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Setting the Stage: Technology
and the Modern Enterprise


1. Appreciate how in recent years, technology has helped bring about radical changes across industries and throughout societies.

This book is written for a world that has changed radically in the most recent years of your lifetime. At the start of the prior decade, Google barely existed and well-known strategists dismissed Internet advertising models.[1] By decade’s end, Google brought in more advertising revenue than any firm, online or off, and had risen to become the most profitable media company on the planet. Today billions in advertising dollars flee old media and are pouring into digital efforts, and this shift is reshaping industries and redefining skills needed to reach today’s consumers. Prior to the introduction of the iPod, Apple was widely considered a tech industry has-been. Within ten years Apple had grown to be the most valuable firm in the United States, selling more music and generating more profits from mobile device sales than any firm in the world. Social media barely warranted a mention a decade ago, but today, Facebook’s user base is roughly the size of the world’s most populous countries, China and India. Firms are harnessing social media for new product ideas and for millions in sales. But with promise comes peril. When mobile phones are cameras just a short hop from YouTube, Facebook, Instagram, and Twitter, every ethical lapse can be captured, every customer service flaw graffiti-tagged on the permanent record that is the Internet. The service and ethics bar for today’s manager has never been higher. Social media has also emerged as a catalyst for global change, with Facebook and Twitter playing key organizing roles in uprisings worldwide. While a status update alone won’t depose a dictator, technology can capture injustice, broadcast it to the world, disseminate ideas, and rally the far-reaching. Moore’s Law and other factors that make technology faster and cheaper have thrust computing and telecommunications into the hands of billions in ways that are both empowering the poor and poisoning the planet.

China started the prior decade largely as a nation unplugged and offline. But today China has more Internet users than any other country and has spectacularly launched several publicly traded Internet firms including Baidu, Tencent, and Alibaba. China Mobile has become one of the most valuable companies on earth. The world’s second most populous nation, India, has ridden technology to become a global IT powerhouse. In two decades, India’s tech sector has grown from “almost nothing” to a $73 billion industry, expanding even during the recent global recession. Technology has enabled the once almostexclusively-agrarian nation to become a go-to destination for R&D and engineering across sectors as far-flung as aircraft engine design, medical devices, telecom equipment, and microprocessors.[2] Think the United States holds the number one ranking in home broadband access? Not even close—the United States is ranked sixteenth.[3]

Even in the far reaches of nations in sub-Saharan Africa, fast/cheap tech is becoming an economic lubricant. Mobile phones using Ghana’s Esoko empower the agrarian poor with farming info and commodity pricing, raising incomes and lowering the chance of exploitation by unscrupulous middlemen. Kenya’s M-PESA and Somaliland’s Zaad use text messages to replace cash, bringing the safety and speed of electronic payment and funds transfer to the unbanked and leveraging mobile money at rates © 2013 Flat World Knowledge, Inc. All rights reserved.

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that far outstrip any nation in the West.[4] And Sproxil uses text message verification to save lives by fighting drug counterfeiting throughout the continent. Tech giants including Google, IBM, and Microsoft now run R&D centers and significant operations in several African nations,[5] many of which now rank among the world’s fastest growing economies.[6]

Many nations in sub-Saharan Africa are seeing significant tech-fueled growth. Throughout the continent, technologies substitute for cash, deliver insights to farmers, and help uncover counterfeit pharmaceuticals. This plant in Accra owned by Ghanaian firm Rlg is the first sub-Saharan PC, tablet, and cell phone assembly facility.

Source: Photograph taken with permission of the Rlg plant.

The way we conceive of software and the software industry is also changing radically. IBM, HP, and Oracle are among the firms that collectively pay thousands of programmers to write code that is then given away for free. Today, open source software powers most of the Web sites you visit. And the rise of open source has rewritten the revenue models for the computing industry and lowered computing costs for start-ups to blue chips worldwide.

Cloud computing and software as a service are turning sophisticated, high-powered computing into a utility available to even the smallest businesses and nonprofits. Many organizations today collect and seek insights from massive datasets, which are often referred to as “Big Data.” Data analytics and business intelligence are driving discovery and innovation, redefining modern marketing, and creating a shifting knife-edge of privacy concerns that can shred corporate reputations if mishandled.

And the pervasiveness of computing has created a set of security and espionage threats unimaginable to the prior generation. As recent years have shown, tech creates both treasure and tumult. These disruptions aren’t going away and will almost certainly accelerate, impacting organizations, careers, and job functions throughout your lifetime. It’s time to place tech at the center of the managerial playbook.

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In the prior decade, tech firms have created profound shifts in the way firms advertise and individuals and organizations communicate.
New technologies have fueled globalization, redefined our concepts of software and computing, crushed costs, fueled data-driven decision making, and raised privacy and security concerns.




1. Search online and compare profits from Google, Apple, and other leading tech firms with those of major media firms and other nontech industry leaders. How have profits at firms such as Google and Apple changed over the past few years? What do you think is behind such trends? How do these compare with changes in the nontech firms that you chose?

2. How do recent changes in computing impact consumers? Are these changes good or bad? Explain. How do they impact businesses?
3. Serial entrepreneur and venture capitalist Marc Andreessen has written that “software is eating the world,” suggesting that software and computing are transforming entire industries and creating disruptive new upstarts. Come to class with examples of firms and industries that have been completely transformed through the use of software.

4. How is social media impacting firms, individuals, and society? 5. What kinds of skills do today’s managers need that weren’t required a decade ago? 6. Investigate the role of technology in emerging markets. Come to class with examples to share on how technology is helping fuel economic growth and provide economic opportunity and public good to consumers outside of North America, Europe, and Asia’s wealthier nations. 7. Work with your instructor to identify and implement ways in which your class can leverage social media. For example, you might create a Facebook group where you can share ideas with your classmates, join Twitter and create a hash tag for your class, leverage Google Hangouts and other tools on Google+, or create a course wiki. (See Chapter 8 “Social Media, Peer Production, and Web 2.0” for more on these and other services.)



1. Name firms across hardware, software, and Internet businesses that were founded by people in their twenties (or younger).

The intersection where technology and business meet is both terrifying and exhilarating. But if you’re under the age of thirty, realize that this is your space. While the fortunes of any individual or firm rise and fall over time, it’s abundantly clear that many of the world’s most successful technology firms—organizations that have had tremendous impact on consumers and businesses across industries—were created by young people. Consider just a few: Bill Gates was an undergraduate when he left college to found Microsoft—a firm that would eventually become the world’s largest software firm and catapult Gates to the top of the Forbes list of world’s wealthiest people (enabling him to also become the most generous philanthropist of our time). Michael Dell was just a sophomore when he began building computers in his dorm room at the University of Texas. His firm would one day claim the top spot among PC manufacturers worldwide. Mark Zuckerberg founded Facebook as a nineteen-year-old college sophomore. Steve Jobs was just twenty-one when he founded Apple.

Tony Hsieh proved his entrepreneurial chops when, at twenty-four, he sold LinkExchange to Microsoft for over a quarter of a billion dollars.[7] He’d later serve as CEO of Zappos, eventually selling that firm to Amazon for $900 million.[8]

Sergey Brin and Larry Page were both twenty-something doctoral students at Stanford University when they founded Google. So were Jerry Yang and David Filo of Yahoo! All would become billionaires.
Kevin Systrom was twenty-six when he founded the photo-sharing service Instagram. In just eighteen months, his thirteen-person start-up garnered thirty-five million users worldwide, including five © 2013 Flat World Knowledge, Inc. All rights reserved.

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million Android users in just a single week, and sold to Facebook for a cool $1 billion. Systrom’s take was $400 million.[9] Another young one nabbed twice as much. Twenty-one-year-old Palmer Luckey sold virtual reality firm Oculus VR to Facebook for $2 billion before his company had even shipped its first consumer product. Steve Chen and Chad Hurley of YouTube were in their late twenties when they launched their firms. Jeff Bezos hadn’t yet reached thirty when he began working on what would eventually become Amazon. The founders of Dropbox, Box, and Spotify were all under thirty when they founded businesses that would go on to be worth billions.[10] Of course, those folks would seem downright ancient to Catherine Cook, who founded, a firm that at one point grew to become the third most popular social network in the United States and eventually sold for $100 million.[11] Cook started the firm when she was a sophomore—in high school. David Karp was another early bloomer. Karp wasn’t just another college dropout; he actually quit high school for self-paced, tech-focused home schooling. Good move—he was taking meetings with venture capitalists at twenty, went on to found what would become one of the world’s most visited Web sites, and sold that Web site, Tumblr, to Yahoo! for $1.1 billion at an age younger than most MBA students.[12]

Wealth accumulation wasn’t the only fast-paced activity for young Bill Gates. The Microsoft founder appears in a mug shot for a New Mexico traffic violation. Microsoft, now headquartered in Washington State, had its roots in New Mexico when Gates and partner Paul Allen moved there to be near early PC maker Altair.

Source: Wikimedia Commons.

This trend will almost certainly accelerate. We’re in a golden age of tech entrepreneurship where “the cloud” means a start-up can rent the computing resources one previously had to buy at great expense; where app stores give code jockeys immediate, nearly zero-cost distribution to a potential market of hundreds of millions of people worldwide; and where social media done right can virally spread awareness of a firm with nary a dime of conventional ad spending. Crafting a breakout hit is tough, but the jackpot can be immense.

But you don’t have to build a successful firm to have an impact as a tech revolutionary. Shawn Fanning’s Napster, widely criticized as a piracy playground, was written when he was just nineteen. Fanning’s code was the first significant salvo in the tech-...

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