Arizona has a burgeoning innovation ecosystem but are incubators the real source of this new-found start up dynamism?
While some applaud the incubators that are being created, others say there are too many and that they lack focus. They are popping up across the country “like weeds,” said Victor Hwang, co-author of the book “The Rainforest: The Secret to Building the Next Silicon Valley.”
“They (incubators) can work, but they don’t always,” Hwang said. “Historically, they have not, and the reason they haven’t is because most incubator (operators) treated them as real estate. They give them (entrepreneurs) space. They figure they gave them Internet broadband and they gave them cheap rent, and that was enough.”
Incubators are successful, he said, when the operators understand how to bring participants together to share ideas.
Check out the article to learn more about the why and how entrepreneurship is taking root in the desert.
Both NYConvergence and Capital New York have picked up stories featuring the cultural divide that forms the basis for Silicon Valleys consistent relative dominance in technological innovation over New York:
In today’s Daily News, Silicon Valley venture capitalist Victor Hwang argues that in order for New York to compete with Silicon Valley—something Mayor Michael Bloomberg would very much like to see happen—it needs to become less of a dog-eats-dog city.
According to Hwang, Silicon Valley’s success comes from a spirit that is not yet ingrained in NY. The Valley’s culture encourages people with diverse skills and experiences to meet and trust each other, to take a risk together. Though Hwang acknowledges that NY may be revered as the cultural capital of the world, establishing the next Silicon Valley requires a new culture to take shape, one that becomes a beacon of trust rather than suspect. Ultimately he feels that the startup community in NY is working to build that culture, but it needs more of the city to join them in order truly to evolve.
What do you think, can New York replicate Silicon Valley’s success?
Victor W. Hwang, co-author of The Rainforest: The Secret to Building the Next Silicon Valley and managing director of T2 Venture Capital in Silicon Valley, firmly believes that entrepreneurship cannot be taught in a regular classroom. “Why? Entrepreneurship is messy. For an entrepreneur, there are rarely clear-cut right or wrong decisions day to day. Real life gives entrepreneurs the ability to better make those kinds of judgment calls,” he told Wall Street Journal.
Hwang believes comparisons to traditional business education don’t hold up because many critical entrepreneurial skills, like understanding people, can’t be fully developed in the span of a semester or even a few years. He is aware of the recent boom in entrepreneurship education, but says that teaching entrepreneurs to avoid failure may actually cause harm to them. Entrepreneurs hone their craft through experimentation and collaboration, and helping entrepreneurs teach themselves is a better idea than trying to teach them in a traditional sense.
What do you think? We’re looking forward to hearing your perspectives in the comments.
Victor throws down the gauntlet in the Wall Street Journal in a debate on teaching entrepreneurship with Professor Noam Wasserman of Harvard Business School. Empirically, our conclusion is clear: the best class is real life. Check out the entire debate here:
Entrepreneurship can’t be taught in a regular classroom any more than surfboarding can. To learn it, you have to get your feet wet in the real world.
Why? Entrepreneurship is messy. For an entrepreneur, there are rarely clear-cut right or wrong decisions day to day. Real life gives entrepreneurs the ability to better make those kinds of judgment calls.
Here are some great pictures from the recent Rainforest book talk at the Tech Coast Angels (TCA) event hosted by UCLA. The audience couldn’t stop asking about how to help build a rainforest in Los Angeles. TCA is the largest angel investor network in the U.S. whose portfolio companies have attracted over $1 billion in follow-on funding.
With Greg Smith’s scathing goodbye to Goldman Sachs at the top of world headlines, the world’s trust in Wall Street continues to crumble. But if there is something very amiss in the culture of the world’s most powerful financial institutions, what can leaders rely on to build a brighter future for the world economy?
Victor’s recent op-ed in VentureBeat explores many of these questions…and poses a few answers.
In the wake of Greg Smith’s now-legendary resignation in The New York Times, worldwide scrutiny has naturally focused on Goldman Sachs. How will his assault on the bank’s culture impact its clients and its leadership? Is his description of the firm fair? However, these are merely superficial questions. The true implications are far broader and affect the prospects for economic growth across America and the world.
Smith’s accusation — that “the interests of the client continue to be sidelined in the way the firm operates and thinks about making money” — is not novel to Wall Street. It has already been 25 years since Gordon Gekko uttered the iconic phrase “greed … is good.”
We were having a conversation about the Rainforest with a friend of the firm who is a VP of a major telecommunications company with a lot of direct experience in Silicon Valley. We were discussing how the most innovative regions are characterized by companies and leaders that seek fairness over advantage in the relationships they develop. This environment of fairness acts like grease for the trust-building wheel and encourages people to try out new ideas, no matter how crazy they are. But our friend pointed out an interesting trend from his experiences:
I agree that pragmatic cooperation is the order of the day in Silicon Valley but don’t necessarily believe that established businesses in the Valley are “in it for fairness rather than advantage.”
Perhaps this Rainforest view is more true in the startup phase where potential is so huge that it drives a “just get it done” approach whereas in established players’ business models the mantra is increasingly “get it done in this particular way as it matches our strategy and works with our alliance fabric.” This second perspective is definitely more like New York.
We love to hear different viewpoints and input on the Rainforest. Indeed, open and honest dialogue is part of what helps to generate a culture of innovation. What do you think? Do companies go from seeking fairness at the startup stage to advantage once they grow? Are large companies interested in or able to maintain their relationships based on fairness once they establish themselves?
The Wall Street Journal recently quoted Victor in an article that investigates one of the toughest challenges for entrepreneurs: balancing the needs of their new businesses with health, family and personal time.
Victor W. Hwang, a small-business adviser and venture capitalist in Los Altos, Calif., says making your start-up a top priority is—at least to some extent—necessary for success. “You have to do it. You have to be willing to make huge sacrifices that a person with a normal job wouldn’t have to do,” he says.
Still, he warns that it’s also important for entrepreneurs to avoid going overboard by putting their lives or relationships with loved ones at risk. “The goal in entrepreneurship is to not get so consumed that it eats you up,” says Mr. Hwang, also author of “The Rainforest: The Secret to Building the Next Silicon Valley.”
One tip he has for keeping relationships intact while building a business is to sit down with close family and friends early on and let them know what your schedule is likely to entail.
“Make sure everyone’s expectations are clear about what it’s going to take,” he says. “You need to put everything on the table.”
How do you think entrepreneurs can strike the right balance between work and life? Give your answer in the ‘Comments’ section below and we’ll send the person with the most creative answer a shiny new copy of Victor and Greg’s groundbreaking book, The Rainforest: The Secret to Building the Next Silicon Valley.
Cities around the world have spent billions of dollars trying to re-create the extraordinary success of Silicon Valley’s entrepreneurial spirit. Among the most vigorous competitors in this regard has been New York City.
Yet New York’s biggest challenge is this: The secret to building the next Silicon Valley is not only in the assembling of necessary ingredients (talent, ideas and capital) but also the culture needed to allow those ingredients to flow freely into newly formed companies.
The Woodrow Wilson International Center for Scholars‘ Program on America and the Global Economy just published a new editorial about Victor and Greg‘s new book, The Rainforest: The Secrete to Building the Next Silicon Valley:
For over a decade, Silicon Valley has been a hub of technological innovation and the home of some of America’s best known and fastest growing companies. Think Apple, Google, and Facebook. As the U.S. seeks to restore its economic advantage, academics, businesspeople, and policymakers alike have turned to Silicon Valley as a model for jumpstarting economic growth. The primary focus has been on innovation and the development of the next wave of technologies that the American economy can ride to renewed prosperity. However, this task is much easier said than done, for creating a thriving entrepreneurial ecosystem takes effort and purpose.
Check out their fascinating post!