Injustice - Developers Among Us (SciFiDevCon 2024)
Innovation economy remarks to ignite! january 2016
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Smart Gigabit Communities and Local Innovation Economies:
An Investor’s Perspective
January 2016
Dr. Ronald F.E. Weissman
Band of Angels
Menlo Park, CA
Weissman@bandangels.com
Good afternoon. It is a real pleasure to address this distinguished group of
community innovators. I’m here today as as a VC and as Chairman of the Software
Group of one of America’s oldest angel organizations, the Band of Angels, located
in the heart of Silicon Valley. Over the past 22 years, our members have
personally invested more than a quarter of a billion dollars in technology
startups. I’m pleased to present the investor’s perspective on Smart Gigabit
Communities.
I’ve worked recently on innovation projects in Silicon Valley, in the US Mid-West,
and internationally, in New Zealand, Australia, Chile, and most recently, Armenia.
The I’ve been asked in each of the places, from San Antonio to Santiago, is how do
we become the next Silicon Valley? The easy answer is: invest in great
universities, our idea factories.
The harder and less-simple answer is to invest more deeply in an infrastructure
promoting local collaboration. Silicon Valley’s success took decades to build,
ignited significantly by the US Government funding during the Cold War Space
Race. Over many years, an ecosystem developed with all the key ingredients:
Universities and corporate labs providing intellectual capital. Plus an innovation
infrastructure including venture capital, law firms, accounting firms, tech-savvy
media, supportive local governments, and investment banks linked to major
capital markets. I stress, this took generations and thousands of companies,
including hundreds upon hundreds of spinouts from larger firms. Back when
dinosaurs roamed the earth, sixty-six semiconductor companies spun out of
Fairchild within roughly a decade of its foundation. Today, companies like Oracle,
Google, Salesforce, Apple, Facebook and PayPal have each spawned dozens of
startups. But much, indeed almost all of this innovation, was the result of
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personal connections, face to face contacts. And face to face innovation takes a
long time.
Ignite’s Smart Gigabit Communities promises to radically simplify and shorten this
collaborative process by magnifying what individuals can do. Ignite! Is enabling
deeply connected and highly immersive communities, linking public, private and
educational sectors at gigabit speed.
It isn’t just the collaboration itself that I find exciting. What’s most exciting for me
is that Smart Gigabit Communities allow us to focus the energies of many people
on big problems—like we used to do.
What does this mean?
Let me quote one of America’s smartest investors, Peter Theil, cofounder of
PayPal and Palantir, first outside investor in Facebook and managing partner of
Founder’s Fund. I think we can all agree that Theil has his finger on the pulse of
innovation. He recently said, memorably, “We were promised flying cars, we got
140 characters.” He, like a growing number of us, is frustrated by our focus on
less than truly disruptive innovation. We’re focused on what the innovation Gurus
call Horizon 1 innovation—short term and incremental, rather than Horizon 3,
longer-term and disruptive.
We’ve had several revolutions in core technology: semiconductors, Ethernet, the
personal computer, the relational database, the Web, the smart phone. But since
the last revolution—mobility--we’ve spent the last decade mostly tackling small
problems, many of them elaborations on the same old theme by thousands of
copycat startups. We’ve funded dozens of ways to design greeting cards,
hundreds of places to share photos and videos, more than five hundred places to
find dates, tens of thousands of ways to shop on line. Helpful, certainly. Fun? Of
course. Truly innovative? You be the judge.
The good news: more investors are increasingly focused on big problems again.
autonomous, self-driving cars; Life extension beyond our normative 80 years
powered by instrumentation of the body for vastly more effective health care;
magnification of intelligence via true man-machine interfaces; smart energy grids;
smart cities capable of intelligent transportation, optimized resource use and
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improved public safety; rethinking the entire food industry via one of the hottest
new sectors, Agtech. And, of course, killer robots.
But these big problems require collaborative infrastructure. Silicon Valley’s
semiconductor industry in the 70’s and 80’s required hundreds of companies,
dozens of labs and several universities all collaborating locally to solve thousands
of interrelated problems. These ranged from material science, CAD design,
manufacturing, supply chain logistics, software, that is, semiconductor IP and,
ultimately, operating systems to make chips useful.
As I’ve said, in Silicon Valley, this infrastructure, based on face-to-face interaction,
took many years to develop organically. With the next-generation Gigabit
Internet, the infrastructure is being put in place for accelerated regional
collaboration. Faster collaboration. Now, as the experiences of Silicon Valley and
Massachusetts’ high tech Route 128 have demonstrated, collaboration can rarely
be mandated from above. It is longest-lasting when it is organic and self-directed.
So a strong public-funded infrastructure enabling a vital private sector innovation
ecosystem are both key to significant innovation.
As an investor, what is most exciting about Smart Gigabit Communities is their
power to create collaborative regional hubs capable of tackling big problems.
Problems that matter. Powerful networks can aid company formation, and
collaborative private sector-public sector-university partnerships of the sort that
built the semiconductor industry in Silicon Valley.
Big Ideas like autonomous cars, life-extension and smart grids are beyond the
scope of any company. Think of them as our version of the Medieval cathedral,
projects beyond the reach of single companies or investors. Barcelona’s Sagrada
Familia, started in 1882 and still Gaudi’s design, will take another decade to
complete. The projects I’ve mentioned certainly won’t, I hope, take 140 years,
but will require deep collaborative vision, like Barcelona’s.
The benefits aren’t only realized after 140 years-- the benefits of such
collaboration can develop in the near term and be just as deep. Numerous cities
in the US are already reaping the benefits of smart traffic flow via intelligent
traffic systems. But even here, we could do so much more with smarter cars
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connected to richer data analyzed in real real-time, but this awaits more powerful
networks of the sort envisioned by Ignite!
Healthcare is another field benefitting from faster regional networks. In the US
alone, 16,000 clinical trials launch annually. But many are local and require
precise and speedy recruiting of a large population of eligible patients—usually
beyond the resources and demographics of a local university or research hospital.
Building regional clinical trials networks can really expand the potential patient
pool, reducing the number of trials which fail for reasons of limited patient
recruitment. Such networks will exploit immersive mixed-media and massive Big
Data analytics.
Beyond the opportunity costs of not having Gigabit regional nets, we’re spending
far too much today trying to overcome our lack of faster networks via short-term
investments in compression, data reduction and optimization technologies to
share data and get it in and out of the Cloud. The Cloud is still in its infancy,
awaiting faster networks to enable true, composite applications built from many
different Cloud services leveraging video, virtual reality and other presence
technologies.
You community leaders have wonderful opportunities to exploit. But the Gigabit
Community you’re building isn’t just about technology. Neww technology jobs
create a need for skilled workers in marketing, sales and support, and many non-
tech local opportunities for restaurants, delivery services and real estate. This is
the regional infrastructure required to support a growing workforce. A recent
study concluded that in Silicon Valley, every tech job creates between 4 and 5
new non-tech jobs.
Venture capitalists are looking, increasingly, beyond Silicon Valley, Boston and
New York. Innovation hubs have been created across the US. In St. Louis, for
example, around its world-class medical complexes. The South by Southwest
Conference ignited a digital media hub in Austin integrating entertainment,
gaming and technology.
With sky high valuations and thousands of copy-cat companies in Silicon Valley,
investors are seeking to put money to work in America’s new innovation centers.
Ignite’s Smart Gigabit Communities initiative promises to create more than a
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dozen new innovation hubs. If hubs can develop a critical mass of companies and
researchers focused on solving a common set of problems relating to Big Ideas, I
have no doubt that venture capital will follow.
Your opportunity is to speed collaboration and build a critical mass of talent and
companies around a common set of problems. This will attract capital. VCs, too,
invest not only in companies, but in communities. These communities should
have enough company mass to enable many investments over time, not just a
handful. It is that critical mass of companies focusing on a common problem that
attracts venture capital. And this critical mass is needed to develop the spinout
cycle that built Silicon Valley.
With next-generation Gigabit networks enabling richer collaboration, we can
tackle, again, the Big Issues.
Thank you, Ignite. I’m confident that at some of the Ignite!-funded Smart Gigabit
Communities here today will help us move well beyond 140 characters. Who
knows, perhaps one of the Gigabit Communities in this room will even re-ignite
our entrepreneurial passion for flying cars.
Thank you!