Seeking an Entrepreneurial Culture in Utah

Last week, Provo Labs held its first mixer for its portfolio companies. We are hoping to develop a culture of knowledge acquisition and sharing, a culture of networking, a culture of innovation.

We gave out free copies of Tim Sanders’ excellent book, “Love is the Killer App” and we also talked about John Hagel’s new book “The Only Sustainable Edge” that in some ways may become the bible of Provo Labs. His earlier book “Net.gain” which discussed the power of online communities influenced my strategic thinking at Ancestry.com more than any other book.

So thanks John, for two timely books!

If Provo Labs can focus on “accelerating capability” in each of our portfolio companies and in our parent, and make sure that all of our employees are in as many “knowledge and idea flows” as possible, then we should be spectacularly successful in the global economy.

I got on my soapbox about some problems I see in Utah’s business culture. We have lots of entrepreneurs with great ideas, but as companies start to grow, they seem to get sluggish and very inwardly focused. Then they stop innovating and stop being competitive.

Josh Coates (who attended our mixer), a Silicon Valley purebred, says the problem is either arrogance or ignorance or both. Large dominant companies tend to become arrogant and they stop learning and innovating. For a while it doesn’t matter, but over time they lose their edge and get overtaken.

But

Years ago it was widely held that Broderbund/Family Tree Maker was the arrogant company in the genealogy industry. They were doing tens of millions a year in software and data sales with no competition. Genealogists didn’t like the fact that they were collecting data from users and selling them on CDs.

We met with them early on (as we were launching Ancestry.com) and basically they didn’t want to partner and felt that they were going to bury us.

Our internet business model basically undercut all three of their revenue streams: software, genealogy data, and collections of user files.

We gave away free online software (and later free downloadable software), we provided tons of free genealogy data online and a low-cost subscription for premium data sets, and we created the Ancestry World Tree from submissions by hundreds of thousands of genealogists, and we promised to keep all user-generated content free forever.

After we started growing fast, people told us that the Family Tree Maker people started holding “kill Ancestry” meetings each week. But I think arrogance prevented them from realizing that we were delivering better products and better value to customers and that their old model wasn’t going to win the day.

Josh says ignorance is the second cultural problem in Utah.

For me that was nicely illustrated at the recent CES conference. One of the biggest consumer internet companies in Utah that has hundreds of employees didn’t send a single employee to the conference.

I met one employee who had taken vacation days and paid his own way to Las Vegas so he wouldn’t miss out.

But if Utah companies don’t send employees to the most important industry conferences, then ignorance of the rapidly changing technology landscape will make them unprepared for competition.

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