The Opportunity of Our Lifetimes

Our generation–those born in the 70s, 80s, and 90s–has a great opportunity ahead of ourselves. We have the ability for the first time in human history to eliminate extreme poverty within our lifetimes and ensure shared access to prosperity regardless of color, geography, or nationality. This possibility is worthy of a boisterous cheer.

By 2050, we’re projected to have 9.5B humans on this planet, however. Our planet will not allow a world of 9.5 billion humans living in the manner the average citizen of the Western world lives today, yet alone the 6.6 billion we have today.

Here inlies the great connection between sustainability and poverty. Unless we as a global society invest to develop the needed technologies to allow for humans to become sustainable in food, energy, and water production we will end up having less resources than are necessary for 9.5 billion people to live in a world without extreme poverty–let alone a world in which there is true shared prosperity, mutual security, and equality of opportunity. This is the greatest challenge of our lifetime as entrepreneurs, social entrepreneurs, scientists, technologists, and public servants. We must have sustainability to end poverty.

As a friend of mine from high school recent wrote me, “We must work toward the creation of a world where the standard of living, human rights, basic freedoms, and sustainability are all compatible.”

The two billion people that Goldman Sachs projects will be added to the global middle class by 2030 may never make it if sufficient food, energy, and water resources don’t exist. Dominic Wilson and Raluca Dragusanu, showed in a Goldman Sachs Economic Research paper published on July 8 called “The Expanding Middle: The Exploding World Middle Class and Falling Global Inequality” that close to 70 million people a year are entering the global middle class. They define this range as those with per capital income $6,000 and $30,000, purchasing power parity adjusted. They foresee shifts such as:

1. Changing spending patterns.
2. Increased pressure and competition for resources
3. Greater threat of environmental degradation
4. Rising environmental consciousness
5. Political and social changes

Through one lens, we could have resource wars, strife, famine, and terrible droughts, melting ice caps, biodiversity extinctions, and rising sea levels.

Through the other lens, we could have a world of growing prosperity, security through commerce, and gained respect among cultures and religion, a world of ubiquitous broadband, a world of communications technology that will enable humans to gain a common language and understanding, a world in which dictators can no longer use scare propaganda to wedge the false division of us vs. them, a world in which there is access to education, healthcare, nutrition, and opportunity for all, a world in which entrepreneurship thrives and technology drives improves food production, water access, and non-carbon based energies, a world in which our identity as human is so much more important than what divides us.

We have come to a turning point in history. This is both the challenge of our lifetime, and the great opportunity of our lifetime. How can we enable the great economic and creative potential for all humans while ensuring we leave a world of environmental stability to our grandchildren?

Will we invest in the creation of a new Apollo Plan for Energy? We will create the Global Bill of Rights that provides access to education, healthcare, and nutrition? Or will we fall into a once great society as the benefit of inexpensive petroleum leaves? Will Malthus finally get his way?

Is growing economic prosperity possible in a world of declining resources and increased commodity prices? Does our lifetime end up being marked in history as the time of resource wars, increased poverty, and environmental damage? Or does it end up being marked by global collaboration, shared prosperity, and sustainability. We have a choice.

This is the greatest opportunity of our lifetime, and our greatest challenge.

Sustainable Capitalism and The Role of Aid vs. Trade in Prosperity Creation

I picked up a glossy investment prospectus from a firm called Legatum Group at up at the Fortune Brainstorm Tech conference today. A statement inside caught my eye. It stated:

“While aid can play an important role in alleviating immediate needs, its impact is naturally limited since it is neither sustainable nor scalable.” Seperately, it states, “Quite distinct from the limited scope of charitable initiatives, businesses are both self-sustaining and scalable. Legatum directs its attention towards promoting entrepreneurship and business for all its social benefits within developing communities.”

I wanted to to take a chance to think more about the nuance of the right type of aid vs. the right type of trade and investment.

I feel presently that the answer to reducing poverty and increasing access to opportunity and prospectity in developing nations is three fold. The answer is A) for-profit private capital investment into sustainable companies that are socially responsible (or at least not socially irresponsible) AND B) direct “aid with standards” to community-based non-profit organizations run by local social entrepreneurs that are efficiently serving the needs of their communities AND C) efficiently run transparent government that creates and protects a system of law and property rights.

The question that should be asked cannot be as black and white of aid vs. trade. It’s not aid OR trade. It’s accountable aid AND sustainable trade AND efficient goverment. It’s a public/private/community partnership that does not succeed without participation from each sector. The questions that we as a society should be asking is how to make direct aid measurable and accountable AND how to make trade and investment sustainable AND how to make government efficient and transparent.

These methods of human and capital investment are on the spectrum of socially responsible venture philanthropy that builds human capital, infrastructure, and standards of living through education, medicine, nutrition, and technology that enables us to do more with less resources. At the end of the day–all private sector and public sector investment should come back to efficiently serving the needs and desires of the local population in a sustainable manner.

What the answer to prosperity creation seems not to be is the traditional bi-lateral government to government aid (read: loans that local populations will have to pay back to buy our stuff from our companies) nor traditional private capital investment in companies that are not socially responsible and end up hurting local environments. This of course is the very common and very key “aid vs. trade” question that so many like Sachs, Easterly, Collier, Stiglitz, Pralahad, and Gates have debated.

So what is the import of this debate and why is a tech CEO talking about it? The great war of ideas of the 19th and 20th Century between pure communism (total state control of the economic sector) and pure capitalism (total market control of of the economic sector) is giving way to an “end of history” state that could be simply called “Sustainable Capitalism.”

Sustainable Capitalism could be defined as a state in which competitive market economies that are based on environmental sustainability, democracy, transparency, communication technology, an educated populace, and a government with a limited but very important role in setting the rule of law, thrive while efficient social entrepreneurs with services that produce a public good are invested in with capital with measured returns and public servants integrate the same communication and ERP systems of the best-run companies in the world.

In this new Zakarian model of economic system, companies that destroy the environment, provide a negative net benefit through off-balance sheet externalities, or exploit their populations are video blogged and written about and pressured through market forces to reform or wither. This is perhaps somewhat idealist today–but it is the path I believe we are on. The fact that all companies must be sustainable soon enough for the system to scale and prosperity to be possible for all humans is clear. This trend will accelerate as we enter into the coming age of ubiquitous broadband and improved technology of the citizen blogger and as resources become less available. Governments, non-profits, and businesses will have a much higher level of accountability. This assumes of course people have incentives to work toward shared prosperity that can continue beyond the short-term, and I think that is a fair assumption and a vision shared by the global connected youth of today that I know.

What’s the common denominator for human invesment in either the public or private sector? Return on invested capital, as long as the definition of return is broadened to include social returns and the definition of cost is broadened to include environmental degradation. This is the Net Domestic Product (NDP) approach versus the Gross Domestic Product (GDP) approach.

So am I criticizing the Legatum brochure statement? No, not really–I just hope they share the belief–and I am sure they do–that prosperity in the developing world and continued sustainable improvement can only be possible if we find methods to enable entrepreneurs, social entrepreneurs, and public service entrepreneurs to transparently, efficiently, and sustainably make investments that maximize individual utility, return on investment, and the public good.

The effort toward sustainable capitalism and efficient government requires an improved ability to communicate, collaborate, and measure results. There’s a digital generation of entrepreneurs and social entrepreneurs that gets this who will be the global leaders sooner than you might imagine.

The Superficial Luxurious Degeneration of America?

I’m in Las Vegas for the second time about to get on the plane home. I was here for a web marketing conference called PubCon. I’ve enjoyed my time here. I saw the Blue Man Group and the Wayne Brady Show. I also did the all-American thing and lost $100 at the blackjack tables after a poorly executed Martingale strategy on the $5 tables at the Sahara. I leave, however, feeling the same way I felt last time–a bit dirty, a bit uncomfortable.

I’m disappointed with the excess and waste of the Westernized luxury culture. Wealthy men with fake-as-can-be paid escorts on each arm at the $5000 per hand blackjack tables, faux-venetian canal boats, Rolex, Prada, Burberry, and Louis Vuitton stores galore, Ferrari and Maybach dealerships, swinger clubs with $65 entrance fees, men on the streets passing out cards with naked women available for between $35 and $150.

I wonder to myself–Does this city in many ways represent a key part of what is wrong with our culture or a key part of the freedom that causes it to thrive? I am as pro-competitive market economy as the next guy, but I have to wonder what role do super-luxury goods play in a just society. I’m not talking about the $200 purses or $40,000 cars–the splurges that perhaps are bad within the realm of defensible-reason in moderation for quality or happiness-inducing reasons. I’m talking about the $10,000 purses and $500,000 cars.

I was taught in my economics education that societies should work to maximize utility. But whose utility does it maximize to spend $75,000 on a diamond necklace in which the original diamond miners in the DRC were paid $10 to mine the raw materials for? The purchasers? What benefit could the male purchaser of a diamond necklace of this cost gain other than the ephemeral loyalty of an ever-expecting superficial person? It is not my place to judge or question their morality, but I must wonder.

Are there not so so so many better things to invest money into other than temporarily attractive fake parasitic members of the opposite gender? And trust me, I’m not talking about women in general, just a very specific type of women that happen to be all over Las Vegas and Beverly Hills. And some wealthy women are just as guilty as the wealthy men. If the advertising and celebrity indoctrinated culture of spend-and-trash materialism didn’t create false desires to ‘be better’ and ‘have more’ could we perhaps focus our investments on something that actually matters to our society?

Could we focus our efforts and funds instead on education, healthcare, and nourishment for the 26 million children who die every day on our highly-optimized six-sigma logistically perfected world from preventable disease and starvation? I’m not talking about giving questionable ideology-inspired bilateral or multilateral aid to dictatorial governments that don’t represent their populace. I’m talking about giving directly to proven projects in our community, country, and world run by local entrepreneurs through groups like GlobalGiving, Kiva, UNICEF, UNESCO, Doctors Without Borders, Heffer International, and Save the Children. Could awareness of the dire situation of so many of our fellow sisters and brothers reduce the demand to waste money on super-expensive non-necessary junk?

But then I came back to questioning myself. What right do I have to question the utility-maximizing choices of ultra-rich people? If they want to spend 1% of their income on a $500,000 car, shouldn’t they be able to? Isn’t the freedom to do just that an ingrained part of our American culture? Is it fascist to even suggest that we should create a society in which it would not be legal to buy a $500,000 car?

I have to agree–we should not make it illegal to buy a $500,000 car or a $10,000 purse. That wouldn’t jibe with the values of our liberty-based democratic republic and market economy regardless of how wrong or wasteful it may be. Our country was also built on the value of equality of opportunity, however. And equality of opportunity surely does not exist quite yet in America.

So perhaps instead of regulating the supply side of the equation we should work on reducing the demand side of the equation. If we can create a consciousness of the realities in our world today–and create a shared awareness of what is actually important (family, friends, health, laughter, memories, the ability to create, a sense of shared humanity, an end to genocide and warfare, environmental sustainability, an end to extreme poverty and hunger, and the prevention of preventable diseases), we may be able to create a world in which the super-luxury wastefulness of the Westernized Vegases, Macaus, and Dubais can legally exist, but end up being destinations that focus on entertainment rather than superficial luxurious waste. Is possible to have entertainment without super-luxurious waste? I think so. Is it unrealistic to attempt to reduce the demand side if we agree we should not regulate the supply side? Can a committed society actually build national human consciousness over a period of decades? I am not sure.

I sometimes wonder, is celebrity culture actually more interesting than the natural drama of the future of the world? I see lots of Entertainment Tonight shows but very few United Nations Tonight shows. Maybe the issue is how the news is presented. Perhaps we need to popularize and dramatize the storylines of the world’s future. Perhaps we need a new form of realtainment that combines The National Enquirer with The Economist. ‘Pakistani Inflation Worry’ turns into ‘Smack-Down Out East: Will Musharref Bodyslam His Central Banker?’ The Current Channel on cable has done a good job at this–but it just doesn’t reach enough people.

With all due respect to Nickelback, at the end of the day who really wants to be drugged up rockstars living in hilltop houses and driving fifteen cars with girls coming easy and the drugs coming cheap? I don’t want a brand new house on an episode of Cribs nor a bathroom I can play baseball in with a king size tub big enough for ten plus me. I think, and I may be wrong here, that the large majority of people want to be happy with friends and family around them and the knowledge that they’ve made a difference in our world.

The government, businesses, and the media tells us to ‘be American’ and buy, buy, buy. The goods end up quickly in landfills. Until the full cost of producing products is internalized instead of externalized in the Generally Accepted Accounting Principles we will be incented by misaligned priorities. Hurricane Katrina was a terrible disaster that had an immense human and environmental effect–and yet it increased our GDP due to the cost of rebuilding. That wasn’t economic growth–that was economic recovery. We’re adding revenue to our asset column without first subtracting the associated expenses from the liabilities. We’re off-balance sheet financing our future.

As a final thought, perhaps we shouldn’t focus on Gross Domestic Product (GDP) but rather Net Domestic Product (NDP), the GDP minus the costs to replace the non-renewable environmental resources that are used up in producing the input goods and final goods. If we invested in companies on the NASDAQ and NYSE based on their EAARC (earnings after all real costs) instead of their EBITDA we would be a lot closer to having a market that valued companies appropriately based on their contribution to their customers and society.

I’ll end this essay with a quote from the comedian George Carlin. While I enjoy living in the fast paced globalized technology-driven business world as much as anyone—I agree with his core message…

The paradox of our time in history is that we have taller buildings but shorter tempers, wider freeways but narrower viewpoints. We spend more, but have less, we buy more, but enjoy less. We have bigger houses and smaller families, more conveniences, but less time. We have more degrees but less sense, more knowledge, but less judgment, more experts, yet more problems, more medicine, but less wellness. We drink too much, smoke too much, spend too recklessly, laugh too little, drive too fast, get too angry, stay up too late, get up too tired, read too little, watch TV too much, and pray too seldom. We have multiplied our possessions, but reduced our values.

We talk too much, love too seldom, and hate too often. We’ve learned how to make a living, but not a life. We’ve added years to life not life to years. We’ve been all the way to the moon and back, but have trouble crossing the street to meet a new neighbor. We conquered outer space but not inner space. We’ve done larger things, but not better things. We’ve cleaned up the air, but polluted the soul. We’ve conquered the atom, but not our prejudice. We write more, but learn less. We plan more, but accomplish less. We’ve learned to rush, but not to wait. We build more computers to hold more information, to produce more copies than ever, but we communicate less and less.

These are the times of fast foods and slow digestion, big men and small character, steep profits and shallow relationships. These are the days of two incomes but more divorce, fancier houses, but broken homes. These are days of quick trips, disposable diapers, throwaway morality, one night stands, overweight bodies, and pills that do everything from cheer, to quiet, to kill. It is a time when there is much in the showroom window and nothing in the stockroom. Give time to love, give time to speak! And give time to share the precious thoughts in your mind.

Giving Back As an Enlightened Entrepreneur - Book Excerpt

Below is an excerpt on Giving Back from the updated version of Zero to One Million, coming out in February through McGraw Hill…

Giving Back

I did an exercise when I was 20 years old that changed my life forever. I wrote down how I wanted to use my life to make a difference in the world—to help build stronger communities and societies here at home, and also work to end poverty and hunger globally. When I learned from reading an annual world health report from the World Health Organization that over 18,000,000 people die every year (49,365 per day) from preventable diseases and starvation the gravity of some of the most important issues of our day hit me.

When I learned from a World Bank report that as of 2001, 2.7 billion people lived on under $2 per day (42% of the humans in the world), the realization made me want to spend my life working entrepreneurially to address these issues. When I read The End of Poverty, by Columbia Economist Jeffrey Sachs in 2006, I further committed to being a leader of my generation to address the problems and ensuring that by the end of my life at least 95% of the wealth I create goes back to creating societies with greater access to opportunity and sustainably assisting people who have not had the opportunity I have been so fortunate to have.

As I added to my knowledge through travel, reading, and speaking with people who live in developing nations, I updated my mission statement and began to write what I call a Purpose Statement. Along the way, the added depth of purpose has given what I strive to do every day deep personal meaning. For me, entrepreneurship is not about making lots of money and living an extravagant life, it’s about being able to make a positive impact in the lives of thousands, and hopefully someday, billions. If you can find how starting and building a successful business can help you have a larger meaning in your life and allow you to give back to your community, you will be able to more easily find your core motivation and align what you do, with what you love.

Finding a deeper meaning and core motivation for doing what you do is a critically important part of getting through the difficult times along the way to becoming a successful businessperson. I have found this meaning for myself. As I wrote in the introduction to this book my Purpose Statement is:

I wish to spend my life working through entrepreneurship, social entrepreneurship, investing, philanthropy, public policy, and politics to end poverty in developing nations and at home, ensure environmental sustainability, help people understand that we are one humanity and that our commonalities are much greater than our differences, and help expand access to opportunity, healthcare, and education across the world for every human of every nation.

Right now, please take a moment to write down how you hope to use your talents, resources, and time on this planet to make a positive difference in the world. This can be a powerful exercise, so please take a couple minutes to complete it.

Action Item 11 – Finding Deeper Purpose in Your Life

Take a moment and write how you hope to use your business, time, energy, and resources to make a positive difference in the world. I wish to spend my life… ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________ ______________________________________________________

Many extremely successful industrialists and entrepreneurs over the past 150 years have chosen to give back. Andrew Carnegie funded libraries all over the United States and created his foundation to ‘promote the advancement and diffusion of knowledge and understanding.’ Rockefeller created the Rockefeller foundation to ‘promote the well-being of mankind throughout the world.’ Ford created the Ford Foundation to ‘promote democracy, reduce poverty, promote international understanding, and advance human achievement.’ Bill Gates has created the Bill and Melinda Gates Foundation to ‘enhance global healthcare and reduce global poverty and expand access to educational opportunity and technology.’ Gates has said many times that he will give 95% of his wealth back to society before he dies. He considers himself a steward of wealth, as should any successful entrepreneur.

As an entrepreneur, score is kept by who can create the most value. Money comes to you directly in proportion to how much value you create by rearranging the resources of land, labor, capital, and entrepreneurial ability into the outputs that society desires. If we are successful, we can create millions, perhaps billions of dollars of value to society and in turn become wealth through stock appreciation, going public, or selling the company.

I hope you will give back as well what you can, along the way as you build your company—and especially after you have become wealthy. It is our job as enlightened entrepreneurs to give back to the society and world that has enabled us to succeed, to work to create fuller access to opportunity. Giving back can make our lives full of meaning and purpose, and make us more driven entrepreneurs at the same time.

I know if you set your mind to it you will become an extremely wealthy individual and make millions of dollars in your life. You may not see the way now, but if you commit to the goal and believe it, you will achieve it in time. It may take ten or twenty years, but if you choose to be, you will become a multi-millionaire. Knowing that you will become a multi-millionaire someday if you make the choice to be, I ask right now that you commit to contributing at least 90% of any wealth you make by the end of your life into a foundation or endowment of a charitable organization that can work to make our world a better place.

Action Item 12 – The Enlightened Entrepreneur’s Commitment

I, _______________ _________________ commit to contributing at least ninety percent of any wealth I earn during my lifetime into a personal foundation or endowments of charitable organizations that will work to address the major issues of our world such as poverty, hunger, education, healthcare, environmental sustainability and any other area that I believe will make the world, my nation, my state, and my community a better place. X __________________________________ Date: ____________

Dot Com Crash 2.0? What’s Fundamentally Different This Time Around

A couple weeks ago my business partner in IntelliContact, Aaron Houghton, asked me via email what I thought about the Squidoo concept–Seth Godin’s new web site that allows users to create "lenses" of high-quality content on every conceivable topic while sharing ad revenue with content contributors or the charity of their choice. I replied to Aaron that I thought the idea was "Rather brilliant. Make money off of adsense from hi-quality user generated content. Not sure how they’re doing, but ran into the idea about 8 months ago." Aaron responded to my email with:

"I agree, the concept is great. The proof will be in the value actually created for advertisers, which may be good but it of course is yet to be determined. If he can simply get a critical mass of users and visits we both know someone will buy it or sign a huge ad contract with the site. Isn’t this the exact premise behind the dot com crash, visitors = success… and all of these business are back in that battle again, and VCs are funding them. What’s different now? Is Google Adwords good enough that it has monetized the web traffic business so effectively that .com model businesses can now thrive? If so, what really caused the bubble to burst? It wasn’t a lack of advertising options. Was it simply missing the concept of targeted conceptual advertising which actually drives advertiser value, or has consumer and business spending increased so much online that it’s now viable for the first time?"

Aaron was asking a key question–what is it that is so different now with the web that is going to allow these web 2.0 services to actually generate real revenue and provide real value to users, measurable return to advertisers, and a smart acquisition for acquirers? As the CEO of a Web 2.0 software company, the answer to this question certainly interested me. Further, as the author of an article on the causes of the Dot Com Crash back in 2003, I thought it might be time to take a new look at the question. So here was my response to Aaron:

So what’s different this time around? Here’s my take:

1. The Internet has more than 3 times as many users. In March 2000 the Internet had 304 million users according to Internet World Stats and Nua Ltd. As of June 2006 the Internet had 1.043 billion users.
2. We’re all on broadband now. According to Nielsen/NetRatings, as of February 2003, only 33% of U.S. Internet users were on a Broadband connection. This number increased to 68% as of February 2006.
3. Web technologies are developing that are making sites/web tools more useful or interesting causing people spend a lot more time online including services like MySpace, Facebook, YouTube, MetaCafe, Meetup, LinkedIn, BoingBoing, Digg, Flickr, Squidoo, and Xanga. In the same Nielsen/NetRatings report linked to above they noted time spent online increased from 51 minutes per day to 61 minutes per day between February 2003 and February 2006.
4. There are developed ad networks like Adwords, Miva, MSN Ad Center, Yahoo Search Marketing, and Federated Media that have large enough scale to make it easy for anyone to get targeted, well paying advertisers with just two lines of code.

The web is finally ready to grow up.

After reading this response, Aaron added an additional insight:

5. The average American Internet user did not trust the Web enough to place frequent large purchases online. Think about how few banks had online banking during the bubble era, that’s the most basic of trust extensions for the average consumer and it wasn’t even close to mainstream then. Trust is one of the primary pillars of web 2.0. The mainstream consumer didn’t inherently trust Web sites in 2000, now they do. So, the mainstream consumer was dumping money in their personal stock portfolio into web companies but was unwilling to buy a product from one of these company’s sites because they didn’t trust buying from the company online.

So there you have it–five reasons why the Web is just that little bit more resilient now that are allowing e-retailers, web-based services, and social networking sites to generate real critical mass sufficient to actually create sustainable business models. Don’t get me wrong, the fact that there is a lot less media hype, much smarter individual investors who remember getting burned just a few years ago, and more experienced management teams that realize they actually have to generate revenue and eventually profits somehow is certainly helping as well. But the significant growth in the scale, depth, speed, usefulness, and ease of the Internet has been critical and is today making the web startup a fun place to work again with a real chance of getting acquired or going public one day and making a $580 million price tag for MySpace actually seem not too rich at all. Cheers to that!

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:

1. 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.
2. Anyone with $1000 and some intelligence can either make a billion dollars or destroy the world.
3. 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.
4. 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.
5. If one is going to become extraordinarily wealthy they better have integrity, ethics, and keep their accounting truthful and accurate.
6. The world is going to change in tremendous ways over our lifetime.
7. 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.
8. 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.
9. 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.
10. 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.
11. 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.