Silicon Valley 2010- Changes in the Circles of Influence from Prof Tom Kosnik

Silicon Valley 2000-2010: Changes in the Circles of Influence Prepared Tom Kosnik and Lena Ramfelt, Coauthors of Circles of Influence (in revision) Presented at NUS on March 25, 2010 If you circulate any part of this presentation please give credit to the authors.

Thanks to NOC Alumni, NUS Enterprise, and NEC team for making this presentation possible!
Prof. Lilly Chan
Prof. Teo Chee Leong
Prof. Wong Poh Kam
Wong Hong Ting
Hoey Lit Loo
Audrey Tan
Min Xuan Lee
Lao Zi Jun Lawrence
Shannen Soo
Jolia Tan
Daphne Gong
And more!!!

Who is Tom Kosnik? 1970 1980 1990 2000 2005 2010 AMERICAN MANAGEMENT SYSTEMS

Agenda
What is Silicon Valley?
Stanford and NUS are at Ground Zero
Circles of Influence: Players, Stakes and Code
The Players in 2000… and 2010
Web 2.0 & Mobile Milestones in the Valley
Clean Tech Categories on the Rise in the Valley
Venture Capital Trends in the Valley
Reasons for the Venture Capital Crunch
The Rise of Incubators and Accelerators
How Entrepreneurs are Coping with Changes
Examples of Trustworthy “Young Guns” in VC

What is Silicon Valley? An entrepreneurial state of mind.

What is Silicon Valley? Miles of roads and too much traffic

What is Silicon Valley? The highest concentration of entrepreneurial high-tech companies in the world.

Stanford University is at Ground Zero in the Silicon Valley Cluster

And So is NUS College of Silicon Valley!

What are the Circles of Influence? A model to help entrepreneurs get stakes for their ventures. Entrepreneurial Cluster Players Code Stakes The Sweet Spot!

Players bet their stakes on entrepreneurial ventures.
Venture capital firms (and their Limited Partners)
Angel Investors
Research Universities (Stanford and Cal)
Silicon Valley Law firms
Public Accounting firms
Investment banking firms
Consulting firms
Marketing, advertising, and PR firms
Executive search firms
Stock exchanges (NASDAQ, NYSE, etc.)
TiE, 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
These are major players in Silicon Valley. How are they similar to or different from the major players in Singapore?

The Players in Silicon Valley in 2000… Silicon Valley VCs Angel Investors Regional Business News Media Large High Tech Companies with Silicon Valley HQ (Lead Customers And Suppliers) Local Government Institutions Leading Silicon Valley Law Firms Fortune 500 Firms not in Silicon Valley (Customers) Executive Search Firms State Government Institutions Investment Banks NASDAQ National Business News Media Stanford & Berkeley Big 4 CPA Firms U.S. Government Global Consulting Firms Most Non-US Corporations Local Influence Of Players Inside Silicon Valley Global Influence of Players Outside Silicon Valley Low Low High High Medium Medium

The Players in Silicon Valley in 2010… SV “local” VCs/ and Angels Regional Business News Media Large High Tech Companies with Silicon Valley HQ (Lead Customers And Suppliers) Local Government Institutions SV’s “global” VCs Leading Silicon Valley Law Firms Blogs & Social media (Facebook, Linkedin) Fortune 500 Firms not in Silicon Valley (Customers) Accelerators & Incubators Executive Search Firms State Government Institutions U.S. Government National Business News Media Stanford & Berkeley Big 4 CPA Firms Most Non-US Corporations Global Consulting Firms NASDAQ Investment Banks Local Influence Of Players Inside Silicon Valley Global Influence of Players Outside Silicon Valley Low Low High High Medium Medium

The stakes include… And much more… Money Time Talent Technology Customer Relationships Passion

To get players to bet their stakes on your venture - you’ve got to know the code…
What is the code?
“ Local” rules of the game
Usually implicit
Communicated in private
Rooted in local entrepreneurial cultures
Changing across industries in the same location.
Knowing the code accelerates your ability to build trust.

Different Industries are like Mountains in Silicon Valley Silicon Valley Life Sciences: Biotech, Medical Equip. Pharmaceuticals. Personalized Medicine Medical Informatics. Etc. Different guides know the code for each mountain! Defense/ Aero Clean Tech Computers & Communications Software, Software as a service, Web 2.0, etc. Semi Mfg./ Semi- Conductors s

Web 2.0 & Mobile Milestones in Silicon Valley 2000 2002 2003 2004 2005 2006 2010 2009 2008 Sequoia Capital Doom & Gloom 2001 NUS College in Silicon Valley 2007

CleanTech Categories on the Rise in Silicon Valley
Air, Water, and Waste
Energy Efficiency
Green Building
Renewable Energy
Solar
Wind
Waves
Thermal
Biofuels
Smart Power, Smart Grid, Energy Storage
Transportation
Categories Adapted from: Source: http://www.cleantechopen.com/app.cgi/content/competition/category_description

Venture Capital Investment Trends in Silicon Valley The bottom line: There is Scarcity in the Land of Plenty! Source: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical

Reasons for The Venture Capital Crunch Shrinking Value of other investments reduces the amount LPs are allowed for VC funds Poor performance of most VC funds in last 10 years makes VC less attractive Disruption of investment banks make fewer trusted players to help with IPOs and M&A Public distrust requires VCs to hold startups longer to reach profitability before exit Venture Capital Funds

Ron Conway talks about the odds of getting funded

The rise of Incubators and Accelerators to help early stage entrepreneurs 2000 2002 2003 2004 2005 2006 2010 2009 2008 2001 2007 1999 NUS College in Silicon Valley Emerging Leaders Forum

How Entrepreneurs are Coping with the Changes in Silicon Valley
“ Getting outside the building” to develop paying customers while developing products!!!
Relying on parents to bootstrap their ventures
Sharing info on VCs on TheFunded.com
Avoiding “old school VCs” – working with “young guns”
Joining Incubators and/or Accelerators
Entering multiple business plan competitions
Offshoring development from the outset.
Some of these are opportunities for NUS Enterprise & NOC Alumni!

Examples of Trustworthy “Young Guns” in VC
Web 2.0 and Mobile Media
Katherine Barr, MDV
Ravi Belani, DFJ
Chi-Hua Chien, KPCB
David Hornik, August
Mike Maples Jr., Maples
Ann Miura Ko, Maples
Sergio Monsalve, NVP
Jonathan Teo, Benchmark
Clean Technologies
Raj Atluru, DFJ
Andrew Chen, Lightspeed
Ira Ehrenpreis, Technology Partners
Warren Hogarth, Sequoia
K.T. Moorgat, MDV
Eric Straser, MDV
Steve Vassallo, Foundation
Trae Vassallo, KPCB
Note: I do not get a referral fee! 

Mike Maples Jr. Talks about Learning from Failure

Thank You Tom Kosnik 650 450 3330 Facebook: Tom Kosnik skype: thomas.j.kosnik [email_address] Lena Ramfelt [email_address] 0733 756 012 Linkedin: Lena Ramfelt Skype: lenaramfelt

Appendix Myths and Paradoxes in Silicon Valley Not for presentation. Possible use in Q and A

Venture Capital Investment Trends in the U.S. Source: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical

The 7 Paradoxes of Silicon Valley Silicon Valley is “ground zero” for innovation. 7 Paradoxes of Silicon Valley Paradox 1: Mountains in the Valley. Paradox 2: Academic aristocracies sing praise to meritocracy. Paradox 3: Scarcity in the land of plenty. Paradox 4: Innovation masks tradition. Paradox 5: It’s OK to fail if you shoulder the blame. Paradox 6: Long on knowledge, short on wisdom Myths about entrepreneurship in Silicon Valley The Valley is an open network. The Valley is a meritocracy. Money, talent, and other resources are abundant. It’s OK to fail! Learning fuels success in Silicon Valley. Everyone cooperates – even competitors. Paradox 7: Competitors Collaborate and Collaborators Compete.

Academic Aristocracies Sing Praise to Meritocracy: 2003

Academic Aristocracies Sing Praise to Meritocracy: 2008

Scarcity in the Land of Plenty The Money Talent Merry-Go-Round

It’s OK to fail if you learn – and shoulder the blame Myth 5: It’s OK to fail Paradox 5: It’s OK to fail if you learn - 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.

Do the Paradoxes of Silicon Valley apply in your Entrepreneurial Cluster? The Paradoxes of Silicon Valley No ?? Yes 1. Mountains in the Valley 2. Academic aristocracies sing praise to meritocracy 3. Scarcity in the land of plenty 4. It’s OK to fail if you learn – and shoulder the blame 5. Innovation masks tradition 6. Long on knowledge, short on wisdom 7. Competitors collaborate, collaborators compete Are there other paradoxes in your community?

What segment best describes you tonight?
Raise your hand for the color that best fits you tonight:
Blue = I have an opportunity, am looking for money and talent
Red = I have talent, am looking for the right opportunity
Green = I have money to invest (as a customer, angel, VC, etc.)
Yellow = I have other resources entrepreneurs need to grow

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Silicon Valley 2010- Changes in the Circles of Influence from Prof Tom Kosnik

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Silicon Valley 2010- Changes in the Circles of Influence from Prof Tom Kosnik — Presentation Transcript