Silicon Valley – The Entrepreneurial Perfect Storm
Ten months ago, Telfer’s EMBA promise of a Global, Practical and Relevant experience caught my attention at the very first read. Two semesters later and one day into our trip in Silicon Valley, this promise resonated to its fullest while I was thinking of the week to come while sipping Pinot Noir in the middle of the Santa Cruz mountains on a beautiful Saturday afternoon.
Our first event of the week was a tour of the Savannah-Chanelle Vineyards. For a business located at the epicenter of the Connected world, one would expect that their website be trendy and offer a great user experience. Given that it has been under construction for the past 7 years, rightly so, the owners recognized that neither words nor pictures could appropriately convey the exquisite beauty and charisma of the location. It could have been the walk across the century old vineyards, the tasting of delicious wines, the perfect balance of sun and breeze or the majestic
scenery composed of valleys and hills, but it was clear to all of us that we were in another world and needed to soak in every single minute of the following days.
After a well-deserved sleep, our class reconvened on Sunday morning to discuss what it is about Silicon Valley’s ecosystem that fosters so much innovation. When considering that there are 34 billionaires in the Valley, that California issues 25% of US patents and that the average local university grad will have held 14 jobs before (s)he turns 37, it is easy to see that there is something special about this place. And when comparing Ottawa’s 83rd place ranking to Silicon Valley’s #1 ranking on the World Knowledge Competitiveness Index, it is not surprising to see why this trip is a key learning component of Telfer’s EMBA program.
Similar to a well-implemented strategy, it is not a single element that creates the recipe, but rather the fit between an intertwined web of factors that produce the Valley’s unique environment. For example, the Valley offers an incredible support system through well-established Professional Services Firms, Business Incubators and Training & Education institutions. Silicon Valley also hosts many Angel Investors whom inject on average $500,000 into start-ups to find the next Google or Facebook. This represents tremendous amounts when considering that there are more than 22,000 tech start-ups in the Valley every year.
Beyond the support system, this risk taking culture promotes a totally different meaning of the wordfailure. Instead of being seen as a bad thing and needing to be sheltered within each individual’s deepest secrets, failures are openly shared and worn as badges of honor as the unexpected outcomes represent tremendous learning experiences. In fact, to the eyes of many investors, an entrepreneur that failed a few times is like hiring an employee for whom another employer paid the tuition fees; the entrepreneur acquired vital lessons learned and is then less likely to lose the investor’s money. This total paradigm shift was perfectly embodied by our customer Lief Storer, CEO of Boombotix that we met on Sunday afternoon after heading North on the US-101 up to San Francisco. His fast growing startup-up builds loud and wireless portable speakers. As part of our Innovation and Entrepreneurship course, we completed a consulting engagement for Boombotix to help them increase their brand awareness and online sales. Our group met with Lief and his team in person at their garage-like headquarters to present our recommendations. It was energizing to meet the Boombotix’s young team of entrepreneurs, which was overflowing with passion, appetite for success and possessed a surprising depth of knowledge for their age. On Monday, we headed to Palo Alto to visit SNR Denton, one of the world’s most successful law firms. In the morning, we heard amazing talks from Chris Albinson, Managing Director at Panorama Capital, Steve Bengston, Managing Director at Price Waterhouse Coopers and Alfredo Coppola, President and Executive Director of the US Market Access Center. Throughout each of the three talks, one theme that came out loud and clear was the need to: “Think Big”. Indeed, each speaker portrayed ambition, perseverance and passion as being critical skills for entrepreneurs. We also learned interesting information like the fact that there are 300,000 Canadians and 47 Canadian Venture Capitalists in Silicon Valley, that 40% of all of the Venture Capital money invested in the world last year was invested in Silicon Valley, that 0.5% of all pitches to VCs successfully receive investment and that Software, Biotech, Medical Devices and Clean Tech are the industries which received the most investments last year.
After a quick pit stop at the Birthplace of HP on Addison Avenue, we headed out to visit Stanford University’s beautiful campus. There we met Professor Richard Dasher of the Department of Electrical Engineering whom talked about the dynamics in Silicon Valley as well as the upcoming trends. Dasher reiterated, in a very compelling way, many of the concepts that make up Silicon Valley’s entrepreneurial culture. We also learned that the percentage of the population which are entrepreneurs is very close to the US national average. This reinforces the efficiency of the Valley’s unique environment as it is not the quantity of innovation that differentiates the Valley, but more importantly the quality of the innovation, fueled by the location’s ecosystem. Dasher concluded his talk by talking about the next big trends which are: On the short term: Cloud Computing, On the mid term: Cleantech and On the long term: Wellness and Life Sciences.
You only have one chance to make a good first impression and so far, this trip has certainly lived up to our expectations. In these first few days, we have been able to experience many of the key ingredients to the Valley’s perfect entrepreneurial culture: Ambitious entrepreneurs with great ideas (Boombotix), Venture capitalists (Panorama Capital), Professional services (PwC & SNR Denton), Business incubators (US MAC) as well as Training & research (Stanford). Reunited, all of these elements really do create the Perfect Entrepreneurial Storm.