By Working Woman
“The web is more a social creation, than a technical one. I designed it for a social effect-to help people work together-and not as a technical toy. The ultimate goal of the web is to support and improve our weblike existence in the world.”
Tim Berners Lee (Slide 65).
One man’s vision echoes strong years after his creation. Not only did the World Wide Web lay the cornerstone of great new inventions but it also kept its initial objective, of being a social creation, helping people work together. The choice of words is not random, and they are the basis upon which this series of blog posts is structured. The four of us (Abir, Ino, Marilly & Teri) aim to look at how the invention of the internet and the world wide web together with social change have helped shape the new business ecosystem. We will focus on startups, how they came about, what’s different about them in the business world and why we believe that through startups we can summarize all that’s great about digital media and computer mediated communication.
The phenomenon termed as startups, is one which emerged in the information age and a product of the new e-business environment. Why is that? Well, with the surge of the internet there were revolutionary changes taking place regarding the way businesses now handle production, management and economic calculation. To understand how the internet helped shape the new business ecosystem, it is useful to describe how it all began.
By 1993, the internet, a medium which for the first time allowed many- to-many communication, on a global scale at a chosen time had become a global network with 250 web servers. Computer communication networks users reached 16 million in 1995, within just the first year of world wide web’s widespread use and has since, kept rising reaching 3,17 billion in 2015. The 1990’s was an era that saw businesses, as network enterprises. It was the era of “chosen time, high-capacity, high-speed, interactive communication, via data transmission” which was “met by computer communication networks, including the internet” (Castells, 2009, p. 68). It was that realization of the new possibilities this networked model opened companies up to that a large number of businesses start using the internet and the web for conducting business, the termed dot.com companies.
Companies, seized the opportunity the internet offered them, to be organized networks available to suppliers and customers, receiving real time feedback on their products/services, reaching pricing agreements, proceeding with manufacturing and then being able to ship a product directly to the customers. Orders are now being handled automatically and companies are able to offer technical support via the web, to their customers. A large amount of production (i.e manufacturing) becomes outsourced to a network of suppliers, not geographically bound. Employees become connected via company intranets communicating instantly with many others on the same building, or even globally. And those are just a few examples of the changes we see. The real time customer feedback on products, now allows the communication of production errors/flaws and their immediate correction, ending up with a “highly flexible customization” as was termed by ABBs CEO back in 2001. Everything from production to processes is organized around the internet. The new network model gives rise to an open culture, one encouraging innovation, cooperation and reduction in bureaucracy.
Initially, the first startups were associated with the innovative technology necessary to provide internet access, or using the internet to provide services necessary for the new business economy. The trend is booming and here is the real market disruption. Technology led productivity growth is observed and any innovative idea that sounds promising draws capital and investment as its valuation is depended on the anticipated higher value, instead of investment made on established cash flow. The new economy is now characterized by a very volatile stock market, where high risk innovation is financed in return for high growth.
As Castells indicates, the downside comes in the late 2000, early 2001, when what grew to become a financial “bubble,” burst. As there were huge investments made based on the anticipated returns of technological innovation, leading to unrealistic valuation of such companies in the stock market, when this unprecedented expected growth did not materialize, the negative outlook of investors led to more conservative approaches and devaluation of such technologies, thus a downturn of the stock market. The new economy is an economy which is sensitive as it is based on high-risk innovation and market expectations, not on realized profits. As such, it is the perfect environment for startup companies, which are producing disruptive innovation, to flourish.
Still, even at this sensitive stock market, the startup movement hints a positive outlook for the future. To make my point I will go back to the beginning, more specifically to Tim Berner’s Lee vision and state that the web and the internet has indeed given us access to information, products and entrepreneurial ventures never before imagined. And it HAS improved our web like existence, by helping shape our lives, including our professional ones, for the better. Many Greek startups have enabled young entrepreneurs to turn their ideas into new products brought in the market, have led to creation of new markets altogether, supporting local entrepreneurship and local economy. In an economy characterized by a long time recession and immense emigration of young talented minds to other affluent countries, Greece can use more startups and such entrepreneurial culture to aid its economic growth. As Naldi and Picard state, reduced bureaucracy and new forms of financing, lower the cost of starting a startup venture, making it possible for employees or unemployed to start their own venture.
Castells, M. (2009). The internet galaxy. Reflections on the internet, business, and society. New York, NY: Oxford University Press
Diamantaki, K. (2016). MA in digital communication and Social media. Digital media and CMC. Lesson 1 [PowerPoint presentation]
Evolution of a startup company. (n.d). Retrieved from http://www.igrinn.eu/en/services/green-start-up-guide/startups-are-strange-animals/evolution-of-a-startup-company
Naldi, L. & Picard, R. G. (2012). Let’s start an online news site: Opportunities, resources, strategy, and formational myopia in startups. Journal of Media Business Studies, Vol. 9(4), 69-97.
Number of internet users worldwide from 2000 to 2015 (in millions). (n.d). Retrieved from http://www.statista.com/statistics/273018/number-of-internet-users-worldwide/