Insights from another Internet Entrepreneur

So, I recently had breakfast with a fellow Internet Entrepreneur. He sold his company about 3 years ago for over $400 million. I wanted to hear about his thought process in how he decided what he wanted to do next. It was a great conversation and I really enjoyed his insights. Some of his key decision points included the following:

1. Disruptive businesses are more successful than Improvement businesses
This criteria is based on the notion that truly disruptive businesses either create new markets or completely change the paradigm of that market. His belief is that disruptive businesses have a much stronger foothold and are significantly more successful for a longer period time than a continuous improvement business. This entrepreneur said to me “I am sure there is a better way to do Citysearch.com, but I don’t want to be in that business!”. The issue with improvement businesses is that they are in a constant leapfrogging game with their competitors and that you feel like you are a hamster running in the wheel.

2. Small Businesses are more work than Large Businesses
This entrepreneur and I had a mutual investor in Comcast. Julian Brodsky, who was the Vice Chairman, always had these great insights which you would expect from a man that worked with Ralph Roberts for over 40 years in establishing Comcast as the largest cable company in the U.S. Julian advised this entrepreneur to focus on a business that can scale because larger entities actually require less work to run than running small businesses. You don’t think that makes sense? The best way that Julian explains it is to ask yourself “Who works harder? Ralph Roberts or the Local Dry Cleaner?”. Mr. Roberts had an army of people supporting him and really doesn’t work as hard as the local dry cleaner whose business doesn’t scale to afford him that luxury.

3. We have a 10 Year Window as “Internet Bridge” entrepreneurs
Him and I both started our Internet businesses in 1996. We are in a generation where we grew up and are familiar with a non-Internet/Digital Media world and have been in the center of the transition to what it has become now. We have created businesses that have helped bridge this transition. However, there is a new generation that is coming into this business that has never really been exposed to the “old way” of doing things. And thus, their thinking is untainted and their ideas are going way beyond the “bridge”. They will be the ones that cause disruptions to our businesses. His belief is that we have a window of 10 years where we can still be successful and masters of our domain but after that we are in trouble.

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