3.18.11 Tim Clark’s talk notesToday’s lecture covers a broad range of topics:• Paypal mafia a. Paypal – payment system you can use online b. Mafia – original meaning is organized crime, but here it means a tightly-knit community that formed from original founding members at paypal c. All of these people in paypal have moved into many different things• Important elements of working in silicon valley – being mobile and mixing with different people• Mixing models• Green companies• TrendsFactpoint – does market research for technology companies -- including HitachiWeb 2.0 uses content that users are creating.Cheaper for companies, since use creates the contentSocial Entrepreneurship covers many areas:• Microfinance – kiva/microplace• Cleantech• Cooperatives – social sector in japan using organic foods – buyer cooperative, brings together different buyers o Old kind of organization o Seller cooperatives o (selling raisins – sunmaid)Question (Seikun): Social media – each social media has to win in the market. How dothey do this? 1. Some are just lucky 2. Some have a great idea which becomes VIRAL – spreads like crazy • Eg, google 3. Must have very solid technology – if you have millions of users, this can crash the systemEntrepreneur starts with idea.The money and people are second.Question (Kenichi): Definition of social – in social media? 1. Social media is still so new, a clear definition is just being worked out now. 2. Situation is similar to Cloud computing, not too long before, people were not sure how to define it. Now, people have more of an idea now than they did before 3. Some day soon, people will understand social media better too
Use technologyScalable – start with something small (like a demonstration) and keep going up and upBusiness models also need to be scalable.A few VIA alumni now working in socialTom Lo – Yahoo to Ebay to Microplace -- is working to make microfinance scalableAndy Cohen - Success factors (hr software) to Caring.com • Started from living in bay area, when mother became ill/elderly in Chicago • Using the web to connect people in same situation that he was in – in need of information to make a better informed decisionTom Fricke – Green Mountain Coffee – one of biggest fair trade coffee in the US • fair trade connects to social enterpriseRecipe for Silicon Valley –A. Brainpower - start with intellectual capital • Early contributors were Stanford (Santa Clara, Berkeley too)B. Venture capital – 3000 Sand Hill Road – bring money to start-ups. • As 1 in 10 fail, in order for venture capitalists to get wealthy, there needs to be a BIG return on investmentC. People: innovative, talented, risk-takers • Technical, marketing, business skills (around finance)A few Companies that started out of Stanford,1. HP – one of biggest IT2. Cisco – originally started running the on-campus network at Stanford – the technology became available to the commercial field3. Netscape – first real internet company. Used popular web-browser. Company lasted 6 years. Directly challenged Microsoft… not a good idea. Eventually sold to America Online.4. Jerry Yang – grad student at Stanford – started Yahoo5. No one knew about google for 5 years.What do these people have in common??All were born outside of the U.S. and chose to come here to be absorbed into the siliconvalley culture • Openness to outside talent is important partWaves of innovation • Tablet computers, using touchscreen – has been around for 20 years, but nobody knew how to make it profitable, until apple
Question (Lihan) – common point among many of the investors is they are outside theU.S. People in the U.S. are also very successful, so what is unique about those comingfrom elsewhere. 1. Silicon Valley has a Mystique – interests a lot of talented peopleQuestion: Why do so many companies fail? 1. Can be struggling with technology, heavy competition, decline in performance (people lose interest quickly, start moving to other companies)Question: Why is silicon valley so successful (compared to boston) 1. Big reason why? Some suggest that it is the weather – easier to live here. Less diversity in the boston area, more rigid social structure – much more diverse in California – nobody comes from California. 2. New York – may be cost of living, makes it hard to live there?Question: Much great rate of failure in business – what do people do after they fail? 1. Try again. Failure is not a disgrace. 2. Learn from the failure • question to ask – when something does not work, is it because it is a bad idea or the market was not ready for it?Paypal mafia – out of paypal – knew each other and went on to start their own successfulcompaniesSix apart – software behind wordpressZynaga – biggest game companyWhat are trends in silicon valley?Oracle – has done 40-50 acquisitions in last several yearscloud computingopen source – not selling the code for a profitGreen ITWeb meetings – why are these green? Cut-down on amount of spending on travelnecessary.Power management software – companies that use a lot of energy – can control theamount that gets usedAutomated systems management – device costs less than peopleDigitizing paper processesTelework – helps make work from home more secureHelps with electronic work-flowQuestion (lihan) – why did you join VIA? 1. Really fascinated by stories that I was hearing about Indonesia.
2. During coldwar, anti-government sentiment at that time was becoming very strong.Question (misako) – some negative impact of telework – ie, less face-to-face contact 1. Not necessarily substituting, but is another way to contact people • Airline called Jet-blue – when you call them, you are contacting them at there home. This works great for people with children, with disabilitiesQuestion (Kenichi): In U.S., how long does it take for telework to become common?Silicon Valley goes green and social – how?Software engineering talent –Financing from venture capital – doesn’t help all companies (those that are not aiming tobe big and successful, just small and successful)Entrepreneurial talentUnderstanding of politics and governmentGlobal marketBarriers – high costs of livingIncreasing competitionManufacturing (labor cost, supply chain)Tesla – concern about where they get their supplySilicon Valley goes socialHewlett, Packard, Moore FoundationsGoogle.org – is it csr, or philanthropy, or with regard to energy (may just be for ownsavings)Omidiyar Foundation – does investing and grant fundingCypress Semiconductor – spun out SunpowerApplied materialsLessons from Silicon ValleySerial entrepreneurs are valuable and pampered – you are much more likely to getfunding once you’ve successfully led a start-upReally a small community – connections are very importantDoing well (making a lot of money) v doing good (making world better) – sometimesthese two goals are in conflictLocation mattersQuestion about involvement of government (ken) 1. centers for study of innovation in applied research 2. in energy, may tax breaks and incentives for start-ups in green/clean technology 3. bulk purchase of hybrid vehiclesQuestion: for cleantech – really needs a system that supports it – is this necessary?
1. Tax credits and investments are mostly federal government.Questions for ESI participants: 1. Is failing in a social enterprise a negative? 2. Where do you find personal connections for social enterprises?