Our firm’s current business model was created in response to the convergence of three major forces:
The financial crisis of 2008-2010. The Dodd-Frank Bill and Basel III have made clear that financing would be harder to obtain than in the prior 30 years, and that there was no returning to the easy money days of the past, in any market. A side-effect of the financial crisis is the now ubiquitous lean enterprise. Companies cut fat and into muscle to survive the financial crisis. These two outcomes have adversely affected merger and acquisition activity and the ability to raise capital.
The ever increasing rate of technological change. Disruptive technologies are increasingly common, and will only increase in frequency. As Moore’s Law continues for the next 20 years, machine learning will further accelerate the rate of change as machines teach machines, making predictions increasingly difficult as we approach a technological singularity. The world of Alvin Toffler’s 1970 book “Future Shock”, has arrived.
Social networking and the elimination of microeconomic ‘transaction costs’ for information acquisition. The emergence of social networking is transforming how work is done. We are going from an era where only a small elite had access to information to where everyone can have access to all the world’s information. The supply chain is being commoditized as even small business can source products and labor globally. The quality of information has improved as individuals can pull information of their choosing, rather than having valueless information pushed at them. Small enterprises are increasingly becoming the David that can slay Goliath, as information becomes virtually free and available at one’s fingertips.
Over the last three decades, American industry has moved from an Industrial Era manufacturing base to a Knowledge Era economy. Many institutions and methodologies have not kept up with the changes, including investment banks.
Business owners will be challenged to understand the consumers and technologies of tomorrow. 40% of employees ages 19 to 32 would rather take a job with less pay than work where they don’t have access to social media on their smartphone. The velocity of change will increase, driving the need to constantly shorten the development time between iterations of product designs, marketing messages, and business models. The management of information in ever-faster ways will be a key to competitiveness.
Our firm was structured to capitalize on the newest technologies and flexibly adapt to future developments. Our goal is to guide companies through the increasingly disruptive changes of the Knowledge Era, including assisting them in becoming anti-fragile, as conceived by Nassim Nicholas Taleb.
We foresee that integrity will be more valuable than ever as reputations become virtually transparent due to social media. Integrity and forthrightness are central tenants of our creation: integrity is akin to telling the truth, forthrightness is telling someone what they need to know, not just giving truthful answers to what they ask.
We act as though all that we do is public information. We believe this serves our clients well.