the Rainforest: the Secret to Building the Next Silicon Valley

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the Rainforest: the Secret to Building the Next Silicon Valley

  1. 1. A new book by Victor W. Hwang and Greg Horowitt Greg Horowitt, Co-Founder & Managing Director, T2 Venture Capital Co-Founder, UCSD Global CONNECT www.therainforestbook.com www.innosummit.com
  2. 2. ONCE UPON A TIME…
  3. 3. Economic ProcessLand Add ValueLabor Capital OutputsKnowledge
  4. 4. THE RISE OFINDUSTRIALECONOMIES
  5. 5. The Image of Limited Good George M. Foster , 1965 Peasant Society and the Image of Limited Good, "American Anthropologist."
  6. 6. Scarcity
  7. 7. THE EMERGENCE OF KNOWLEDGE &CREATIVE ECONOMIES
  8. 8. Abundance
  9. 9. So the big question isCan we engineer serendipity through design?
  10. 10. YES!
  11. 11. ACTIONS  OUTCOMESThis is where we tend to focus
  12. 12. BELIEFS  BEHAVIORACTIONS  OUTCOMESThis is where we need to focus
  13. 13. What is the connection between emotion and high impact economic growth?
  14. 14. What can we learn from psychology?How does human behavior really change? Across an entire system
  15. 15. People learn behavior through real-world“doing,” role modeling, peer interactionwith diverse partners, feedbackmechanisms, and explicit codes ofconduct. Across an entire system
  16. 16. Implicit Explicit
  17. 17. EXPLICIT vs TACIT The Science of MotivationMIT, Carnegie Mellon, Univ. of Chicago
  18. 18. Rules of the RainforestRule #1: Break rules and dream.Rule #2: Open doors and listen.Rule #3: Trust and be trustworthy.Rule #4: Experiment and iterate together.Rule #5: Seek fairness, not advantage.Rule #6: Err, fail, and persist.Rule #7: Pay it forward.
  19. 19. Because it’s not about thinking outside the box Its realizing the box doesn’t exist!
  20. 20. ʩ (I)= (√$+ √Ƙ) x ∆<μ ͣ+μ ͩ> + ʀ
  21. 21. 20 years from now…what will be the next
  22. 22. ‘According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives; it is not the strongest that survives; but thespecies that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.’(Megginson, ‘Lessons from Europe for American Business’, Southwestern Social Science Quarterly (1963) 44(1): 3-13, at p. 4.)
  23. 23. Try fast, learn quickly, fail small… and evolve rapidly
  24. 24. A New Paradigm• Predict and Repeat  Learn and Adapt• Business Planning  Business Modeling• Eliminate Risk  Manage Risk• Never Fail  Fail fast and cheaply• Outputs  Outcomes (Patents ≠ Products)• Invention  Innovation
  25. 25. Ambiguity + Discomfort"The truth is that our finest moments are most likelyto occur when we are feeling deeply uncomfortable, unhappy, or unfulfilled. For it is only in such moments, propelled by our discomfort, that we are likely to step out of our ruts and start searching for different ways or truer answers.“ Unknown
  26. 26. Uninformed + Intelligent Diversity and independence are importantbecause the best collective decisions are the product of disagreement and contest, not consensus or compromise. James Surowiecki, the Wisdom of Crowds
  27. 27. Roots before Branches
  28. 28. Roots of an Ecosystem1. Smart Policies2. Informed & Engaged Private Sector3. Enterprise and Entrepreneurial Support4. Responsive and responsible workforce development / skilling initiatives5. University – Industry Linkages6. Robust Capital Food Chain7. Flexible, but strong Intellectual Property Frameworks8. Proactive Innovation Leadership Development9. Supportive Infrastructure10. Active Youth Engagement
  29. 29. Innovation is about ideas having sex Matt Ridley, “the Rational Optimist “
  30. 30. The Rainforest Canvas™SEQUENCING THE REGIONALGENOME
  31. 31. The InnovationEcosystem Ideas Opportunity Talent Capital
  32. 32. •Who are the entrepreneurs?•Who has the reputation, resources and •Who are the service providers? •What is the regulatory environment forcommitment to lead new initiatives? •Who are the inventors? innovation?•Who will champion new initiatives within •Who are the capital providers? •What legal/bureaucratic barriers stand intheir own organizations? •Who are the support organizations? the way of entrepreneurship?•How can leaders and champions be more •What is the role of government? •What widespread social norms surroundinclusive? •Who are the other key participants in the innovation ecosystems? the innovation ecosystem? •What are people already doing to stimulate •Where, when and how do stakeholders•What resources are available to aspiring innovation/entrepreneurship? •Who are the local entrepreneurs that have interact? built successful companies?entrepreneurs (knowledge, mentorship, •How are these people collaborating with •How do ideas, talent and capital comecloud hosting, etc.)? each other? •Who are the local entrepreneurs that together?•What sources of capital are there in the •What activities drive participation in the •What are the lines of communication haven’t yet been successful and what canmarketplace? we learn from their failures? community? between partners?•How does this capital flow and interact with •What events create ‘buzz’ and generate •What regions have similar attributes andgrowing businesses? •How do members of the community resources? interest? collaborate with each other?•What is the volume and quality of talent in •What organizations have sharedthe labor pool? •How does the community engage external visions/values? or global partners? •Are there other regions with successful•What are the main sources of innovative •How does the community encourage recruitideas/discoveries/inventions? innovation ecosystems that we could learn new constituents?•What resources are available to service and •How do young people get involved? from or emulate?support organizations that interact withentrepreneurs (workforce training, etc.)? •What forums exist that allow the breakdown of social and professional hierarchies? •Where do people come from? •What are their value systems? •What are their motivations (money, reputation, lifestyle, self expression, etc.)? •What are the ‘amenities of place’? •What is the density and quality of service providers (law, IP, consulting, real estate, etc.)? •How do we create and maintain a sense of urgency? •What boundary spanning organizations exist? •What kind of innovative social networks exist already? •What is the local level of serial entrepreneurship? •How do people deal with uncertainty, risk or randomness? •What is the density and quality of physical infrastructure (airports, internet connections, etc.)? •How is failure perceived? •What are the core sectors of the local economy? •Do people build for perfection or iteration? •What are the strongest regional comparative advantages?
  33. 33. “While we associate economic growth with technological development,organizational innovation has played an equal, if not more important role since the beginning of the industrial revolution.” Economic historians Douglass North and Robert Thomas (P47 of “Trust”)
  34. 34. "It is better to have dreamed a thousand dreams that never werethan never to have dreamed at all." Aleksandr Pushkin
  35. 35. A new book by Victor W. Hwang and Greg HorowittGreg HorowittManaging Director, T2 Venture CapitalCo-Founder, Global CONNECT, UC San Diego www.therainforestbook.comKauffman Fellow www.innosummit.com

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