America, Inc.?
Mary Meeker has created quite a buzz with her cover story this week in Bloomberg Businessweek. It is based on her analysis of the U.S. as if it were a corporation. Her assessment?
The bottom line on USA Inc.? Cash flow and net worth are negative, profits are rare, and off-balance-sheet liabilities are enormous. The "company" has underinvested in productive capital, education, and technology--the very tools needed to compete in the global marketplace. Lenders have been patient so far, but the sky-high rates on the sovereign debt of Greece, Ireland, and Portugal suggest what might lie ahead for USA Inc. shareholders and our children.
By our rough estimate, USA Inc. has a net worth of negative $44 trillion. That comes to $143,000 per capita. Negative.
You can find their slide deck here.
If we look at the U.S. from a business model, it is not something I would recommend launching in its current state. Its value proposition lacks focus and does not meet the needs of its target market. But that doesn't really matter because it does not have the resources at its disposal to deliver even if the value proposition made any sense. And its revenue streams? Half of what it needs to operate.
If someone turned this model in to me in class it would be sent back with lots of red ink all over it -- appropriate given our budget deficit -- and I would not accept it again until they figured out a model that provides value and is sustainable. This student would probably get an incomplete, as this model is broken so badly that it would take more than a semester to sort it all out.
In the words of business modeling, the U.S. needs a pivot in its model and needs it quickly! Plan A ain't working anymore.
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