Enterprise 2.0

Sanity check: Will startups or big companies have a bigger impact on tech in 2008?

The tech industry has a romantic infatuation with startups. Many of today's biggest billion dollar tech giants began as fledgling startups in basements and garages. In 2008, who will have the larger impact on tech -- the latest startups or the former startups who are now big businesses?

For the past four decades, the tech industry has had a romantic infatuation with startups. Much of that is due to the fact that many of today's biggest billion dollar tech giants began as fledgling startups in basements and garages. In the 1970s and 1980s, it was mostly startups involved in the rise of the PC. In the 1990s,  startups were hitched to the birth and growth of the Internet. During the past few years, the infatuation has transferred to the startups powering the Web 2.0 revolution, which is basically the transformation of the Internet into an application, services, and social collaboration platform.

While startups have an enchanting aura of energy, passion, and innovation, big companies -- even the ones that used to be cool startups -- are often saddled with the stereotype of being boring, bogged-down, and conservative. Nevertheless, the best, coolest, and most important work in tech is not reserved for startups. The truth is that startups and big businesses typically operate with two distinctly different sets of priorities and challenges.

All of this begs the question of whether startups or big companies will have a larger impact on business technology in 2008. The answer is complicated, since startups are about new ideas and innovations and big companies are about people and processes. To take it one step further, startups are usually about launching new ideas to successfully gain a following and show the potential to become a big idea, while big companies are about about building the right teams and processes to systemically deliver successes again and again.

With that in mind, here are some predictions for tech startups and big tech companies in 2008.

In 2008, tech startups will ...
  • Use their nimbleness and focus to take advantage of specific opportunities that big companies have not figured out how to crack (e.g. , Web video and online collaboration).
  • Struggle with resources as a result of the credit crunch and the slowing world economy.
  • Witness a major consolidation of Web 2.0 vendors, with some going under as they run out of money and/or don't have a product that has differentiated itself in the market and others being acquired by competitors or big companies.
  • Create new markets and new opportunities with ideas that fly in the face of conventional wisdom.
In 2008, big tech companies will ...
  • Use their experience and deep pockets to patiently wait for markets like WiMAX, UMPC, and VoIP to mature, become profitable, and eventually revolutionize certain aspects of work and play.
  • Take ideas that had big potential as a startup and do the hard work of building an infrastructure to systematize and channel that potential into a sustainable success.
  • Repeatedly fail to execute on ideas that they should be able to get right because of a lack of focus and/or having too many cooks in the kitchen -- for example, simplifying security configuration for users and IT.
  • Use their resources and scale to successfully bring great ideas to the masses and thereby make a major impact on culture and daily life (e.g., the Tablet PC and touch-based interface).

So which will have the larger impact on tech in 2008? Because the Web 2.0 movement has reached the point where it's time for consolidation, commoditization, and monetization, the pendulum is going to be swinging toward big companies in 2008. In fact, many of the Internet's long-promised revolutionary advances (for example, in telephony, video, conferencing, and collaboration) are at the point where they need capital, organization, and systemization -- all of which play to the strengths of big business.


In the spirit of full disclosure, I should mention that over the past decade I have worked at two startups and I have worked in corporate America. That includes my work at TechRepublic, which was a startup when I was first hired in 2000, but is now part of a corporate publishing empire of CNET Networks.

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

25 comments
mrawicz
mrawicz

Sorry Jason, but you are not saying anything new here. Rehashing - take out Web 2.0 and put in take your pick...I thought you had something insightful to say.

mrawicz
mrawicz

Sorry Jason, but are not saying anything new here.

jumpball
jumpball

From what I have seen we will start erasing the line between web enabled and non enabled devices. Soon every device will have wifi connectivity by default connecting into our home and business wifi networks along with the public spans being created. This will lead to yet unseen new business models and products.

Tig2
Tig2

We have completely lost sight of the business model that once made America great. And the global model isn't the right thing either. Todays employee is rarely motivated by anything other than doing whatever must be done to acquire the paycheck and go home. And indeed, home is the primary motivating source. The fact is that there is no loyalty whatsoever to the employer. And what is disheartening is that the employer both knows that, and doesn't care. And thus, the drive to innovate- to truly reach further- is mostly lost. The brilliance of so many people in IT today is not fully realized because they're tired. They spend their days running in corporate devised circles and being basically unfulfilled. They get home at night feeling tired and unchallenged. They dread getting up in the morning to do it all again. The desire to continuously learn new technologies and new directions has been replaced by the desire to do enough to support the family. I have worked for large corporations and I have worked for start ups. Truthfully, I saw no differences. The large corporation wanted 60 hours a week for the price of 40 and insured that the extra time was a requirement because of stogy business processes that never added value but required time to manage. The start up wanted 80 hours a week for the price of 40 and insured that the extra time was a requirement because no one bothered to put basic business processes in place and would fight like dogs if anyone tried to do so. Tech workers in the US feel disheartened as they see company after company send jobs overseas and so become willing to do whatever it takes to retain their jobs. There are few, if any, who are willing to take their down time and innovate in the garage. Not saying they don't exist, just saying they are precious few. So what could change this? A sense of being valued. Something that neither big business or start up bothers to impart to its worker. If I feel valued by my employer, I am willing to go further, work harder, and do more. The job stops being a means to an end and becomes the end itself. My perception of the job changes and I become empowered to do more and extend more. Suddenly, the creative juice flows and I am willing to seek out new things. That all said, the last time I felt any of that was with a large corporation. The last start up I was with didn't perceive any of those things to be important. If big business wants to harvest the fruit of IT innovation, they will need to re-think how they manage the IT professional. If start ups want to harvest that fruit, they will also need to re-think. Today's IT professional has been used and abused to the point where they have become unwilling to put in extra effort. I would like to think that in 2008 both big business and small start up will learn that the people that make the business happen are their greatest resource. I would like to think that people will begin to feel valued for what they are doing and want to do more- for the sheer joy of doing it. I truly believe that, in order for new technology to come to fruition, business of any size must first value the people they call on to do the work. Edit- typo

johncburgess
johncburgess

What happened to the article on.... "Sanity check: The 10 technologies that will change the world in 2008" That was the email heading I received... Have we ended up with cross posted blogs???

sml
sml

I have worked for startups (several in the late 90s), for a large corporation (over 35 k employees), for myself, and now work for a "mid-sized firm (about 1,500 people globally). In each of these experiences, I have enjoyed many aspects of the work. Sure there were annoyances, discouragement, and injustices, but I cannot say that any one place devalued people on a wholesale level. My current employer provides opportunities to grow and learn, but the pace of work is brisk. Management makes silly decisions (to me), but then I am sure I make a few nonsensical choices as I work, too! I see loyalty on many levels where I work, but I also see people "going through the motions". I am loyal, but I sometimes work on things not needed by my employer (like writing this post!). And in that way, I agree with the hybrid model of the workplace . . . give some, take some . . . to yourself and your employer! -Scott

Mobious
Mobious

I too have been struggling under the duality of why I love my job, and also started feeling that I should find something else to do. The inability of organizations to full utilize the raw creative energy and "fruit" of the knowledge worker is hard to find. I appreciate your model, and found that it encapsulated and articulated a framework that I've been working to develop in my organization: to define and ensure that the "value" of the employee (team member) is validated and supported. It's funny that the problem boils down to an HR/management issue. I think people need larger goals, and a manager/leader that can meet the business needs, while being engaged and passionate about getting the very best for and from the people they supervise. I think it starts there. People will follow if the leader is truly taking care of what they should be: meeting business goals and ensuring that their people are taken care of. It's two hats that can be difficult to wear in our "bottomline" age.

JimInPA
JimInPA

I find it interesting that you bring up loyalty to the company and loyalty to the employee. It has become a vicious circle where neither side seems to care for the other. I have oft times myself said that you cannot be loyal to a company, only to people and I stand by that. I have heard it said that most people only work hard enough not to get fired and most companiespay you just enough so that you don't quit and that seems to be the sad reality. I would desparately like to find the company which I could work 30 or 40 year for and retire. It seems that most comapnies don't want that any more. Five years seems to be about all they want. What does that have to do with the question originally posted??? Probably nothing but I just wanted to get that off my chest.

iM2501
iM2501

nobody is doing anything for fun anymore.. it?s all about how can I be the next Bill f@king Gates! Enron and WorldCom invented the new business model and proved it. Take what you can from the workers and if they don?t like it replace them.. workers don?t feel any loyalty to business anymore because business hasn?t given them any reason too.. you want loyalty.. buy a dog... I?m here for the paycheck!

Jaqui
Jaqui

you said it better than I was going to :(

jasonhiner
jasonhiner

You came from the link in the TechRepublic Daily Digest newsletter, which showed the title as "Sanity check: The 10 technologies that will change the world in 2008." That was originally going to be the column for this week but I changed it on Friday and we had some mixed signals. Stayed tuned though. I'm still hoping to do that topic during January. And, again, I apologize for the confusion.

lars
lars

Yeah, that was what I was thinking while reading the article. Maybe next time...

ben
ben

Both! There is a whole lot to "tech", a lot more than Web 2.0 and network security. 2008 will see significant impacts from both with "bigger" a non-issue: it will depend where you look. There will be little "balance of power" or balance of anykind in the next 12 months as I expect instability all over the place (and a wild ride, yea-hah!). You will see big impacts from start-ups started 3 to 5 years ago as market and technology reach converging maturity (WUSB/WiMedia for example). Major WiMAX deployments driven by major "big companies" in both the telecom an IC sectors. Don't ask me about Web 2.0 'cause my 2008 goals is to findly find out what exactly that means. There will be major progress in the next generation hi bit rate wireless with focus on the 60GHz bands, a new standard (P802.15.3c) working it's way through the process (but not approaching "finished" until 2009) and 6 Gb/sec demonostrations by years end (and lots of mystery as to how/when it'll be production silicon). There will be a lot of start-ups seeking round A funding, and it'll be a bitch. The convergence of your life on your mobile handset (I dare not call it a phone anymore since making calls seems almost a minor function) will accelerate this year with fast an furious introductions of new applications on handset and most of the first quarter introductions will be dead and forgotten by Q4. There's a few predictions to bash me over next year!

tim
tim

Jason, I think you've got a bigger picture than most of us working in the trenches have. You go to IT conferences, participate in webinars, are on the receiving end of hi-tech press releases that we don't see. In general, you deal with a wide variety of IT pundits and prognosticators that we only read about. I really wonder if the big companies will be successful in rolling out some of those long-promised technologies on a wide scale. Sure, they have the bucks but do they have the vision? I don't think so. So what will they do - they will buy up the small companies for the technology and throw away the best people. Doh! They don't get it. It's the people that make the technology work. And it's the people who are passionate about their work that make it successful. TiggerTwo said it best. Today's tech guys, including IT Managers like myself are expected to give many more hours of blood, sweat and tears to the company than ever before. We are *always* on call now, and forever putting out fires. It's hard to innovate and come up with new ideas when every waking moment is consumed with keeping the electrons flowing. I think the best ideas will continue to come out of the start-ups, they will continue to sell themselves to the highest bidder, the venture capitalist will get their money, they will lose all their talent and then wonder why their investment didn't turn out to be what they thought. I too have worked for both the small guys that got bought out and for the big guys doing the buying. My advice - get out of the publicly held companies and back to the private sector with a company that intends to stay private.

Michael Jay
Michael Jay

these issues give rise to security jobs to insure that all is secure. Network Security is one of the higher paying positions, of course this requires more training and experience. The ball rolls on... Do not bring problems, bring solutions.

kmoore
kmoore

What a cynic! Yes, we have to make money. With an attitude like yours, you should work for the government ? or some group that is trying to take money from people who make it and pass it around. But we can be giving back to other, creative, industrious, and productive all at the same time. Bill Gates (I sometimes despise him, too) keeps working because he believes that he has more to give not more to make. But, yes, we have to make money, too. Ken

ben
ben

I'm always interested in the trenches view of IT much more than the industry analysts for sevearl obvious reasons: IT Managers, not industry analysts, make purchase and deployment decisions. Keeping in mind my job is a lot more like analyst than IT manager:-) People and passion are what make things happen, not the size of the company. Passionate people can be found at IBM, Intel and Microsoft and contribute to innovation as well as execution. It is OK to be passonate about execution, by the way - nothing gets my heart going faster than seeing a box on the shelf at Fry's that has stuff I helped create inside. In general IT managers are really hard selling for start-up companies, so your faith in start-ups vs established companies sets you apart from the crowd. Most IT managers have enough risk in their day's work, so proven products are favored for understandable reasons. I speak as a serial start-up guy educated the hard way what it takes to compete with incumbents.

netarchitect
netarchitect

The past 20 years have taken me from Military Installations, through the private networks of the forward thinking little guys who then IPO'd and became something more than they once were, only to find myself back again in a small pond... enough metaphors? Great... Tim really hit the nail on the head when he reminded us all that "we (the people)" are the ones that make Technology Work! Unfortunately, we are also, (as he so clearly pointed out to us as well), required to be ON Call - All the time... Thats one sure way to stop the creative juices. But what if there exists a happy place "somewhere over the Rainbow Books" and beyond the one minute manager... If there is such a place, it is there we will make our greatest headway in 2008 as a population of I.T People.

joe
joe

Did you happen to notice that you had no reply's? You hit the nail right on the head.

RipVan
RipVan

...was the same thing others have said, only he went a little farther and said that because of the situation, he takes the money and runs (not sleeps). It is the natural extension and quite human reaction to the situation. Then again, maybe all of the people who took the time to explain their various takes on this subject also need to put on flame-proof suits.

JimInPA
JimInPA

I would be willing to bet this individual is under the age of 25. You see it so often in younger generations. Even in mine (33). Most of them think the world owes them something right out of the blocks. They have a chip on their shoulder and don't want to work for respect and merit and become bitter when it isn't handed to them.