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New Normal

April 26th, 2003 · No Comments

Fast Company has an article about superstar investor Roger McNamee, contrasting the “old normal” with the “new normal” in the context of investing and competing (link via Abhay Bhagat):

Old Normal: Internet Time: Measured in days, weeks, and dog years (for the business cycle). Absolutely everything was accelerated, from hiring to going public. Eighteen months was the magic number for major undertakings, from startup to ship, from funding to IPO. The bumper sticker was, “Stop for lunch and you are lunch.” Says McNamee: “It was a kind of hormonal reaction. There was so much urgency that every standard — for due diligence, leadership, recruiting, and investment — was relaxed.”

New Normal: Real Time: “The New Normal,” says McNamee, “is about real life — and real time. Getting things right the first time is more important than getting things done quickly.” That’s the opposite of the late-’90s mantra, “Fail faster to succeed sooner.” Everything — whether it be building companies or hiring top talent — takes longer in the New Normal. Even more important in the new time frame: Don’t waste your own time. Dedicate it to what you truly enjoy doing.

Old Normal: Grow Market Cap: The ’90s were all about fast money. Capital was quickly available and virtually free to businesses growing at exponential rates. (And it didn’t matter what was growing. Any metric would do: eyeballs, page views, or click throughs.) The logic was, spend to grow.

New Normal: Create Real Value: Today, it’s all about smart money. Capital is expensive, but it’s available to truly committed entrepreneurs who have rigorously developed business plans that demonstrate real positives in the near term. In the late ’90s, customers got a free ride, and capital underwrote everything. The new logic is, pay as you go.

Tags: Management

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