IN JUNE 1983, I was at a crossroads. I was twenty-four years old and had spent a year working for Pizza Hut. And while I had a good time traveling the country and stuffing myself, the job was starting to get old. That summer I made a pros and cons list. I wrote down various career options—going to an established company, a startup, or a consulting firm—and ticked through the benefits and drawbacks of each possible move.
First on my list were established tech companies such as Apple and Atari. Marketing positions at those companies would have provided the tech on-ramp I was seeking, but with big companies come internal politics and red tape. There were some pros to those jobs but also a whole lot of cons.
When considering the possibility of joining a marketing consulting firm in San Francisco, I noted that while it would be fun to work in Silicon Valley, I had three concerns: “stuffy, tough sell, don’t like consulting.” So that was a pass, too.
Finally, there was CVC, the startup I ended up choosing. I saw a lot of upside to going there: an exciting idea, promising technology, a chance to make a big impact in a growing market—and, best of all, the opportunity to work alongside and learn from entrepreneur Bill von Meister. I listed only one downside: “future uncertain.”
Everything about that CVC job was up in the air, from my future role in the company to the future of the company itself. Of course, you know how the story ends, but at the time this was a big concern. In a way, though, that uncertainty was as much a pro as it was a con. Sure, an uncertain future meant I could be out on the streets looking for a job in a few months’ time. But it also meant a chance to make my own destiny. A chance, as it turned out, to play a role in making the Internet a part of everyday life.
I’m often reminded of the famous newspaper ad Ernest Shackleton is said to have placed before his 1914 attempt to explore Antarctica: “Men wanted for hazardous journey. Small wages. Bitter cold. Long months of complete darkness. Constant danger. Safe return doubtful. Honor and recognition in case of success.”1 That’s the beauty of entrepreneurship, and that’s what drew me to CVC.
The bottom line is that when I was twenty-four, I had no idea where my own “hazardous journey” would lead me. I didn’t know whether my stock options would even be worth the paper they were printed on. All I knew was that in the uncertainty lay immense challenges—and enormous opportunities. There was a boundless electronic frontier to explore, an online Antarctica filled with peril and possibility. And I knew that I needed to be a part of charting that uncertain future.
When I think about what the world will look like thirty years from now and try to anticipate what problems we need to solve—to say nothing of the problems we face now—I see another uncertain future. But I also believe that, as in my case, this uncertainty isn’t a disadvantage. Once again, we’ve got a pro masquerading as a con. Once again, we have the opportunity—and, I believe, the obligation—to set a new course. Now we just have to think about what all of us—entrepreneurs, business leaders, government officials, everyday Americans with good ideas—can and must do to make sure we arrive there.
If you’ve decided to skim this book or skip to the end, I won’t take offense as long as you stop here. These are the things you’re going to need to remember, whether you’re a budding entrepreneur, a corporate executive, or a casual reader.
The Third Wave of the Internet is coming, the moment where the Internet transforms from something we interact with to something that interacts with everything around us. It will mean the rise of the Internet of Everything, where everything we do will be enabled by an Internet connection, much in the way it’s already enabled by electricity. This process will lead to the transformation of some of the industries that are vital to our daily lives, which will make the barriers to success higher, and the need to form partnerships much more central, as a way of building credibility, opening doors, and getting past industry gatekeepers. One such partner will likely be the government, which has an interest in regulating the industries most affected by the Third Wave. Don’t confuse your views of government with the role of government, which can be either an impediment to progress or a driver of it, and which cannot be ignored. Much Third Wave innovation will come from impact entrepreneurs focused on building “profit plus purpose” companies that have a measurable impact in the world. And this innovation will be geographically dispersed, as the rest of the country (and the world) rises up to complement the innovation now occurring largely in a few places, such as Silicon Valley. The challenges in the Third Wave will be vexing, and as Thomas Edison reminds us, “Vision without execution is hallucination.” But if we rally together, and execute with precision, we can remain the world’s most innovative and entrepreneurial nation.
So that’s my thesis, in a nutshell. Think of it as the CliffsNotes—or BuzzFeed—guide to the Third Wave. But before closing, I want to share a few parting thoughts.
In practically every disaster movie—be it Independence Day or World War Z or Godzilla—there comes a moment when a character looks at the protagonist and says something to the effect of “The fate of the planet is in your hands.” Our hero always gulps, looks terrified, and then blasts off to blow up the asteroid or defeat the rampaging aliens before they take out New York City.
Fortunately, there is no asteroid bearing down on Earth (that we know of). But if we’re being honest, here in the second decade of the twenty-first century, we’re facing our fair share of serious obstacles.
To those who consider themselves entrepreneurs: Our country—and the world—depends on you. Our future is going to rise and fall with the dreamers and doers, the builders of new technologies and the breakers of old orthodoxies.
So let us set our ambitions high. Let us worry a little less about our net worth and a little more about our net impact. I disagree with the anonymous Apple executive who claimed, in a 2013 New Yorker article, “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”2 Entrepreneurs do have a responsibility to do more than make cool gadgets and popular apps, not because those products aren’t valuable but because, at a time when smart solutions are at a premium, our most valuable resource—the endlessly firing neurons in the brains of our brightest people—ought to be directed at our biggest challenges.
Our healthcare system is really a sick care system—and a system that produces mediocre outcomes at high cost and with low levels of convenience. Innovative tech and genomics startups are poised to reverse that trend, and hold out the potential that we can focus more on wellness, improve outcomes, reduce costs, and boost convenience.
Then there are educational innovations that harness the power of the Internet to expand access to learning. Emerging edtech startups have the potential to democratize learning, personalize it for each student, and offer more teaching, with greater convenience, at lower cost. That isn’t untethered futurism; it’s happening now, in a growing number of schools, and we need to take the best approaches and scale them nationally.
Financial services are being disrupted in unprecedented ways, as new lending and investing platforms are emerging from outside the traditional banking system. Transportation is being reimagined, as self-driving cars and perhaps even a supersonic Hyperloop begin to make the shift from science fiction to reality. Everything from energy to insurance, from agriculture to manufacturing, is transforming. In the Third Wave, there will be opportunities to innovate in every sector, touching every aspect of our lives. So think about how you can attack these old, often intractable problems in new ways.
And remember this: The Internet of Everything will affect every aspect of our lives, in increasingly seamless ways. Use this tool to your advantage.
Remember that companies will be addressing core societal needs and broad-scale change—and that many will be focused on impact and purpose, not just profit.
Remember that entrepreneurship will be regionalizing and globalizing, so you can start this adventure in your own backyard.
Remember that entrepreneurs as “soloists” will be replaced by orchestras playing a stronger, more credible tune. That if you want to go far in the Third Wave, you must go together.
Remember that the sectors that matter to people are regulated by the government, and so the great leaps of the Third Wave will require a respect for policy.
And remember, finally, that the Third Wave will happen in revolutionary, but also evolutionary, ways—more slowly than you may like, but more profoundly than you can imagine.
Whatever you choose, I hope you will pursue the disruptive ideas that will create the most value—not just for your company but for your country and the world. Because that old truism is right: The Stone Age didn’t end because we ran out of stone. It ended because we invented something better.
To corporate leaders, it’s time to develop a perpetual sense of paranoia and curiosity. It’s time to both fear the future and seize its promise, to restlessly drive to master it, no matter what it holds. Regardless of where you and your company stand at the end of today, you can always wake up tomorrow to find that things have changed drastically. You jeopardize your position if you don’t strive to anticipate how it will change.
Keep your finger on the pulse of technology, and consider what its beat might mean for your business. Take stock of trends. Resist the temptation to dismiss up-and-coming technologies.
Empower your team to ask questions and, where no answers exist, to create new ones. Give them the space to innovate and experiment. Take more “shots on goal.” Allow more crazy ideas to bubble up, because the very best ideas often sound ridiculous when first proposed. Surely, executives at Marriott and Hilton would have thought that the idea of renting an air mattress or a room in an apartment was insane. But in 2015, seven years after starting, Airbnb was valued at $25 billion, making it worth more than either of the hospitality powerhouses, both of which have been around for more than half a century. And it’s not just about relative valuations: it’s also about sudden shifts in market dynamics. As Senator Marco Rubio has pointed out, Airbnb is now the largest hospitality provider, yet they don’t own a single hotel. Similarly, Uber is the largest transportation company, though they don’t own a single vehicle. And neither company existed just a decade ago.
Remember that disruption has broadened. Your competitors won’t just emerge from the low end of your industry. Increasingly, they’ll come from other industries, too. Apple wasn’t in the music business, nor was Google in the mobile phone business—until suddenly they were. So build a network in and around your company—and look for opportunity in every direction.
The future belongs to those who endeavor to create it. That’s why we go into business—because we have a vision for the future that we want to see through. So don’t let temporary successes permanently blind your future ambitions.
You have the resources—human, capital, and otherwise—to take on ambitious projects. And so you must decide—is it better to use those resources to resist change or to drive it?
And remember this: In the Third Wave, partnerships will become more important. You’ll have more opportunities in the next decade than you did in the past decade. So don’t just play defense, play offense. Don’t just defend, attack. But don’t go it alone. As Helen Keller said, “Alone we can do so little. Together we can do so much.”
If entrepreneurs have a responsibility to devote their talents to making a lasting, positive impact on society, then government has an equally important obligation to encourage entrepreneurship and smooth the way for new ideas to take off. Government plays a pivotal role in enabling successful startups.
It’s a sentiment we hear expressed repeatedly, on both sides of the aisle. But while our politicians love to tell us how important it is to encourage entrepreneurship, talk is often cheap. If our elected officials truly want to support the next Jobs or Zuckerberg or Musk, they must replace those platitudes with policies.
We must reduce the regulatory burdens on entrepreneurs while forging a new path forward for new industries. We must support the rise-of-the-rest regions, so America’s innovation economy will be more broadly dispersed. We must make the playing field level, so every entrepreneur with a good idea has a shot at raising capital. We must reimagine—and restructure—government to be responsive in the Third Wave. And we must reform our immigration system so we can win the global battle for talent. We know what we need to do—now we just need to come together, in a bipartisan fashion, to position the United States to remain the most innovative and entrepreneurial nation.
That will only happen if all sides—programmers and policymakers, entrepreneurs and elected officials—get over their various perceived slights and incompatibilities and work together. During the Cold War, the White House and the Kremlin had that famous “red phone” to make sure they could reach each other in case of any serious misunderstandings. Here in the twenty-first century, we should have a similar hotline, a “red iPhone” between Washington and Silicon Valley. And that line should always be open.
It’s clear to me that this relationship has a big disconnect that we need to bridge. We need engineers to understand Congress, and Congress to understand entrepreneurs. And both need to be better, not just at listening to one another, but at taking action to support each other, too.
Above all, we need to remember that, fundamentally, business and government want the same thing: to add value to people’s lives. Our society has been strengthened by both Social Security and cybersecurity, by the Air Force and by Airbnb. And whether it’s through an ingenious product or a life-changing social program, a disruptive innovation or a constructive piece of legislation, CEOs and members of Congress alike aim to make our lives safer, easier, happier, and more productive. We should remember that there’s more that unites us than divides us. After all, what is the United States if not the most successful startup in the history of the world?
This relationship will not be “frictionless,” to use a favorite Silicon Valley buzzword. We’re not going to get every tedious regulation off the books or reach a perfect consensus on when and how companies should share their customers’ private data with intelligence agencies. But as technology increasingly intersects with government—from the need for a functional HealthCare.gov website to the challenging questions raised by growing government surveillance—a strong and productive relationship between entrepreneurs and government is a necessity.
Ultimately, for both sides to add to this country—to add jobs, to add services, to add value—we need to stop subtracting from one another’s work. The best answers to our problems won’t originate in the Oval Office or in a garage in Palo Alto. They’ll arise, as so many of our most innovative ideas have, from connections between different people in different places drawing on a wealth of different perspectives.
So now I come to you. If you’re reading this book, it’s clear that you care about the future of entrepreneurship and the potential of the Third Wave. Ideas excite you, the bigger the better. Maybe you have one yourself. But if you’re still reading this book, perhaps I haven’t yet given you a good enough reason to put it down and turn that idea into a reality. So if you’re thinking about taking the leap, let me give you a little nudge.
When I was graduating from college and not yet sure what I was going to do, I applied to a couple of business schools. They asked for a personal statement, so I wrote:
I firmly believe that technological advances in communication are on the verge of significantly altering our way of life. Innovations in telecommunications (especially two-way cable systems) will result in our television sets becoming an information lifeline, newspaper, computer, school, referendum machine, and catalog.
Clearly, this will have a drastic effect on advertising, as will changes in the number, ages, and working habits of the U.S. population. The new technologies will fragment the home audience and allow advertisers and agencies to escape from the rigidity of commercial formats and develop communications forms appropriate to individual advertisers and their target audiences. More sophisticated testing techniques in persuasion and effectiveness measurements will have to be developed to take advantage of the ability advertisers will have to isolate specific groups of customers.
More importantly, the industry must develop executives who have an understanding of the people who live in an electronic society and what motivates them, and the ability to anticipate problems that need to be solved.
I thought all of that made a lot of sense when I wrote and submitted my applications back in 1980. And yet every business school to which I applied rejected me.
But the trends I wrote about nearly four decades ago proved to be pretty accurate. Today, technological advances in communication aren’t “on the verge” of altering our way of life—they’ve already transformed it. The Internet hasn’t just had “a drastic effect” on advertising—it has revolutionized how businesses interact with consumers. And it’s more essential than ever that each and every industry develop executives who understand the people who live in an electronic society and anticipate the problems they’ll need solved.
And that’s where you come in. It was my great fortune to help get America online. It’s up to you to get America—and the world—on track, to lead the Third Wave and beyond. To help us ride the bleeding edge of the next big thing. To be honest, I’m a little envious. You won’t find any experience more gratifying or exhilarating—especially now, as the Third Wave creates the possibility for such meaningful change.
This moment should speak to the innovator inside you. The one who refuses to accept the world as it is. It should invoke an urge to explore, to question, to push boundaries. It’s an urge I encourage you to heed, whether you’re a serial entrepreneur or a corporate executive debating whether to take the plunge.
There will be headaches and heartaches—I guarantee it. The naysayers will be out in full force. But these are the people who saw the first automobiles, in 1896, and jeered, “Get a horse!”3 They’re the ones who didn’t know how to pronounce the word “Internet” and never thought they’d need to. Your job—your only job—is to stay relentlessly focused on that voice in your head that tells you, “It can be done.” Or, as Nelson Mandela said in another context, “It always seems impossible until it’s done.”
Yes, the future is uncertain—and that’s what makes it so exciting. And yes, it will be hard—which is why it’s important to remember what Teddy Roosevelt said a century ago:
It is not the critic who counts. . . . The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.
So put down this book. Pick up your smartphone, your notepad—your blowtorch, if you’re feeling ambitious. Take action. Be fearless. You may stumble, but get back up. Keep going. Keep tinkering, perhaps late at night, after the children are in bed. Build something that makes you proud—but not satisfied enough to stop dreaming about what comes next. Enter the arena. Topple an empire and build your own from the ground up.