The startup network effect and Al Gore’s gaping hole

In SWSX last weekend I watched a very passionate talk by Al Gore where he spoke mostly about (guess what?) global warming, nicely mixed in with a bit about his book on (guess what?)  global warming, and a bit more about his book and global warming !

His main thesis is that we should put a tax on carbon to ‘internalise the externality’, in economic jargon terms. An externality is where a free market fails to allocate resources according to their true cost or benefit. In other words there are ‘external’ costs or benefits that the system doesn’t cater for so we have market failure. Adam Smith’s invisible hand is hacked.

Of course this theory is not new. The big question is measuring that externality and implementing the right fixes  in tax policy which in practice is no small feat. And doing it without hampering long term growth.

But speaking of externalities – and at SWSX no less ironically – no mention was made by Mr. Gore of the external benefits today’s startups bring to the economy. That if anything is the mother of all externalities and so much more relevant to the audience. Startups today add a hell of a lot more value to the ecosystem than the collective value to their individual stakeholders (employees, customers and shareholders). There is a knock-on effect and a symbiosis, which created a startup community we could have never dreamt of even 5 years agocontinue reading »

The 3 main problems marketplace exist to solve

Businesses exist to solve problems. This weekend I was at SWSXi where I had luck to meet and watch some of the top entrepreneurs in the world talk about the problems they solved, those that they didn’t get round to solving and are fixated on next. And all the while I kept thinking: how does this apply to our business at PeoplePerHour? And more importantly how does that form a coherent step by step strategy to win? And how are we executing towards it?

Below I summarize my thoughts drawing on some of the insight I gathered at SWSXi and applying our experience at PPH to date.

I believe this applies to any marketplace business. The problems we exist to solve are these 3 and in this sequence.

1. Distribution

Marketplaces exist first and foremost to aggregate and distribute content that’s ready for collaborative consumption (whether that’s a display of your spare room on Airbnb, your grandmas hand knitted sweater on Etsy, your unused car on Zipcar, your spare cash on Zopa or your skills and spare time on PeoplePerHour)continue reading »