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Circles of influence - Tom Kosnik
 

Circles of influence - Tom Kosnik

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    Circles of influence - Tom Kosnik Circles of influence - Tom Kosnik Presentation Transcript

    • Circles of Influence And the Seven Paradoxes of Silicon Valley Prepared by Lena Ramfelt and Tom Kosnik, Coauthors of Circles of Influence (in revision) Discussion led by: Tom Kosnik, andAmber Fowler, Shadi Mehraein, & Eghosa Omoigui, co-founders of echovc Presented for N-Chat at N-House Venture Lab: August 22, 2012 If you circulate any part of this presentation please give credit to the authors. Circles of Influence #1
    • Who is Tom Kosnik?1970 1980 1990 2000 2005 2010 AMERICAN MANAGEMENT SYSTEMS Circles of Influence #2
    • Circles of Influence Agenda• Silicon Valley• Circles of Influence• The Seven Paradoxes of Silicon Valley• Silicon Valley vs. Singapore Circles of Influence Circles of Influence #3
    • What is Silicon Valley?An entrepreneurial state of mind. Circles of Influence #4
    • What is Silicon Valley?Lots of roads with too much traffic! Circles of Influence #5
    • What is Silicon Valley? The highest concentration of entrepreneurial high-tech companies in the world.Circles of Influence #6
    • Silicon Valley Start-ups Have Innovated in many industries• 1940s -1960s: Aerospace/Defense• 1970s: Semiconductors and minicomputers• 1970s-1980s: microcomputer hardware and software plus biotechnology• 1990s: All of the above plus internet• 2000- and beyond: All of the above plus Clean-tech (Clean Energy, Air and Water), next-generation bioengineering, wireless, and web 2.0. Circles of Influence #7
    • Circles of Influence Agenda• Silicon Valley• Circles of Influence• The Seven Paradoxes of Silicon Valley• Silicon Valley vs. Singapore Circles of Influence Circles of Influence #8
    • What are the Circles of Influence?A model to help entrepreneurs to get players to bet on their ventures. Entrepreneurial Cluster Stakes Players Code The Sweet Spot! Circles of Influence #9
    • Players bet their stakes on entrepreneurial ventures.• Venture capital firms (and their Limited Partners)• Angel Investors These are major players• Research Universities (Stanford and Cal) in Silicon Valley.• Silicon Valley Law firms• Public Accounting firms• Investment banking firms How are they similar to or• Consulting firms from different players in• Marketing, advertising, and PR firms Singapore?• Executive search firms• Stock exchanges (NASDAQ, NYSE, etc.)• TiE, SABA, Monte Jade, AAMA, Silicon Vikings, etc.• Industry Associations (Semicon, SVASE)• Accelerators/Incubators (Astia, Clean Tech Open, Plug-and-Play, Y-Combinator)• BASES, ASES, NUSEA, Energy Crossroads, SWIB• Business and Technical News Media, Blogs, etc.• Joint Venture Silicon Valley; Clean Tech Open, etc.• Social media for entrepreneurs (Facebook, Linkedin)• Government agencies Circles of Influence #10
    • Friends The stakes include… & Family Money TimeReputation PassionCustomer Relationships Talent Technology And more… Circles of Influence #11
    • To get players to bet their stakes on your venture - you’ve got to know the code…What is the code?• “Local” business etiquette that builds trust• Rules of the game that vary from cluster to cluster• Explicit and implicit• Verbal and written• Communicated in public and private• Rooted in local cultures of entrepreneurial clusters• Changing across industries in the same cluster. Circles of Influence #12
    • The Players in Silicon Valley in 2000… Silicon Valley VCs Investment Banks High Angel Investors Leading Silicon Valley Law Firms NASDAQ Regional Business National Business News Media Local News MediaInfluence Large High Tech Fortune 500 Firms not in Silicon Valley Stanford & BerkeleyOf Players Companies with Medium Silicon Valley HQ (Customers) Inside Big 4 CPA Firms (Lead Customers Silicon And Suppliers) Valley Executive Search U.S. Government Firms Global Consulting Firms Low Local Government State Government Institutions Most Non-US Institutions Corporations Low Medium High Global Influence of Players Outside Silicon Valley Circles of Influence #13
    • The Players in Silicon Valley in 2012… 2 SV’s “global” VCs U.S. Government High SV “local” VCs/ Leading Silicon National Business and Angels Valley Law Firms News Media Regional Business Blogs & Social media Stanford & Berkeley Local News Media (Facebook, Linkedin)Influence Large High Tech Big 4 CPA FirmsOf Players Companies with Fortune 500 Firms Most Non-US Inside Medium Silicon Valley HQ not in Silicon Valley Corporations Silicon (Lead Customers (Customers) And Suppliers) Valley Global Consulting Accelerators Firms & Incubators Executive Search NASDAQ Local Government Firms Low Institutions State Government Investment Banks Institutions Low Medium High Global Influence of Players Outside Silicon Valley Circles of Influence #14
    • Circles of Influence Agenda• Silicon Valley• Circles of Influence• The Seven Paradoxes of Silicon Valley• Silicon Valley vs. Singapore Circles of Influence Circles of Influence #15
    • The 7 Paradoxes of Silicon ValleyMyths about entrepreneurship in 7 Paradoxes of Silicon ValleySilicon ValleyThe Valley is an open network. Paradox 1: Mountains in the Valley.The Valley is a meritocracy. Paradox 2: Academic aristocracies sing praise to meritocracy.Money, talent, and other resources Paradox 3:are abundant. Scarcity in the land of plenty.Silicon Valley is “ground zero” for Paradox 4:innovation. Innovation masks tradition.It’s OK to fail! Paradox 5: It’s OK to fail if you shoulder the blame.Learning fuels success in Paradox 6:Silicon Valley. Long on knowledge, short on wisdomEveryone cooperates – even Paradox 7:competitors. Competitors Collaborate and Collaborators Compete. Circles of Influence #16
    • Mountains in the Valley and every mountain is a mountain range! Semi Mfg./ Life Defense/ Semi- Sciences:Clean Aero Computers Conductors sBiotech,Tech Medical Equip. & Software, Pharmaceuticals. Software Communications Personalized Medicine as a service, Medical Informatics. Etc. Web 2.0, etc. Circles of Influence #17
    • Academic Aristocracies Sing Praise to Meritocracy: 2003 Figure 4.1B: VCs with MBAs from Leading Universities Source: Sample of 164 VC professionals from 21 Silicon Valley firms, June 2003. All Others 16% Northw estern 2% Columbia Stanford 2% UCLA Harvard 2% Stanford 40% PennsylvaniaSanta Clara 3% Santa Clara Pennsylvania 4% UCLA Columbia Northwestern All Others Harvard 31% Circles of Influence #18
    • Academic Aristocracies Sing Praise to Meritocracy: 2008 VCs with MBAs from Leading Universities Source: Sample of 167 VC professionals from 20 Silicon Valley firms, November 2008 All Others 15% Northwestern 2%Columbia 2% UCLA Stanford 2% 40%UC Berkeley 3% Pennsylvania 5% Harvard 31% Circles of Influence #19
    • Would you expect such dominance by males in a pure meritocracy? F ig 4.5: Gender Distribution in VC F irms o f Different Fo unding P eriodsSource: Sample of 323 VC professionals from 20 Silicon Valley firms in (A) VC firms founded before 1 980 (B) VC firms founded from 1 to 1 981 989 (C) VC firms founded after 1990100% See Appendix for breakdown.90%80%70%60% 89 8550% 9540%30%20%10% 11 15 0% 5 A B C Circles of Influence #20
    • Scarcity in the Land of PlentyThe Money Talent Merry-Go-Round Circles of Influence #21
    • It’s OK to fail if you learn – and shoulder the blame Myth 5: Paradox 5: It’s OK to fail if you learn -It’s OK to fail And shoulder the blame. How to cope with the paradox: • If you blame investors they won’t forgive or forget. • Fail fast and adapt before burning through your funding. • When failing remember to show grace under fire. Circles of Influence #22
    • Do the Paradoxes of Silicon Valley apply in your Entrepreneurial Cluster? The Paradoxes of Silicon Valley No ?? Yes1. Mountains in the Valley2. Academic aristocracies sing praise to meritocracy3. Scarcity in the land of plenty4. Innovation masks tradition5. It’s OK to fail if you learn – and shoulder the blame6. Long on knowledge, short on wisdom7. Competitors collaborate, collaborators compete 8 . Are there other paradoxes in your cluster? Circles of Influence #23
    • Circles of Influence Agenda• Silicon Valley• Circles of Influence• The Seven Paradoxes of Silicon Valley• Silicon Valley vs. Singapore Circles of Influence Circles of Influence #24
    • Entrepreneurial Clusters• A region engaged in entrepreneurial activity.• Bigger than a single city.• Smaller than a state or most countries.• Examples: – Silicon Valley – Singapore – Bio-Valley (in Philadelphia) – Wireless Valley (Kista and Stockholm, Sweden) – Beijing – Shanghai – Bangalore Circles of Influence #25
    • Singapore and Silicon Valley are Complementary ClustersSingapore Silicon Valley Circles of Influence #26
    • Singapore and Silicon Valley offer different context for the Circles of Influence Stakes Players Code Circles of Influence #27
    • Exercise• Form teams with people sitting near you• Compare the context that surrounds the Circles of Influence• What factors in Singapore help & hinder the local Circles of Influence?• What factors in Silicon Valley help & hinder the local Circles of Influence? Circles of Influence #28
    • Factors in Singapore that help and hinder the local Circles of Influence Stakes Players Code Circles of Influence #29
    • Factors in Silicon Valley that help and hinder the local Circles of Influence Stakes Players Code Circles of Influence #30
    • Thank You Tom Kosnik +1 650 450 3330 Facebook: Tom Kosnik skype: thomas.j.kosnik kosnik@stanford.eduBut please don’t email me! Circles of Influence #31