The new financing model for the new economy

Dave Pollard is getting so close to defining what the new model for enterprise will be like. He calls them Natural Enterprises and defines them as:

"A form of self-organized, self-managed, community-based business partnership in which two or more people agree to make a living together as collaborators and peers, to strive to attain what each member needs to achieve for his or her personal well-being, to accept substantial responsibility for each other, and to respect and help the community or communities in which the enterprise operates. It is 'natural' because this form of socio-economic activity occurs ubiquitously in hunter-gatherer cultures and in non-human animal cultures."

Any new organizational/economic model needs a financing model of its own as well. The real take off of the industrial model took place with the parallel emergence of banking as we know it - J P Morgan and Andrew Mellon lead that charge as did the Quaker Banks in England such as Barclays.

I had drinks and pizza last with Dan James and Steve Garrity We were joined a contingent from Moncton Seb Paquet and Harold Jarche . One of the many topics that we discussed was how badly the banksvunderstood the type of firm that Dave Pollard espouses. Silverorange is such a firm. It is a NE is the flesh so Dan and Steve know what they are talking about.

As we talked it became clear that the void in financing is real. Try explaining your enterprise to a bank if it is organized along the lines that Dave outlines! I think that the banks will never "get it'. They are creatures of the industrial paradigm. There will be financing needs though to get NE's of the ground. As Dan and I talked, we came to the conclusion that this role will likely be filled by the larger NE's themselves. This is already happening on a small scale. Firms like SO are offering resources such as space and tools to junior members. Old farts like me are offering up our Customer Capital and relationships by exposing younger members to my clients and contacts. For in the new model, the key support for new entrants is not only cash but the help that is needed to do the work and to connect to clients.

The new financing model becomes more like VC than credit. Where it is the advice, the sharing of resources and the opening of access to the larger world that is the key. There will also be the lending of cash but I think that this will be the smaller part.

Is this just naive altruism? No I think that it is self interest of the best kind.

We all "know" that the stronger our network, the better we all do. This then shifts the basis for competition. In the old model, every new entrant is a competitor to be squashed by the established. In the new, we are all part of an ecology. The thicker and more diverse the ecology, the better it is for all of us. What if the PEI/Moncton ecology really thickened up? What could we not accomplish?

Not the least - we all have a better life. I can think of few things that are as much fun as spending time with Dan, Steve, Seb and Harold.