“The Future of America is Not an App”

Earlier this month, I interviewed angel investor Tom Friedman on Talking Logistics about the link between entrepreneurship, angel investing, and supply chain and logistics. In Tom’s experience working with startups, specifically those making physical products, many entrepreneurs are very knowledgeable about engineering and product development, but they lack the skills and expertise in one critical area to scale their companies: logistics and supply chain management.

So I asked Tom, what needs to happen, what needs to change, to help entrepreneurs overcome the supply chain and logistics challenges they face? Tom proposed several ideas, but is my favorite quote:

“We really need to talk to young people, and I’m talking about high school students, about the complexities of the supply chain before they start dreaming about some crazy iStore app. We need to convince the youth of America that the future of America is just not always an app.”

It’s a tough message to sell when you see a 17-year old kid get $30 million from Yahoo for a 5-month old app, but it’s a message that I believe in nonetheless.

(For related commentary, see “A Farm System for Supply Chain and Logistics: Preparing the Next Generation of Leaders” and “Supply Chain in High School”).

Another thing that needs to change is the way third party logistics companies (3PLs) view startups and entrepreneurs. Simply put, 3PLs need to be more forward-thinking — they need to think more like investors and not just focus on the short-term risks and revenue opportunities. As I wrote last year in “Entrepreneurs, 3PLs, and Angel Investors: Kick-starting the Make Economy”:

Before meeting with an angel investor, [entrepreneurs should] meet with a forward-thinking 3PL first. If you can get the 3PL to effectively invest its time, resources, and assets in your business (via a Vested Outsourcing agreement, for example, where the risks the 3PL takes upfront are balanced with the rewards later on), then you have a partner at your side that can address whatever supply chain and logistics related concerns an angel investor might have.

And here’s what I’m suggesting to 3PLs: Be forward thinking if an entrepreneur knocks on your door. If an opportunity looks promising, find a creative way to partner with the entrepreneur, where you minimize the upfront costs and risks for him (or her), while maximizing your longer term profit potential.

Watch the rest of my conversation with Tom for additional thoughts on this topic.

Like Tom, I believe the future of America is not an app, but the resurgence of American manufacturing. As Wired magazine editor Chris Anderson states in his latest book, we are currently witnessing the beginning of a new industrial revolution, where “today’s entrepreneurs, using open source design and 3D printing, bring manufacturing to the desktop…[and] will help drive the next big wave in the global economy.” The success of this revolution, however, will not depend on the design and engineering skills of entrepreneurs, but on their supply chain and logistics knowledge and partners.

Do you agree? Post a comment and share your viewpoint!