Devin Cook, Executive Producer of the MIT Inclusive Innovation Competition
Two years ago, in their groundbreaking book The Second Machine Age, Professor Erik Brynjolfsson, Director, and Andrew McAfee, Co-director, of the MIT Initiative on the Digital Economy, described digital technology’s transformative effect on business, the economy, and society. With productivity, wealth, and profits at historic highs, digital innovation has created unprecedented bounty for a great number of people. However, not all people have shared equally in this prosperity. In economic terms, overall GDP is growing but median incomes since 1999 have actually fallen. While technology has created greater wealth for society and for innovators at an unprecedented pace, changes in our economy are actually leaving many people — especially middle- and base-level earners — worse off.
This is the great economic paradox of our time, yet at the Initiative on the Digital Economy, we know this disparity will not define our future. Rather we are technology optimists, and we believe that the future of work can be better for all. However, we cannot ensure that people will enjoy prosperous working lives, if we just stand by and watch these trends unfold. Thus to celebrate, support, and inspire solutions to this challenge, the MIT IDE launched the Inclusive Innovation Competition (IIC). We will award a total of $1 million in prizes to the world’s most inventive organizations that are enabling more people to fully experience the prosperity of the Second Machine Age.
My best ideas come to me between the hours of 2 and 4 a.m. This is not by design — in fact, I wish it weren’t the case — but, as an entrepreneur, I roll with it. My third child is a terrible sleeper. In her two years, she hasn’t slept through the night once. When she wakes up in the wee hours, and it’s my turn to comfort her, sometimes I can’t fall back asleep. I tiptoe out of the room, flip on my iPad, and work on my new startup.
It’s counterintuitive, but of all the experiences I’ve had over the course of my life — including starting a business incubator, stints in government and at big corporations, and teaching in MBA programs — perhaps the thing that’s prepared me most for entrepreneurship is parenting.
Many words can come to mind: new, exciting, experimental, small, lean, agile, fast. To me, “startup” mostly makes me think of “agile” and “fast.”
In an early stage startup, everybody is focused on the same thing. People are passionate, enthusiastic, hungry for an opportunity to change the world, and they will do whatever it takes to get things done. At a headcount of 5-10 people, coordination comes naturally. There are no legacy processes to slow things down. Without existing customers, the team is free to modify their products and services as they learn more. There is also a shared sense of urgency. So they run fast: because it’s fun, because they can, and because they have to.
When it comes to startup strategies, many entrepreneurs assume there is one optimal path. They may need to experiment or “pivot” initially among alternatives, but once they fix on an ideal strategy they simply need to execute. For example, a startup attempting to commercialize a new technology faces the strategic choice of whether to “go it alone” or cooperate with existing companies. Entrepreneurs are often taught to settle on a single strategy rather than trying to do too many things at once, but for some new ventures it may be advantageous to adopt multiple strategies—sequentially.
A new way to look at strategy involves the concept of a “switchback.” Think of a hill that is too steep to directly climb. An alternative is to proceed diagonally up the grade, eventually reversing direction, similar to mountain trains like the Darjeeling Express. It may seem like a slower path—and may even involve some backtracking—but in the end the climber reaches the top rather than getting stuck when trying to go directly.
This approach can work for entrepreneurs too. If the climb to their ideal commercialization strategy is too steep, they may build a “strategic switchback” in that they initially pursue a different strategy—which would be suboptimal in the long run—but which enables later switching back to their ideal strategy.
This is different from the popular notion of “pivoting,” where the entrepreneur iterates through a series of experiments to find potential approaches to the market. While pivoting involves trying multiple approaches in a trial-and-error fashion, switchbacks depend on the success of the initial strategy—not failure. It’s only when that initial strategy works that the startup is able to switch to its originally preferred strategy.
In today’s economy, the need for global experience and cultural awareness is greater than ever. As a result, global talent swaps are becoming more common. These short-term assignments — where two employees from the same international firm trade positions for less than a year – are predicted to increase by 49 percent in the next two years, according to a PricewaterhouseCoopers report cited in The New York Times.
MIT Sloan has long supported students in gaining this type of global experience, offering a very popular elective course called Global Entrepreneurship Lab (G-Lab) for the last 15 years. It’s similar to a job swap in that it matches teams of MBA students for short-term assignments with startup companies in emerging markets. However, these are full-time second-year MBA students; they are not sent to MIT Sloan by the host company. Students’ incentive for choosing a specific host startup is often to gain hands-on experience in a new function or industry — and in a new country. The function/industry is often different from what they plan to focus on after graduation. The student groups work on an issue for the startup throughout the semester, meshing together as a team while living and working on-site for three weeks at the end of the term.
Mentoring adds another dimension to the job swap concept. Each G-Lab team is assigned a mentor from MIT. The mentors’ role is to help students see how to translate what they have learned from their previous employment and first-year coursework at MIT Sloan into something that will bring lasting value to the host company. The mentor tries to gauge the strengths and vulnerabilities of the team and guide them into becoming a cohesive unit. The mentor also steers the team toward resources and research to get them up to speed to make an impact at the company starting on day one. The companies play an additional mentoring role by matching C-level executives with the student team to provide guidance during their time onsite.