Venture Hacks

The entrepreneurial age will be as important as the industrial age and the information age.

In the industrial and information ages, we learned how to put physics and information to great use. Physics and information were also the basis for an organization’s differentiation and victory.

In the entrepreneurial age, physics and information will be replaced by entrepreneurship: the ability to serve a customer at the highest level of quality and scale, simultaneously. We will learn to put entrepreneurship to great use and it will be the basis for an organization’s differentiation and victory.

This is not a statement that the winners are going to win. It is a statement that (1) the best strategy is to attempt to deliver the highest quality with the highest scale and (2) other types of differentiation should only be tactics that serve an organization’s entrepreneurial capability.

Differentiation is being commoditized

Physics, information, hardware, software, marketing, press, business development, recruiting, training and every damn thing a business needs to do is quickly becoming available as a service. And innovations by one company are quickly made available to its competitors by other entrepreneurs.

It is no longer effective to rely on any type of differentiation—organizations must focus on delivering the best product in the world to as many people as possible. All other activities just help them on their way.

Scale is getting easier

In the past, scale (low cost, high distribution) was so difficult that organizations with bad products and great scale could win. And it was so difficult to scale the very best products that they never left the boutique.

The challenges of scale are now diminishing rapidly. Scale is now available as a service—see Foxconn (manufacturing), AWS (hosting) or Facebook Platform (distribution).

But scale is not being commoditized

Scale is getting easier and other forms of differentiation are being commoditized. But scale will not be commoditized. It is as important as an organization’s product development capabilities.

Why? Because the best products require unique means of scaling. The delivery of the best products is tied into the product itself. For example, look at Apple’s efforts to develop new manufacturing techniques and stores for its products.

If you don’t scale quality, you will be shut out of the marketplace

Today, it’s too easy to spread the word about the best products to leave any room in the marketplace for merely good products.

The organizations with the greatest entrepreneurial capability will collect the most customers and greatest profit. They will also attract the best talent, who will continue to build the best products, with the greatest distribution and highest profits, which will attract the best talent and so on.

It’s not bad enough that the winner is collecting the greatest profits, it’s also collecting the best talent, leaving competitors without the people it needs to stage a comeback.

The industrial and information revolutions are enabling the entrepreneurial revolution

The continuous improvements in our ability to manipulate physics and information are helping us commoditize every capability on the planet.

These improvements enable entrepreneurs to deliver services to other entrepreneurs—and these services are commoditizing every type of differentiation except product development and delivery.

If you’re interested in building a steam engine for the entrepreneurial age, AngelList is always hiring engineers and designers.

Related: Startups are here to save the world and There is no finish line for entrepreneurs

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For an entrepreneur, if it is possible to make it better, she must make it better. If it is possible to make it more accessible, she must make it more accessible. If it is impossible to make it better or broader, she innovates.

Starting a great Italian restaurant is not entrepreneurship because the proprietors make no attempt to scale it. Running McDonald’s is not entrepreneurship because they make no serious attempt to build a better product. Apple is an entrepreneurial venture because it is in the business of delivering ever-increasing quality at higher scale.

There is no tradeoff between quality and scale

Quality measures how far a product advances the customer. Scale measures how many people use it.

For entrepreneurs, there is no tradeoff between quality and scale. The job is to do both—not one or the other. If it can’t be done, you innovate.

Quality without scale is not entrepreneurship—it is a tree falling in the forest with no one around.

Scale without quality is also not entrepreneurship—it is business as usual. And it leaves businesses exposed to competitors who steal its customers (and, worse, employees).

Anyone who attempts to serve a customer at a new level of quality and scale is an entrepreneur. Anyone who does not, is not.

If you’re interested in helping entrepreneurs never reach the finish line, AngelList is always hiring engineers and designers.

Related: Startups are here to save the world

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“He cares deeply about… the advancement of humankind, and putting the right tools in their hands.”

– Laurene Powell Jobs on her husband, Steve

Startups aren’t here to change the world, they’re here to save the world—by bringing us innovation that advances humankind.

Our universities, labs and garages create enormous amounts of innovation—and there’s more coming every day. Today’s challenge is delivering it to customers in ways that advance humankind.

Super companies

Apple, Google, Facebook and Amazon all deliver innovation at scale: they reliably bring it to the whole world at once. I call them super companies. (And there are many more in information technology, hardware, healthcare and energy.)

It might seem impossibly difficult, but super companies can be built. And the only way they get built is by starting a startup.

Our duty

If super companies are saving the world, and every company started as a startup, then it is our moral duty to remove the frictions along the startup’s way.

That’s our duty at AngelList: to serve the startups that are saving the world. By eliminating the frictions along their way, in the most meaningful way possible.

It is also the duty of every service provider in the startup ecosystem: investors, incubators, advisors, lawyers, recruiters, etc.

Entrepreneurs

If the service provider’s duty is to eliminate the frictions in the startup’s journey, then it is the entrepreneur’s duty to only start companies that can make a meaningful contribution to the advancement of humankind. That means saying no to businesses that are the Internet equivalent of McDonald’s.

And it is our duty as entrepreneurs to never sell, shut down or give up until we’re delivering innovation at scale.

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