A Southeast Entrepreneur: The Potential of the Third Generation of Tech Entrepreneurs

January 22, 2006

The Potential of the Third Generation of Tech Entrepreneurs

An Essay By Ryan Allis

Since the start of the technology age there have been three generations of entrepreneurs. The first generation consisted of people like Oracle CEO Larry Ellison, EDS billionaire Ross Perot, and yes, even Bill Gates, now over 50. These guys “got it” back in the day before the Internet. They were the “transformation entrepreneurs” and were integral in bringing the United States into the Information Age.

Next on the scene were the guys and girls that grew up with Commodore 64s, Atari, and Ronald Reagan. From this first breed of Internet Age entrepreneurs came people like Jerry Yang, CEO of Yahoo!, Pierre Omidyar of eBay, and Jeff Bezos of Amazon.com. All born more or less in the late sixties, these guys grew up watching the development of computers and were prepared to jump on the opportunity they saw in late 1994. They did well, and their companies tripled and quadrupled each year from 1995-1999. These guys were the frontrunners and were intelligent enough to see the possibility of the Internet twelve or thirteen years ago, perhaps the reason why all three of these companies are still around today.

There is a new breed of entrepreneurs that is already beginning to make their mark on our world. I am one of them. We are the eighties generation. We are as the music group POD says, “The Youth of the Nation.” While yes, there are many of us who are disillusioned, uncaring, or depressed; I am seeing today something truly amazing. There is a subculture of youth in both the United States and in every country in the world that gets it.

I am very fortunate to have contacts in about forty countries. In 2000, I was lucky enough to receive a scholarship to go on a 53-day expedition to Spain, Florida, New Mexico, and Mexico called La Ruta Quetzal. On this trip I met three hundred fifty students from forty-three different countries. It has truly been priceless to be able to have these contacts. For example, during the Argentinean economic collapse in early 2002 I was able to jump on my computer and email Ana from Buenos Aires to see what the real situation was like. When a U.S. spy-plane was shot down in China in April 2001, I was able to email my friend Sonsoles in Beijing to get her take on the incident and her thoughts on what Jiang Zemin would do.

During the World Cup in June of 2002 I was able to chat live with my friend Kevin in Dublin as he grieved over each missed penalty kick in Ireland’s overtime elimination defeat to Spain. For the pre-1980 people reading, would it not have amazed you when you were seventeen to have had the ability to chat live from Florida with your friend in Dublin while both watching the same penalty shot being taken at the exact same time in Seoul, South Korea?

This new breed of entrepreneurs, even if we all do not yet fully grasp the impact of globalization and how important the changes that are occurring today truly are, are either going through college right now or will in the next five years. The case studies they will have in Financial Management 202 will not be the rudimentary mathematical bores they perhaps were for many in their college days of old. They will be riveting tales of unlimited wealth, power, and innovation; in some cases collapse and fraud and in others extraordinary success.

I said a few paragraphs ago “there is a subculture of youth in both the United States and in every country in the world that gets it.” But what it is that we get? We understand the following eleven principles:

The world is global and interconnected. A negative economic report from one country can ravage the economy of a continent overnight, a trillion dollars can leave a country with the click of a few mice, and an explosion in Shanghai can cause bond prices in London to jump 10% within an hour.

Anyone with $1000 and some intelligence can either make a billion dollars or destroy the world.

In our economic prosperity, we must strive toward creating a sustainable existence or else the end of our lives and our children’s lives will be years of difficulty and sacrifice.

Academic education is important, but at all but the best schools, an academic education will not give one the knowledge needed to be financially prosperous. As Thomas J. Stanley states in The Millionaire Mind, having a 1000 or 1500 on your SATs has no correlation to your likely net worth in twenty years. Just as important, if not more, is one’s education and learning outside the classroom.

If one is going to become extraordinarily wealthy they better have integrity, ethics, and keep their accounting truthful and accurate.

The world is going to change in tremendous ways over our lifetime.

Competitive market economies are essential to a high standard of living. An incentive system is necessary to get workers to work and a price system is necessary to properly allocate a limited supply of resources and goods. Competition is necessary to keep everyone honest and working efficiently to produce the optimum output with the minimum input. Although some believe capitalism creates inequities and is immoral, it is a few of the participants within this system that cause these unfair inequities. This lack of integrity among some participants will always be present. However, due to intelligent laws, regulations, oversight and the inherent positive properties of the market coupled with democracy such as transparency, freedom of the press, and a better educated proletariat this ethical problem is better now than in the days of centralized ownership of resources and dictatorships. Since there is no incentive to earn a profit or innovate, state-owned enterprises often breed inefficiency.

However, without honest, ethical, and compassionate people at the helm of a democratic and market system, or the proper laws and legal institutions to ensure this integrity, this system is no better than totalitarianism, autarky, or anarchy. Further, we must always take principle number three into account.

For prosperity to spread to developing countries we must not look to short run elixirs. It took 175 years to turn the U.S. into an economic superpower. The same change cannot take place in Somalia, Zimbabwe, or Afghanistan without the proper development of human capital, industrial capital, and a fundamental legal framework.

It is not he who works the hardest that succeeds; it is he who has the best ideas, works with the most intelligence, and builds the right team to help him accomplish his goals.

The ability to adapt to change and ability to learn quickly is as important as what you know right now.

Those that do not grasp these principles will have a hard time becoming successful or building a prosperous business. While the large majority of American youth do not (at least yet) have the faintest idea of what these principles are or what they mean, there is a growing minority that does. While progress is being made with the help of organizations such as Junior Achievement, the public secondary educational system of the United States, in many places, at times seems that instead of teaching the above principles it is teaching students to be provincial, closed-minded, economically-challenged, and financially inept. It almost seems if students in the American education system are taught from 1 st through 12 th grade to believe that the U.S. is the only country in the world, the only one that matters, and that our goal after we leave school should be to search for a secure well-paying job. These ideas will not produce the dynamic innovators and leaders needed to tackle the problems of this new century.

However, there is a growing minority of youth in the U.S. that does understand the world, globalization, a bit of history, and the basic concepts of business and economics. More importantly, the eighties generation throughout most of the rest of the world is not so provincial. On my 2000 Ruta Quetzal Expedition I was embarrassed to only know two languages. Most of the participants, all just fifteen and sixteen like I, knew at least four languages, and some knew as many as six. They not only knew the languages, but they understood the culture of whomever they were speaking with, whether they were Japanese, Swedish, Colombian, American, or Malaysian. The world is growing smaller by the day, and anyone who does not understand world culture, speak another language, or grasp globalization will have a glass ceiling in their profession, in their life, and in their business.

There has been some great progress on this front recently. Books such as The World is Flat and The Lexus and the Olive Tree by Thomas L. Friedman, The Commanding Heights by Daniel Yergin and Joseph Stanislaw, Rich Dad’s Guide to Investing by Robert T. Kiyosaki, Globalization and Its Discontents by Joseph E. Stiglitz, and Reinventing the Bazaar by John McMillan enlighten us all.

This new breed of entrepreneurs did not grow up with 15% inflation, the Commodore 64, or Ronald Reagan (although I did love to play my Space Invaders game on my used Atari when very young). Instead, we have grown up with Nintendo and Sega Genesis, MTV, Bill Clinton, the World Trade Center attack, and most importantly, the Internet.

I was eleven, not twelve and not thirteen, but eleven. It was 1995 and I was helping people who were 40, 50, 60, 70, 80, and 90 learn to use their computer, send emails, browse the web, and write a letter without a typewriter. More often it is the four year old that is teaching her dad how to attach a picture to an email, or the seven year old showing his uncle how to burn a CD, than the other way round.

Right now I am 21. Anyone my age or younger will understand what I am about to say. I do not know what the world was like before the Internet. Let me repeat this—I do not know what the world was like before the Internet. Yes, yes, of course I have memories before 1994, but to be honest I really didn’t understand how the world worked back then. I did not read the paper too often then and only rarely watched Tom Brokaw or Dan Rather. I have grown up to know routers, Intranets, FTP access codes, HTML, and ecommerce.

This new breed of entrepreneurs; the investment bankers, analysts, economists, options traders, politicians, business owners, leaders, and entrepreneurs of 2005-2065, understand technology and they use it every hour of their waking lives.

We understand the above eleven principles. We know we live in a global interconnected village. We know the government will likely not be able to take care of us in old age. We know we must be responsible for our education and our financial well-being. We know that there is extreme suffering, sacrifice, and corruption in many parts of this world that will not cease unless we do something about it. We understand technology and understand the changes that have taken place in business and the business and economic lessons that have been taught to us over the past five years. In order to build a successful business you will need to understand these things.

This new breed will not be a typical, usual group. As long as we can avoid collapse in the Middle East and Southern Asia, a third world war, and protect the enlightened world from the destructive plans of those whose motives may be well-meaning but whose beliefs are based on half-truths and death, the world is our oyster. Who is to say that my generation cannot develop a more effective way at ensuring essential nutrients and enough food gets to those in need? Who is to say that we cannot double the standard of living in my lifetime or consign absolute poverty in developing nations to the dustbin of history?

This new generation is already doing remarkable things. Just read this excerpt from the May 29, 2002 issue of Business Week:

Never before have teens had the know-how, the access, and the tools at their disposal to pursue business on an equal footing with adults. The number of teens doing some kind of business on the Net is already a lot bigger than many grownups would ever expect. For every teen millionaire, there is a veritable swarm of regular kids who routinely earn pocket money doing software work via the Net. It's impossible to pinpoint exact numbers, but they are large. Researcher Computer Economics Inc. in Carlsbad, Calif., estimates that 8% of all teens, about 1.6 million in the U.S., are making at least some money on the Net. ''There's not a period in history where we've seen such a plethora of young entrepreneurs,'' says Nancy F. Koehn, associate professor of business administration at Harvard Business School.

The article goes on to talk about teen entrepreneurs that have made hundreds of thousands or millions of dollars over the past six years by creating popular web sites, developing software programs, and consulting for businesses. Personally, in my own work with the Carolina Entrepreneurship Club and the Collegiate Entrepreneurs Organization I have come into contact with many fellow young entrepreneurs. It seems to me that many in our generation surely do understand the great opportunity we have and the special time we are in. No matter what your age is, if you can learn these same principles we have learned, you will greatly increase your chances at building a successful business.

In the coming decades, new leaders will appear who have grown up with technology being a part of their lives for as long as they can remember. This new generation will intrinsically understand the principles of a global world and be much more effective in building successful companies than any person who does not. Whether or not you are in this generation, you better understand these principles.

In 2005, I was named as one of the “Top 25 Entrepreneurs Under 25” by Business Week. Every single one of these entrepreneurs was born in the 80s and is part of this Third Generation of Tech Entrepreneurs. I hope you’ll get to know us. We’ll be around for quite some time and we’ll have an unprecedented opportunity to affect positive change in our world and society for the next six decades through both traditional and social entrepreneurship. I think I know us well enough to be confident we’ll not let the opportunity pass us by.

Posted by ryanallis at January 22, 2006 12:02 AM