Seize Your Leadership Day: Tech’s Role In The Economic Recovery
by Miki SaxonNormally Saturday is all about multiple links to useful information, but today I have something even more useful.
Every year KG Charles-Harris, EMANIO CEO and founder of M3, attends the Stanford Summit; this is the second year I’ve asked him to share what he learned with you.
I specifically asked that he provide a look at how this premier Silicon Valley gathering saw their role in the coming economic recovery.
As usual, the AlwaysOn Stanford Summit was a breath of fresh air with industry luminaries, entrepreneurs and venture capitalists interacting intensely. The topic on everyone’s minds was, of course, the Grand Recession that the financial industry had brought upon all of us and what would bring us out of it.
One issue was clear in everyone’s minds and that was that the information and computer industries were some of the leading forces that would turn the negative situation into more positive territories. From my point of view as CEO of a software company and leader of a foundation that works with disadvantaged kids, it is clear that innovation and problem solving will be a core factor to bring the US, and the rest of the world, out of recession.
Technology is a two-edged sword and information technology helped create some of the problems.
- The efficiency with which trades are executed in the financial markets;
- the ability to seamlessly package, re-package and syndicate debt; and
- the borderless nature of global finance is all based on computer technology.
As such, tech was a facilitator, not only in the creation of the bubble, but also the in the speed with which it spread from mortgage backed securities to the rest of the economy.
One way or another most people are experiencing the fallout on a global level.
In the same way, it will be due to the possibilities and flexibility of technology that the world will ascend out of “darkness”.
But facilitators are neutral and play both sides, so just as the downturn and bubble were helped along by technology, so the turnaround will happen with the help of technology.
This is what many of us discussed at the AlwaysOn Stanford Summit and I would like to share with you the varied thoughts of three entrepreneurs, Lorenzo Carver, CEO of Liquid Scenarios, Jason Seed, CEO of CVSdude and Renee Blodgett, CEO of Blodgett Communications, on how technology will aid the recovery.
In essence, these three have different takes on the value that technology brings and why tech will facilitate the turnaround.
The first CEO I interviewed was Lorenzo Carver, who has extensive experience in the technology, finance and accounting industries, among others. He has founded several companies, as well as having participated in raising billions of dollars in funding for other companies. He is often sought for his strategic advice by both company leaders and venture capitalists.
At present, his major endeavor is Liquid Scenarios, which minimizes uncertainty for investors in different ventures. They provide the various hardcore financial scenarios that an investor needs to calculate—investment amounts, rounds of financing, time to exit, etc.; the different aspects of modeling the future of an investment beyond what spreadsheets can take you. They have major venture capitalists and other investors as clients.
Lorenzo’s comments on how technology would play a part in the economic recovery were quite insightful. “Tech has already had an effect on the recovery, just like it had in the downturn at the end of the dotcom era. In fact, tech has led us out of the doom and gloom mentality with earnings from Google, Adobe and others being significantly better than expected. This has provided people with hope that organizations are continuing to invest. These are important signals, considering the leadership position that the technology industry has in this country.”
I agree with what he is saying, however, I remain a bit skeptical of the significant optimism that exists in the market today. Considering the significant job losses and the continuing trend of more jobs lost, in addition to the continued credit freeze for both consumers and corporations, it is difficult to imagine that we are as close to a recovery as people believe. A slowing downward trend is not the same as an upward trend.
When I asked Lorenzo about this, he said “Of course, as a business leader I am planning for continued hard times and am finding ways of doing more with less; I believe that this will continue for some time.”
In short, technology has played and will continue to play a significant role, but we are still experiencing a downward trend.
Everyone I spoke with at the Stanford Summit recognizes this and manages accordingly. In this environment it is all about cash management and to the extent technology can aid in this it will continue to be a winner.
Last year I met Guy Marion, Executive Vice President of CVSDude, an enterprising and innovative version control platform, who had traveled all the way from Australia to attend the Summit. CVSDude is the leading worldwide provider of Subversion hosting and developer solutions to distributed teams.
This year I had the pleasure of sitting down with their CEO Jason Seed, who, over this past year, has driven significant progress, including opening offices in Silicon Valley. When asked about how the tech industry is/would contributing to the economic recovery, he was very clear on the major factor technology brings.
“The major benefit of the technology industry is the efficiency it delivers to all organizations. Clearly both efficiency and effectiveness will be the major drivers of an eventual recovery.” Clearly Jason is correct in mentioning this. Since the inception of technology, efficiency and effectiveness have been the drivers of innovation. Clearly, what we are now seeing in the economy is a retrenchment started by finance, but continued by the search for efficiencies and doing things more effectively using technology.
Many of the people laid off in this recession will have their jobs replaced by technology. They and many more will find that to regain employment some level of retraining will be necessary. This is certainly true for many in Detroit, the epicenter of employment losses.
Jason’s company focuses on delivering these efficiencies to global teams of developers, whether they are distributed across large geographic areas or who work in the same office. Regardless, being able to have scalable, reliable, secure systems to manage version control and other software issues is a core enabler of effective development.
Finally, I discuss the role that technology will play in the economic recovery with Rene Blodgett, CEO of Blodgett Communications. I kidded Rene that maybe she was the sister or wife of Henry Blodget, the infamous dotcom stock market analyst from Merrill Lynch. In fact, she’s not related in any way to “Hype” Blodget, despite her involvement in promoting technology companies.
Blodgett Communications partners with clients, getting to know their business in an intimate fashion, in order to differentiate and create thought leadership. Their core expertise focuses on the absolute fact that revenue and sales are always at the forefront of each management team’s objectives, so they develop media strategies that minimize cash outlay while enhancing cash generation.
Rene believes the way technology will lead us out of the recession is through enabling better decision-making. She says, “It is clear that technology enables analysis of data and acquisition of information in a way that gives companies the tools to understand options and reach conclusions in ways that were previously impossible. This is especially true about business intelligence and predictive analytics; companies, like EMANIO, will be at the forefront.”
Thank you, Rene. It is absolutely true that EMANIO is at the forefront of the information and analysis revolution and I am in complete agreement when you say, “It is only through improved decision-making that we will be able to get the economy on an even keel again.”
To summarize,
- Lorenzo believes that tech is already leading us out of the recession and that the “green shoots” that we are seeing are due to the performance of technology in companies or technology stocks’ effect on general sentiment.
- Jason believes that effectiveness and efficiencies driven by technology will lie at the base of a robust recovery.
- Rene’s conviction is that it is better decisions enabled by technology that will differentiate winners from
losers and lead us out of the doldrums.
All our sentiments are valid and interesting, but we’ll have to see how it develops going forward before we can judge how accurate we are.
I can’t wait until next year’s Summit…
Your comments—priceless
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Image credit: nono farahshila on flickr
