the new kind of startups

Filed in archive Entrepreneurship on June 10, 2004

Dispatches has an excellent piece about the new breed of startups that are more professional than ever and the new role of global VC.

"The parallel that Anandaram draws between the players in the venture creation ecosystem and the multinational corporation ("MNC") is apt. Increasingly, the core functions of the MNC include (a) raising capital, (b) allocating capital, and (c) managing affiliation networks composed of firms having specialist knowledge and capabilities. My friends Jan Twombly and Jeff Shuman at The Rhythm of Business can attest to the heightened interest among MNC's in how to cultivate the entrepreneur's choreography skills in order to effectively manage affiliation networks. Although the VC's role as choreographer is nothing new, the requisite geographic scope has expanded*."

And he goes on...

"After all these years, it is clear that Adam Smith was right: A well-coordinated team of specialists will kick the butt of the brightest, hardest working generalist. As communication and coordination costs fall, the domains of specialization narrow as their geographic distribution broadens. So, Anandaram is right when he asserts that globalization is inevitable. The real question is what are the implications of globalization to the way startups are organized and managed."