The third wave
Entrepreneurial insights into tomorrow
Description
The Third Wave of the Internet marks a shift from active interaction with the network to a world where internet connectivity is embedded in every aspect of our lives. Initiated in 2016, this wave is characterized by the Internet of Everything, where every device and process across the economy is connected online, creating a massive shift in value. In this era, the Internet transcends traditional tech companies, becoming an integral part of all we do, signaling a move beyond the Internet of Things to a more expansive Internet of Everything.
This integration will redefine technological evolution, as the Internet becomes omnipresent in our daily activities.
Table of contents
01Understanding the third internet wave
In the dynamic landscape of human progress, society has undergone significant transformations, each marked by predominant economic activities and technological breakthroughs. This narrative of change was insightfully captured by futurist Alvin Toffler in his influential works, "Future Shock" and its sequel, "The Third Wave." Toffler's analysis meticulously charts the evolution from an agricultural society, through the industrial age, and into the information age. Each phase signifies a monumental shift in the manner in which humans live, work, and interact. In a parallel vein, the Internet, a fundamental pillar of contemporary civilization, has experienced its own evolutionary journey since its commercial introduction in 1985. As we approach what is being heralded as the Internet's Third Wave, it is evident that we are on the threshold of a new era poised to redefine our engagement with technology and unlock opportunities worth multiple trillions of dollars.
The First Wave of the Internet, which spanned from 1985 to 1999, was characterized by the pioneering efforts of companies such as Cisco, IBM, Apple, and Sun Microsystems. These trailblazers concentrated on constructing the network infrastructure and devices essential for connecting people to the digital world. This era was about establishing the foundational elements, creating access points to the information superhighway, and initiating an era where access to information began to democratize.
Following this foundational period, the Internet transitioned into its Second Wave, lasting from 2000 to 2015. This phase witnessed the rise of the app economy and the mobile revolution, fundamentally altering our interaction with the digital domain. Companies that flourished during this time, including Amazon.com, Facebook, Google, and Snapchat, focused on developing software-as-a-service solutions, social platforms, and e-commerce systems. The Second Wave was about building upon the infrastructure laid down in the First Wave, organizing the digital landscape, and integrating the Internet into daily life.
02Starting a new wave business
In the evolving landscape of the digital era, the Third Wave of the internet is not merely about having superior technology or products. The real champions of this wave will be those who excel in execution and the formation of strategic partnerships. This phase emphasizes the importance of the three P's: Partnership, Policy, and Perseverance. Reflecting on the early days of the internet, establishing an online company was a monumental task. Unlike today, where one can leverage existing digital tools, First Wave companies had to innovate from scratch. They had to create their tools, persuade stakeholders of the internet's potential, and navigate through uncharted territories. America Online (AOL) serves as a prime example of this pioneering spirit. Founded by Steve Case, AOL underwent several transformations, from offering online gaming services to becoming a household name in providing internet services. The company's strategy of mailing millions of CDs to American households was a game-changer, making "You've got mail" a cultural catchphrase. AOL's initial public offering in 1992 marked a significant milestone, setting the stage for its exponential growth. Within a few years, AOL's valuation soared, making it one of the most valuable companies globally.
AOL's journey wasn't without challenges. It faced stiff competition from giants like General Electric, Microsoft, and AT&T, as well as from other internet service providers like Prodigy and CompuServe. Microsoft's entry into the market with MSN forced AOL to adapt its pricing model, which, while increasing user engagement, also raised operational costs. AOL's response to these challenges was to diversify its revenue streams by venturing into online advertising and e-commerce, which eventually paid off. Steve Case, reflecting on AOL's journey, highlights that the lessons from the First Wave are still relevant. The Third Wave will not be about technology alone but about integrating internet-powered efficiencies into every aspect of our lives. This wave will disrupt every industry, requiring entrepreneurs to focus on more than just technological innovation. They will need to navigate complex regulatory environments, form strategic partnerships with industry gatekeepers, and demonstrate unwavering perseverance.
03Thriving in the third wave
In the era of the Third Wave, the economic landscape is undergoing a significant transformation, and with it, the fate of long-standing corporations hangs in the balance. While some may view this period as a threat, the most astute leadership teams recognize it as an opportunity ripe for the taking. The key to success lies in not remaining passive but actively seeking ways to harness the Third Wave to their advantage. The common misconception is that startups are the future and established corporations are remnants of a bygone era. However, this is far from the truth. Large companies are often brimming with talent and resources, consistently innovating and contributing to product development. For instance, in 2014, Johnson & Johnson outspent Google on research and development. Despite the rapid growth in R&D within the software and internet industry, tech companies accounted for less than 10 percent of total corporate R&D at that time, indicating that the most groundbreaking ideas are still emerging from outside the tech sphere.
A prime example of this is the development of self-driving technology. While companies like Google and Uber have received much attention for their work in this area, it's less commonly known that the agricultural sector has been utilizing autonomous tractors for years. John Deere, a company with over two decades of experience in GPS navigation systems for tractors, predates Google's existence. Had John Deere capitalized on this technology by creating a spin-off or licensing it, they could have been at the forefront of Third Wave transportation, a remarkable achievement for a company with a two-century legacy.
To effectively navigate the Third Wave, companies should adopt the following strategies: Firstly, developing the right mindset is crucial. Acknowledging the changing world and being willing to adapt is essential. A positive outlook on these changes can inspire and motivate the workforce. Secondly, fostering innovation within the company is vital. This can be achieved by hiring innovators and supporting the creative minds already present within the organization, providing them with the necessary resources to experiment and innovate. Thirdly, companies should embrace self-disruption. They must actively seek ways to add value for their customers, even if it means disrupting their most profitable products. Amazon serves as a model for this approach, having disrupted its own book-selling business with the introduction of ebooks.
Related books
