The Business Horizon Quarterly's (BHQ) purpose is to share informed insights on emerging issues facing the American business community. By asking questions like “what is growth?” and “what is innovation?”, we aim to inform and to spur debate.
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For most of history, people lived day-to-day. Their goal was survival, living to see the next sunrise. Hunt, gather, hunker down, and avoid danger—that was the only answer. One small slip, one cold winter, one encounter with infection could mean the end. Life was simple, hard, brittle, and short.
While most politicians and pundits see last April’s Jumpstart Our Business Startups (JOBS) Act as only an incremental deregulation of small-scale fundraising, it actually has the potential to transform the entire financial system. Called crowdfunding, the JOBS Act, once promulgated, will allow a company to solicit publicly for funds from individuals in return for equity or debt, which fundamentally changes the business norms of private markets. This will open up the finance industry to the ruthless, dis-intermediating power of the Internet.
Under current securities regulations, investment crowdfunding is essentially against the law. If you wish to raise money for your company, you cannot declare it publicly. In legal terms, such a public declaration would be a “general solicitation.” This is forbidden unless the company first files an offering with securities regulators, such as the Securities and Exchange Commission (SEC), which is an extensive, multi-month endeavor.
Alternatively, a company can raise money through pre-existing, substantive relationships, which usually are limited to a small circle of friends and family or take the form of broker-dealer networks. Since neither of these choices is terribly efficient, nor can reliably provide enough capital quickly, the senior executive or entrepreneur will usually raise money from an investment fund that spent the previous months gathering the capital.
A simple change in viewpoint can make a powerful difference for business leaders. An abundance mindset is a game changer that changes how the rules of innovation are perceived.
Not enough jobs, not enough funding, not enough invention, not enough patents, not enough innovation—not enough. This language is symptomatic of a scarcity mindset. A scarcity mindset, within reason, helps ensure we keep our focus. The scarcity mindset helps us to plan, budget, and forecast, all so that we may run a lean business, allocate our resources wisely, and act carefully within our limits.
An abundance mindset focuses instead on the emergence of new opportunities and the creation of new options, which in turn leads to bigger thinking. With an abundance mindset, people ask “what if” and “why not?”
With an abundance mindset, opportunities for more learning and successes are equally celebrated as milestones toward a longer and oftentimes larger vision. Once you start to look for more, you soon see more everywhere around you, and you begin to expect more too.
Business author Steven Covey discussed this “abundance mentality” in his 1989 bestselling book, The Seven Habits of Highly Effective People. An abundance mentality occurs when a person believes there are enough resources and success to share with others, and Covey argues that turning this belief into a personal habit soon leads to leadership results.