We could, if we cared to, decompose a business or the sector that contains it in terms that are analogous to the stages of an individual’s lifespan – from childhood to young adulthood to maturity. As in the individual case, each such segment contains its defining characteristics and each sets a tone by which it comes to be understood.
In childhood the enterprise has not yet established its character, but all possibilities lie ahead. The entrepreneur assembles, launches, iterates, adjusts, relaunches, is restless, and the thing that matters most is to grow. Always to grow: even if the body is still frail, even if the individual’s unique talents are still undetermined, even if the final aim is yet undefined, the growth trajectory is essential.
In adolescence a direction has largely been set: a course of study, a career goal, a special skill, a drive, and the muscle tone and mental faculties are formed. In this stage, the business must do more than merely grow – its growth trajectory has by this time actually slowed – and must now develop a system: a mode of governance, a strategy, a thoughtful approach. The body’s complexity has by this time evolved to a state that requires some caution, a management style, a direction and conscientious effort – because mere boundlessness and energy and the scattershot hyperactivity that may serve the child are counterproductive and, almost worse, ridiculous in the young adult.
At the stage of maturity the bets have been placed, the direction that was set in adolescence is now bearing its fruits, and now the bills have – alas – to be paid. The mature business has to provide a return to its creditors and shareholders, has to monitor its finances and guard its assets, and when the time is right should probably think about branching out and planting seeds for new beginnings, new projects, new children. And so it goes.
The Internet segment – and perhaps media more broadly – has gone through the described cycles more visibly than other sectors. Or maybe we consider the evolution more visible because we have watched the Internet’s birth and formative years, leading to the beginnings of its maturity within the span of less than two decades: one generation, if that. This evolution has occurred so rapidly, in fact, that the three distinct life phases described have in some cases overlapped, or even coincided. There has been little chance to enjoy childhood, as it were, before adulthood set in.
I have been drawn into this train of thought while reading some of the recent commentary by the partners at Union Square Ventures – a firm that has been at the center of the Internet evolution since its beginning. While issues associated with emergence and rapid growth are reflected in this weekend’s article on A VC, a very interesting essay about governance, corporate direction, and those subjects associated here with young adulthood, was posted at roughly the same time on the firm’s homepage. And all the while we continue to be reminded about the more mature topics that concern the grownups – cash flows and bills and income and next year’s prospects – in an MBA Mondays series that highlights the accounting and operational aspects of managing a developed enterprise.
In short, we are shown in this overlapping of the subject matter that the web business currently resides at the intersection of the three distinct stages, comprising all three simultaneously but not definable as any one of the three alone. Which is to say, the Internet is past its infancy although still growing, is past its adolescence although still forming its directions, and although the sector is maturing, it is not quite there yet. Matters will probably remain in this state for some time to come, and the sector – with its opportunities – should be assessed accordingly.
