I recently wrote about today’s Internet usage from a financial perspective. McKinsey Quarterly (the world renowned consultancy’s business journal) reported our interactions with the Web to be worth an astounding €150 billion euro a year. The business journal has now published an article on new research by McKinsey Global Institute looking at the Web’s impact on economic growth, employment and productivity.

The study, which addresses the Web economies of thirteen countries (the G8 nations and five other nations including my home country Sweden), found that the Web today accounts for a significant portion of the world’s Gross Domestic Product (GDP) and more and more plays an important role in economic growth.

Here’s a summary of some of the most interesting findings highlighted by McKinsey Quarterly:

• The Web accounts for 3.4% of overall GDP in these thirteen countries. More than 50% of this relates to private usage (mainly advertising and online purchases). The Web economy now exceeds sectors such as agriculture and energy.
• In the mature countries studied (the G8 countries plus South Korea and Sweden), McKinsey found the Web to have accounted for as much as 21% of GDP growth between 2004 and 2009.
• McKinsey found most of the economic value of the Web to fall outside the technology sector with 75% of the benefits captured by the more traditional industry sectors.
• In Sweden (the country where the Web economy has had the biggest contribution to GDP growth), the Web economy contributed to as much as 15% of GDP growth between 1995 and 2009 and 33% between 2004 and 2009. Germany comes second with 14% between ’95 and ’09 and 24% between ’04 and ’09.

Overall, a very interesting read this bank holiday weekend for academics and professionals alike. If you’re not spending tomorrow (Sunday) at Wentworth like me watching Manassero do a McIlroy and Edfors shoot a 64 to beat Donald for the €750,000 pay check, you have no real excuse for not digging into the full report of the study (which was recently presented at the high-profile e-G8 Forum in Paris) during your morning coffee.

NB: The Internet/Web economy is defined by McKinsey Global Institute as the “sum of Internet consumption (services, access, e-commerce, etc.), private investment, public expenditure, and the trade balance in Internet-related goods and services”.

After spending the last few years mainly reading academic prose, I’m now trying to get my hands on as much business, marketing and management literature as possible based on ‘in-the-trenches’ experience. My latest find is a book written by entrepreneur Robert Jordan entitled ‘How They Did It – $41 Billion Worth of Inspiration‘.

The book, which can be bought here in the UK through Amazon, aggregates the success stories of 45 company founders from the heart of the motherland of entrepreneurship. The founders interviewed to make this book happen are not exactly the people behind your average corner shop. Each founder featured has either launched, grew and sold a company for at least $100 million USD, or alternatively, IPO’d a company with a market value of at least $300 million USD.

The stories are mainly presented in Q&A format and it’s easy to extract and understand the underlying insights and lessons without much effort. In order words, the perfect bed time read for the soon-to-be burned-out investment banker looking to start breaking free. ‘How They Did It’ is a great book which tells the stories of very creative and successful entrepreneurs in their own words (Dick Costolo (FeedBurner), Joel Ronning (Digital River) and Viresh Bhatia (InstallShield) to name a few). The founders’ advice, experiences, lessons, insights and perspectives on everything business provides excellent food for thought for professionals in all walks of business life, not just for investment bankers looking to go solo and leave the rat race behind.

One of the reasons for why I subscribe to entrepreneurial periodicals such as Inc. magazine is because of their ‘How I Did It / The Way I Work’ columns. ‘How They Did It’ is essentially a book that is entirely dedicated to this type of educational and inspiring content. All in all, highly recommended reading for aspiring entrepreneurs and corporate managers alike.

I have included one of my favourite insights from the book below:

Mahendra Vora (serial entreprenuer) on hiring:

” …A-players hire A-players, B-players hire C-players, and C-players hire F-players.”

To put the above quote into context: Vora reckons Pioneer Systems, Intelliseek and Ascendum (some of his start-up ventures) were successful because of the companies’ top 5/6 employees. They helped ensure that there were X employees of the same caliber reporting into them. Vora states that these X individuals then ensured that there were Y subordinates underneath them like that, etc.

I think this is not only relevant to entrepreneurs but also to anyone looking for a different perspective in evaluating and understanding a company’s human capital, whether it’s a start-up/SME or a larger organisation.

NB: Vora doesn’t define an ‘A-player’ as an Ivy League / Oxbridge graduate with a top 10 MBA. He believes one should look at “attitude, effort and values” in people before addressing their expertise, experiences and skills.

David Meerman Scott has posted a video on YouTube which is based on his promotional campaign for his new book, World Wide Rave. More than 100 people from seven continents contributed to the campaign. One of the pictures my brother and I took in Lindvallen, Sweden, in December 2008 can be seen in the video (1:54 min). Thanks for including it David!

I have embedded his video below:

David Meerman Scott is a thought leadership strategist and online marketing expert. He is also the author of three books on marketing including the bestseller ’The New Rules of Marketing and PR: How to use news releases, blogs, podcasts, viral marketing and online media to reach your buyers directly’. David is now in the news with his new book, World Wide Rave, which is due to be released on the 3rd of March.

I had the opportunity to meet David during a workshop he did for the EMEA Marketing Team at Dow Jones in London back in June 2008. David is currently promoting his new book and he approached me and some colleagues at Dow Jones a few months back and asked if we could help him out by putting up his poster somewhere interesting in our respective countries. His aim is to get a bunch of countries, cities and locations around the world represented.

My contribution to his campaign can be found below. The photos are taken in Lindvallen, Sweden. The first two represent David’s poster together with my brother Carl-Johan’s dog Pukko. My brother also helped me with taking the photos.

Update: David has now posted one of my photos on his book’s blog.

Click on the photos for a High Resolution version.

More information on David’s new book can be found here.

BusinessWeek, a business periodical, has published its ranking of the world’s 50 most innovative companies. The list, which was compiled in collaboration with Boston Consulting Group (BCG), features Apple, Google, Toyota, in first, second and third place, respectively.

Here are the 10 most innovative companies in the world according to BusinessWeek and BCG:

1. Apple
2. Google
3. Toyota Motor
4. General Electric
5. Microsoft
6. Tata Group
7. Nintendo
8. Procter & Gamble
9. Sony
10. Nokia

An interactive table of the full ranking of the 50 most innovative companies, a breakdown of the most innovative companies by industry and region and a full methodology is available here.

I recently wrote a report in a course called Management of Human Resources at Cass Business School on General Electric (GE) and its Human Resource Management (HRM) practices. When researching for this report, I came across a very interesting article published by The Economist, a news and international affairs publication, on golf and the game’s importance in business.

GE, for example, is famous for being a ‘golf company’. Jack Welsh, the company’s famous ex-boss, is according to many the best golfing CEO of all times and golf has over the years become an essential tool within the company for any manager looking to move up the career ladder. The Economist claims that Welsh used the game as a character test to see whether a person had the guts to work for his organisation. Many other organisations value the game very highly too. For example, John Mack, the boss of Morgan Stanley, is said to have made it a habit to appoint golfing friends to the board.

The Economist addresses a very interesting and important issue in the article. Is it possible that there’s a correlation between the very low number of female CEOs of Fortune 500 companies and the fact that they don’t get the opportunity to play golf with the male counterparts (e.g. because of mens-only clubs such as Augusta National in the US)? On the rare occasions when women get to play golf with their male colleagues, they play off a different tee. At the time of print, there were only eleven female CEOs of Fortune 500 companies and sadly, I don’t think the number has increased dramatically since then.

What’s your option? Do you think it’s possible that there’s a correlation between the very low number of female CEO’s of Fortune 500 companies and the fact that they don’t get the opportunity to play golf with their male counterparts?

You can read the original article here.

There has been a lot of speculation in the media during the last year about Internet’s latest phenomena Facebook and its profitability. An article by the Economist published in October 2007 suggested that Facebook might generate revenues of some $100m this year. Microsoft later paid $240m for 1.6% of the company – which valued the company to as much as $15bn – an amount many experts think is mad.

It now looks like the finances of the private-held company finally have been leaked onto the Net. Kara Swisher at AllThingsD.com, part of the Wall-Street Journal, has published the following financial metrics – which she claims comes from a meeting held by Facebook’s CEO and founder, Mark Zuckerberg, yesterday:

• 2007 Revenues: $150 million
• 2008 Revenues: $300 to $350 million (projected)
• 2007 Headcount: 450
• 2008 Headcount: 1,000 (projected)
• Capital Expenditures: $200 million (i.e., servers)
• EBITDA*: $50 million
• 2008 Cash Flow (EBITDA – Capital Expenditures): negative 150 million

*EBITDA = Earnings before interest, taxes, depreciation and amortization

Sounds like a fantastic investment opportunity – doesn’t it? But of course, the figures can change dramatically if Facebook would make a breakthrough in social network monetization – such as their very own version of Google Ads.

Read Karen’s article for more information.

I have just started to take a course called IT for Business at Cass Business School. The course touches upon everything from IT Management issues to Web 2.0.

Ron Young delivered the first lecture yesterday and talked about Knowledge Management (KM) and technology. Ron is the CEO of a company called Knowledge Associates. He is acknowledged as a leading expert in KM and has worked with leading organisations in the US, Europe and Asia Pacific.

Ron outlined five key challenges that he reckons companies will face within the next 10 years:

• Companies need to substantially increase the productivity of knowledge working, at least by a 50 fold
• Companies need to exponentially develop global knowledge sharing networks and relations
• Companies need to radically innovate
• Companies need to dramatically improve quality
• Leadership must be aligned to the timeless business principles (increase sales, reduce costs, increase profit/value)

For more information, visit his blog on the URL below:

km-consulting.blogspot.com

I found a great magazine last week called Entrepreneur. It is an American magazine but can be found at selected bookshops such as Borders in London. The magazine offers some great information and interesting reading on sales and marketing, management, technology and business strategy.

The November issue features an interview with Guy Kawasaki, known as the former chief evangelist for Apple. He has recently launched a social media site called Truemors and shares his start-up experience so far.

What I found most interesting with the interview was his comparison between the old internet start-up and his way of doing it – which I think applies to a lot of new internet based businesses today that does not require a significant amount of funding from VCs to get functioning.

For example, Guy launched his site without a proper business plan, with less than $13,000 in start-up funds, outsourced the development, worked from home and then hosted the site at an ISP rather than having his own servers to minimise costs further.

The “old-way” of doing it would according to Guy have involved frequent pitching to VCs to raise the funds required (some $1m over 6 months period), having 3-4 people in-house to carry out the development of the site for one year and to maintain 2-3 servers and have an IT guy to run them for a total cost of $100,000 per year.

Sure, there are still many technology related businesses that take millions to start, but there are many ideas that can be done using personal savings or credit cards by using great open-source tools such as WordPress to minimise costs. The model that Guy Kawasaki illustrated in the interview proves this.

EBay, the company behind the online auction and shopping website ebay.com, has written down its investment in Skype, an Internet telephone service, by £695m (nearly 50%). Skype has continued to add new users (its current user base is said to be 200m) at a fast rate but failed to produce the sort of e-commerce and advertising revenues that EBay had hoped for when it acquired the firm.

FT.com reports that EBay continues to insist that its long-term hopes for Skype remain unchanged and that it has no plans of selling the business.

At the same time, the two co-founders Niklas Zennström and Janus Friis have quit as executives.  According to FT.com, Mr. Zennström stepped down as CEO after missing out on a pay-day that could have earned him and other shareholders an extra $1.2bn. Instead, he will become non-executive chairman of the company and is expected to spend more time on other projects. The Swedish entrepreneur states in an interview with Di.se that he would like to spend more time working on Joost.com, an online video company he founded together with Mr. Friis after selling Skype in 2005, and on Atomico, his risk capital group.

It will certainly be interesting to see what the two Scandinavian entrepreneurs can do with P2P TV after having mastered the field of P2P file-sharing with Kazaa and P2P VoIP with Skype.

Read more on:
http://news.bbc.co.uk/2/hi/business/7023197.stm
http://www.ft.com/cms/s/0/3a431624-7054-11dc-a6d1-0000779fd2ac.html
http://di.se/Index/Nyheter/2007/10/01/250671.htm?src=xlink (Swedish only)