinsky advises. "New doesn't last."
To be successful, focus relentlessly on three things: a craft committed to quality; a culture that gives customers value, guidance, and community; and creativity that rethinks the product for the customer. "You need to focus on what makes you unique, focus on what makes your brand a one-and-only," she says. "It doesn't matter what celebrity is selling your message, it's the message that matters and that message needs to give you goosebumps. It has to touch you deeply and personally."
A Booming Black Market Online Will Lead to More Innovation
Josh Klein, an author and a professional hacker who has cracked systems for the CIA, says that the world economy is going to be completely different in the next five to 20 years. The change that's coming? The black market, which Klein pegged as a $10 trillion economy, is going to go big online. He predicts by 2020, two out of three people will be exchanging goods in the underground economy via the Internet. And as they do, they'll adopt crypto-currency like Bitcoin and more mainstream business tools like Square payment processing.
The impetus for this change, he says, is the growing influence of the "Sharing Economy." He explained that with the rise of businesses including Airbnb, Uber, and NeighborGoods, there is also the return of what he calls the "pre-financial model." He means that though money still exchanges hands in these businesses, the worth of the goods or services is completely dependent on the two parties involved in a transaction. Another outcome: At Airbnb, a homeowner might easily bypass the step of declaring income to the IRS.
But that's only the beginning. Klein says capitalism is having a "Napster moment," referring to the peer-to-peer music sharing site that introduced MP3s to the general public in 1999. It eventually had to shut down because it broke copyright laws. When Apple released iTunes and the iPod, it became an alternative to music piracy, but not a replacement. Klein suggests a similar sequence of events will happen with the Sharing Economy, and many of those start-ups considered so disruptive won't last. "For me, what we see with Uber, NeighborGoods, and Airbnb is exactly what we saw with Napster," he says. "Many of them are going to be crushed. But what comes up in their stead is going to bigger, better, faster, and particularly suited for the two-thirds of the human race who will come online to spend and buy."
Entrepreneurs Can Save the Economy
David Weild, CEO of IssuWorks and former vice chairman of NASDAQ, had his own explanation for the current economy--and what it could be like in the future. In his mind, the U.S. economy has totally transformed for the worse since the 1970s. He pointed out that there are fewer public companies now than in 1975. Rules and regulations have boxed out smaller companies, he says, arguing that if Intel was a start-up today it would've been unable to go public.
Weild says small business is America's future, but the nation still has a lot more to do to help realize that dream. Although the JOBS Act is a good start--and something Weild is credited for creating--it's not enough. In the U.S., 64 percent of net new jobs are created by small business. But entrepreneurs can help create more if they get enough support, he says. He used his talk to push the idea that entrepreneurs and activists must get together and push for legislative change, specifically in the effort of JOBS Acts 2 and 3. "Everything starts small," he says. "If we don't get capital in the hands of small business, we have a problem."