November 15, 2007

The YouTubbing of Entrepreneurship

In my previous post I referred to the YouTubing of Mass media, the effect of YouTube (and of course of other similar user content exchange sites) on the way the traditional mass media are transforming their business model and actually competing with the video and photograph exchange sites for original photos or video footage made by people who filmed or mare a photo of exciting events with their mobile telephone.

Talking to young entrepreneurs - mostly active in the high-tech / Internet domain - it surprises me to hear regularly that their only ambition creating a new business is to sell it as soon as it becomes interesting to some competitor or investor. In other words the dream of many new entrepreneurs is to repeat the story of YouTube (and many others like Skype, PayPal and Flickr to mention only the recent ones) that made their owners rich overnight after their takeovers by Internet giants like ebay, Yahoo or Google. This is of course nothing new in the Internet world, in the 90s we had many more of such extravagant takeovers of dot.coms that proved to be nothing more than hot air.

It seems that the effects of YouTube on the way young entrepreneurs look to the future of their business are indicative of the new business ethics and ambitions of the information age. Instead of vision the quick buck, instead of strategy just tactics, instead of successful products successful contacts and network.

The problem is that in many cases the new-style entrepreneurs are too fast with the sell-off of their business missing the opportunity to create a really successful business and of course earn a fraction of the money they could earn in this case. A recent example of the very successful Dutch online stock broker ALEX is very interesting in this respect: My Dutch-speaking visitors can read the story in . For non-Dutch speakers a quick summary: ALEX was created by two young entrepreneurs back in 1995 as a telephone broker, in 1999 went online and today is the biggest and most successful Internet broker in Holland. Soon after its creation the company was bought by Bank Labouchere (amount unknown), the two entrepreneurs remained as managers after the takeover. A series of takeovers followed: by DEXIA who sold it to the RABOBANK for approx. 50 mil Euro; finally Rabo sold it a few weeks ago to their biggest competitor online broker in Hollabd BinkBank for an amount of 390 mil Euro. The two original owners are not in the payroll anymore. Were they too fast with selling Alex to Bank Labouchere? I do not know the details of this transaction but for some young entrepreneurs it is better to think twice before they quickly accept the offer.
After all not everyone can sell his brainchild for 1,6 bil US Dollars like YouTube but such news make many people think Why he and not Me?