The New Tipping Point in Innovation Everywhere - (And a Must-Read New Book for Getting it Right This Time)
“[Tipping Points] are a dam breaking. Up until one moment, the dam holds the water back. Then it doesn’t....” — Brad Feld and Ian Hathaway.
A few years ago I was invited to give a speech at a large global gathering and asked to focus on what has been unleashed — for the economies and societies globally - by increasingly universal access to technology in the hands of the new generation.
It never ceased to amaze me how few business executives and policy makers had spent time and attention thinking about the ramifications of 60,70, 80% of populations around the globe walking around with a smart phone — a super computer — in their pockets. Or, more recently, how the latest capabilities from block chain to machine learning were unleashing talent, successful enterprises leap-frogging legacy problems anywhere and everywhere on very local terms.
The presumption that America — once the dominant player in global technology — would have new competition building products of and for rising markets on their own terms was made clear in a rising China. And, of course, as millions of miles of travel since has shown me and anyone willing to look around them — mini “China’s” were rising everywhere. Ask Uber if merely showing up in a market meant they would win it as was once often the case for American tech companies, and their exit from South East Asia with an investment in the largest local competition says a lot.
Thus my one condition for giving such a speech is that it cannot talk about where the next Silicon Valley will come from. While I knew there were great lessons to be learned there —the behavior, mind sent and seeding environment of the Valley remains astounding — it was clear to me that new markets were going to rise on their own locally sensitive terms and those terms would, in fact, unleash a new global approach as billions of new consumers were holding the very means to transact for the first item.
Needless to say, when I arrived at the large setting, I saw a huge sign unnervingly with an almost dictator sized photo of me with the heading: “What is the next Silicon Valley?”
I walked on stage, noted that that speech was one sentence long — “there isn’t one and it’s the wrong question” — and went on to describe a very new unleashing for very new days.
Few people have been as forward thinking about these changing dynamics than the great investor, mentor, writer and coach Brad Feld, among whose previous books Venture Deals, remains on my desk and my go-to book (as both an entrepreneur and investor) regularly. That he joined hands with another great innovation mind, Ian Hathaway, to write (and you must pre-order now) The Startup Community Way excited me no end. They say expressly that it is not a play book, but I respectfully disagree. It is the most cogent, coherent frameworks — filled with powerful data and marvelous stories — of how tech ecosystems can thrive in rising cities here and abroad.
Like great improvisational jazz musicians they riff on an earlier framework Brad created in what he called the “Boulder Thesis” — because his success has been built as an investor NOT in Silicon Valley but Boulder, Colorado. It frames quite systemically that the mark of successful ecosystems of innovation have four elements: 1) entrepreneurs must lead the startup community; 2) any leaders must have a long term commitment; 3) any startup community must be inclusive of anyone who wants to participate and 4) any startup community must have continue activities that engage the entire entrepreneurial stack.
To be clear, while the old saying about Google and other great tech enterprises has been “most overnight successes take eight years” — Brad an Ian remind us that real commitment (from entrepreneurs to investors to large businesses to educational institutions to policy makers) should be thinking about a 20 year commitment. By the way, 20 years starting from today.
Their book, in many ways, delves into the psychology we all share that sometimes unleashes us but also gets in our way. How often do we let linear thinking dominate in what is clearly a complex and non linear world? How natural is it for us to try to control the world around us based on our own experience, narrowing in too specifically to what gives us comfort, and missing the interactions among many narratives and experiences that may challenge the biases that can mislead us? Why do we constantly risk measuring the wrong things — when we rarely hold ourselves accountable at all — and expect right outcomes?
In fact, what they show us from Indianapolis to Israel is that the great innovation economies friendly to startups that can scale embrace the opposite: that control of complex systems is an illusion; prediction is thus often futile; that big things have small and incremental beginnings and take time and will be uneven but helped with great and continuous experimentation; that building off of one’s local strength and understanding build huge success that can scale to similar markets and eventually global adoption.
This last point really jumped out at me as one of the greatest epiphanies of my travels has shown over and over again that startups in rising economies share as much or more among themselves — as distant as Jakarta to Cairo to São Paulo - then with Silicon Valley! Last mile logistics, navigating local regulation, education populations who once never were banked or used a credit card — this all seems a pain to those used to the opposite. It is the very foundation of innovation where the greatest economic growth is likely to come going forward.
Their writing walks us through the key powers of unleashing the entrepreneurs and stopping anything that allows them to succeed, scale and be models for the next generation of success. It details how communities unleash “capital” — intellectual, human, financial, networks, culture, physical and institutional — which are common sense upon reading and baffling that so many political and large business leaders often ignore.
Particularly compelling for me is when they also debunk the “myth of quantity.” Size clearly matters as great companies create great companies and train talent on how to succeed over and over again — the proverbial “PayPal Effect” of priming a rising business hub. But they caution that sometimes ecosystem leaders, business executives and policy makers confuse quantity of money deployed, number of startups, number of investors with success. In fact, if we have learned anything “quantity means averages not outliers.” As they and the great entrepreneurship support non profit Endeavor show again and again, so much happens sustainably in the outliers.
They challenge us all — in our daily support of enterprises, as citizens, as policy makers — to ask repeatedly: “What seems to be working already and where is it not working? How do we better support efforts that are working and wind down those that are not? What do startups need today and how can we help?”
Imagine if these questions were the sole focus day one in solving the Covid Crisis?
So powerfully, and as I’ve written here, while this book went to the publisher before the full force of this virus was known it has only accelerated and confirmed every premise of their book.
They conclude with a question that is really a challenge — that all of us need to step up, be active and not passive and ask what will this analysis do for each of us?
I’m sharing this book with every corporate and policy leader I know as we plot a new world at home and abroad - so we do not sleep walk back to our comfort of what once was, but embrace new potential in whatever is well in process.