November 2017

Last week, the chairman of the Federal Communications Commission announced his intention to eliminate net neutrality in furtherance of the White House’s conviction that Internet access should be an unregulated, private business activity. Many Americans who aren’t tech savvy don’t see this as a big deal. To the contrary, it is a big deal. Their ability to participate in society and the economy is about to get hurt.

To illustrate why this is so, let me analogize to a public benefit that all Americans value: access to electricity.

Imagine that access to electricity was handled the same way that access to the Internet will be under the FCC’s approach. Would you be happy with a situation where your ability to obtain electricity was limited to a single provider who could charge you whatever they wished, offer you whatever service level they thought appropriate, and limit your choice of alternatives?

We all know that electricity comes into your home through a single line owned by an electric company. Because of government regulations and investment, access to electricity is substantially universal around the United States. Innovative companies that provide electricity in new ways can get access to consumers and businesses. Profit is balanced against consumer access.

This didn’t happen by accident. The balancing of the interests of industry and society occurred because in the 20th century a broad societal consensus was reached. Electricity is essential to modern life, and all Americans should have fair access to it. Depending upon the circumstances, sometimes electricity was provided by government entities, sometimes by for-profit companies, and sometimes by cooperatives. Power produced by innovative and cost-efficient producers, such as solar, had to be carried over other companies’ transmission lines so it could reach consumers. The ability of the owners of those transmission lines to maximize profit was balanced against the social good that electricity provided to all.

The analogies to access to the Internet are striking. There are many parts of the United States where access to the Internet is not achievable solely on a for-profit basis, because the population density is too low, the geography too challenging, or the residents too poor. Many Americans with access are finding that they are not able to pay ever-increasing prices. Businesses grow ever more reliant on the Internet. School systems assume that their students have access at home. More and more of the information our citizens need to make informed decisions is delivered over the Internet.

In the second decade of the 21st century, it is becoming abundantly clear that access to the Internet is essential for our nation to grow and our citizens to participate in its abundance. The proposed changes to net neutrality suggest the Trump administration and many in Congress put their faith in the free market to provide the Internet access all Americans must have. Even though I am an investor and businessman, this is a circumstance where I think that this faith is misplaced. Why would for-profit Internet access businesses ever provide services or make investment decisions that aren’t based solely on maximizing profit?

Let’s not fool ourselves for the sake of adherence to ideology. Without some the introduction of other considerations imposed by regulation or government action, the Internet providers will not have any reason to modify their pursuit of maximum profits or provide uneconomic services. They are public companies, not social enterprises. But treating Internet access as a luxury and not a basic right is unfair to our citizens, to our business community, and ultimately to the country as a whole.

In the 19th and 20th centuries, our political leaders recognized that access to electricity required a balancing of commercial and social interests. In light of how essential access to the Internet is to the 21st century citizen, shouldn’t there be a similar balancing?


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I regularly hear people complain that our region lacks venture capital. Last week I asked members of our entrepreneurial community about this perceived funding gap and what they thought we should do about it.

The first thing I learned was that the venture capital funding gap was most profoundly felt when a start-up needed capital to accelerate its climb towards success, what I’ll call “acceleration capital.” The entrepreneurs pointed to many start-ups successfully finding their initial risk capital from friends and families, or smaller venture funds, and raising the first $250,000 to $1 million necessary to get started. They also reminded me of the many innovative companies in our region that have raised hundreds of millions of dollars of venture capital to fund business expansion. They all agreed acceleration venture capital was the hardest to find.

Some thought our start-ups were not perceived as compelling in comparison to those in other regions, so that acceleration capital went elsewhere. Our region didn’t promote itself well, didn’t have a culture of risk taking, or suffered from a heavy focus on service-business models, were each identified by entrepreneurs as potential causes of this competitive disadvantage.

Others didn’t see it as an issue relating to our supply of compelling companies. Ed Barrientos, a long-time angel investor and chief executive of Brazen Technologies, told me he felt “the number of viable start-ups has been relatively constant for the last 15 years.” He thought that the perceived funding void was just a function of “signal to noise” because more companies were starting here than previously, so that there were more businesses competing for the same pool of capital.

Entrepreneurs who had been investors provided the perspective that the acceleration funding gap was a national problem. Gene Riechers, a successful venture investor and former technology executive, pointed to a national consolidation of the venture industry into a smaller number of large funds. This consolidation has forced the venture industry to concentrate on deals that can put a large amount of capital to work quickly – making acceleration deals burdensome and unattractive.

Riechers cautioned against waiting for new VC funds to be raised that would focus on acceleration capital because the industry trends that led to consolidation were likely to continue for a number of years. His advice was to look for acceleration capital elsewhere.

But where?

A few entrepreneurs thought that the region’s wealthy would be a good place to start. Ben Foster, a business mentor and serial entrepreneur, felt that a regional effort in educating local wealth managers and millionaires on the investment opportunities that start-ups present could create new sources of acceleration capital.

Others thought that greater integration with larger regional businesses was the best path – customer revenue could provide growth funding. An example was James Quigley, founder of GoCanvas, an app technology company, who would like to see the business community “engage in the ecosystem and invest.”

Naturally, people raised the role of government in solving the problem, although not as a direct investor. Mirza Baig, a partner in Aldrich Capital and an investor in start-ups, thought state governments should look to trigger acceleration venture capital through economic and tax incentives. Others pointed to the federal government as a source of research-and-development funding that could be leveraged to accelerate high tech companies.

A few also asked whether we should be worrying about venture capital funding to fill this void at all. Mary Tucker, chief executive of UPIC Health, a health care start-up, pointed to the growing number of investors looking to make socially impactful investments, adding that “perhaps the answer is not to focus on the doughnut hole – I’m squarely in it right now – but rather expand and build on social VCs in the region.”

Clearly, we have an issue that is unlikely to go away. I think it’s time to take an entrepreneur’s approach to solving the problem. We’ve identified some potential solutions. Let’s pick one and get started.





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Last week I shared some insights about how leaders rise out of groups and how groups react to bad leadership. A number of people asked me whether I thought the same rules applied to situations where a leader was imposed from above. To gain some insight I asked a local expert. 

Mary Abbajay, chief executive of the Careerstone Group, specializes in organizational change. In connection with an upcoming book, she has been looking at the skills required for followers to successfully manage relationships with leaders they don’t pick. 

Abbajay finds commonality whether a leader rises or is imposed. Followers must be an active participant in the relationship with a leader.  People who are passive and just do what they are told rapidly find themselves disillusioned.

Followers need to create a positive relationship with their leaders. They shouldn’t rely on leaders to do right by them.  nstead they need to manage upward through a conscious and deliberate effort to communicate to those above you in the chain of command.   

This is not an easy thing to do.   

Not every message from a subordinate will be met with openness. Much depends on the willingness of a leader to hear contrary viewpoints. Because it can be a risky proposition to manage upward, Abbajay recommends that followers have reasonable expectations for what speaking up can accomplish.   

When leaders do not rise from a group, their leadership likely occurred through external achievements or by pleasing someone other than the group members. This makes it less likely that the leader will be beholden to the group and more likely followers will have to adapt to the leader’s behavior traits. Successful people are particularly hard to change because they generally attribute their success to their dominant personality traits, so they will be slow to change unless they have to.

In these situations, it is best to look for incremental changes. Because the grant of authority in an imposed leader is one way – authority of the leader over the followers – the delegation of authority that occurs when leaders emerge from a group does not exist. This means that changing leadership behavior for an imposed leader is more in the nature of a negotiation.

To change the behavior of imposed leaders, followers must communicate clear benefits to the leader to be gained by changing his behavior. Additionally, responsible followers then must ask whether they are willing to do their part. Followers need to be self-critical. Why are they asking a leader to change, and what will they do in response? Followers are obligated to speak up and follow through.   

Assuming that the leader is open to input, and the followers are willing to do their part, an effective bond can be built. Even in the case of an imposed leader, the best leaders and followers develop a sense of shared responsibility. In a way, the best imposed leaders delegate some of their authority to the group, even when they don’t have to. Where leaders and followers become tightly connected and develop a bi-directional relationship, organizations are healthy and the morale of followers is high.

The lesson is clear: effective leadership, however it arises, is a shared responsibility. Even a boss imposed from above is more likely to be effective by positively engaging with her followers.  

As I tend to, when looking at these issues I ask whether these lessons for business are equally true for politics. When it comes to leaders imposed from above, there is one big difference. In business, if followers determine they can’t work with a boss, the most likely remedy is to change jobs.  

In politics, if you don’t like your leaders, you vote them out of office.





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In business and politics, we most often act as part of a group. Understanding group dynamics and its relationship to leadership is a topic very much on my mind these days. Let me explain why. 

As an innovation expert and educator, I spend a lot of time working with groups and teaching group behavior. I have found certain consistent behaviors among the hundreds of groups I have instructed or worked with over the years. 

In the United States, when a group does not have a person designated as leader by virtue of title or position, group members have a very strong bias towards adopting majority rule as their decision-making paradigm. I consistently see this regardless of the group members’ age, income, education or other demographic attributes. Absent a clear leader, group members most often consult with each other and then assemble a majority vote to support a decision. 

Interestingly, while groups are driven to find common ground and make decisions through majority rule, they are also very willing to be led. But only if they are comfortable with who leads them. Left to their own to act, groups find their leaders through questioning or conduct to identify special expertise, a job title that carries authority, or other indicia of authority. Then, they follow the leaders they choose. 

Understanding the contradictory impulses of majority rule and a willingness to be led is essential for effective leadership. The grant of leadership is always contingent. Groups may be willing to be led, but only if the leaders consistently demonstrate that they are competent to lead, that their decision making is sound and that they give credence to the opinions of those whom they lead. 

What happens when a leader proves not to be worthy of continued leadership? Groups and their members become frustrated and look to reassert their power to decide. And if the leader does not cede authority back to the group or to a leader the group prefers, the group gets more frustrated.   

I’m sure you’ve experienced this group dynamic for yourself. Perhaps it was when a boss gave a poorly qualified relative a management job over more qualified non-family members. Or, when a team is adversely affected by a team captain that doesn’t challenge management or the refs on behalf of the players. It could have been when a chief executive turns out to be sexually harassing employees, while espousing a corporate culture of inclusion. In each case, there was a group that experienced the delegation of authority and the frustration and anger that followed when the leader proved unworthy of following.  

Everyone knows that his or her opinion matters. Every group expects deference and acknowledgement from its leaders.   

This is something every business leader must understand to be successful. The best business leaders take the time to remain in touch with their employees through 360-degree reviews, strategic planning, organization retreats, employee training and development and many other means. Indeed, the entirety of best practices in management and leadership rests on understanding the needs of the group and on individuals participating in forming the group consensus. 

Which brings me to the world of politics and policy. Too many political leaders seem to have forgotten that they owe their leadership roles to the individuals and groups that delegated authority to them. They no longer treat them as if their opinions matter. A business leader that ignores the well-being of his employees would surely be fired. Why shouldn’t political leaders be evaluated by the same standard?    

Don’t let the noise of current events confuse or dissuade you. Leadership is not taken. It is earned. No one should be a leader without honoring that fundamental truth. What is true in business should also be true for politics.  



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