Global Innovation Summit + Week 2015 is coming. The world’s largest gathering of “ecosystem builders” happens in Silicon Valley on Feb. 16-20, 2015. Early bird 30% discount ends Oct. 31.
THE BIG PICTURE
Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes
How one entrepreneur’s vision for a text messaging service delivering real-time market pricing helped transform rural Africa. Read more here.
Alistair Brett, International Technology Commercialization Advisor for T2 Venture Creation, from The Innovation Rainforest blog
A look at research that sheds light on the diffusion of information through a social network’s effect on innovation ecosystems, raising questions about the optimal Rainforest model to encourage productive experimentation. Read more here.
MIT Sloan Management Review
A study of 759 companies found corporate culture to be a more critical ingredient for innovation than labor, capital, government or national culture. Read more here.
After a number of theories for revitalizing cities have flamed-out, a new focus on innovation districts could have lasting effects, if civic leaders follow a few simple rules. Read more here.
Social Evolution Forum
Low population densities, our species’ dependence on cooperation for hunting, and other evidence leads some researchers to conclude that human tribal societies could have evolved without a need to fight each other. Read more here.
THE LATEST NEWS
Behind an explosion of new businesses in Britain lies a darker truth about “necessity entrepreneurs” who have been forced into working for themselves. Read more here.
Small startups with an explicit commitment to social improvement could be the right solution for tackling some of India’s endemic problems, if social startups are provided the necessary funding, support, and patience. Read more here.
Despite shaky foreign relations and a reputation for corruption, Russia’s capital is seeing a significant number of quality startups, fueled by the country’s strong engineering schools, online presence, and emerging middle class. Read more here.
By Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes
Our remedies oft in ourselves do lie.
Shakespeare, All’s Well That Ends Well
This interview is the second in a two-part series with Philip Hardin, CEO of YouScience. In our first conversation, we talked at length about the science and epistemology of the YouScience approach to supporting inquiry into purpose, skills and talents. In this second part, we are focusing on the strategy of deploying online what is intrinsically a deeply personal and individualized process.
Doss: In our first interview, you and I talked about the profoundly individualized and unique process of self-discovery, of identifying and understanding personal strengths and weaknesses. With that in mind do you see the online model for YouScience as an advantage or disadvantage?
Hardin: I think developing an online approach to this process is definitely an advantage, especially for young people. It seems obvious to me that we have to reach students where they are, and this generation is incredibly adept at consuming digital content without oversight or instruction. I read a recent Kaiser Family Foundation study that found that youth eight to eighteen years old consume almost 7.5 hours of media daily. So, I think it’s safe to say that young people are comfortable with an online approach, and understand how to use it.
Doss: Well then what about the challenge of personalizing this self-discovery process to the individual? Don’t you run the risk of being “generic” in your approach?
Hardin: Not at all. In fact, I’d argue the exact opposite. We begin by gathering real — not self-reported — data about an individual’s aptitudes, based on engaging exercises. This data, combined with a versatile and interactive online platform, gives us a unique opportunity to personalize the content and deliver it in a highly interactive manner. If you go back to our discussion about the science of YouScience, you’ll remember that we help students navigate fourteen natural aptitudes and six elements of interest. This gives us well over a billion possible combinations and paths for them to explore. I think being online is a powerful way to tailor self-discovery for the individual. But in addition to reaching students where they are, and having the ability to tailor inquiry to each individual, there’s an additional advantage of being online: We solve the problem of access, which is one of our prime societal objectives.
Some students have intimate access to wonderful counselors and mentors, but most, unfortunately, do not. The American School Counselor Association recommends a student-to-counselor ratio of 250 to 1, and to me, even that seems pretty thin. But many public schools in many states exceed a 500 to 1 ratio. Given their common administrative processes and caseload, it is almost impossible for these professionals to offer in-depth individual counseling. Our broadly and easily accessible online platform can provide valuable data to supplement and augment a dialogue with a counselor; but even more important, it gives students and parents the ability to take control of the self-discovery process.
Doss: Still, at its heart, the process of learning “who you are” seems extraordinarily personal. Aren’t there parts of this process that almost demand friends, family and human interaction in general, in order to be successful?
Hardin: Of course. And what we want to do is be both a source of inquiry process, and also a means of mediating inquiry “on the ground.” One of our primary objectives is to inform the dialogue between young adults and their parents, family, counselors and mentors. We do not to want to replace it. The YouScience profile adds process, language, and real data to an often subjective conversation. No online system, offline system, book or other third party learning process is going to know and understand an indiviudual’s hopes, dreams, economic circumstances, capabilities and disabilities in a way that a parent, mentor or counselor will. Our job is to make those conversations richer, more robust and more fact-based, while giving students control over their own educational and career pathway.
Doss: When you talk about YouScience, you mention “democratization” and access frequently. Why is that?
Hardin: I talk about “access” in particular because it’s critical to our societal purpose, and to our business model. Democratization, in our case, means that we have unlocked some precious power or resource, and made it broadly and generally available. We believe in a most fundamental way that individuals should be in control of their personal human development; and we want to be at the forefront of creating a new generation of tools that supports that goal . . . and we want to do that both for the purpose of creating a great business, and because it’s important to our society. Our YouScience program is comprehensive, so that a user can move from assessment to feedback to career discovery to educational pathway, all within a single framework. So, students can pursue a valid self-discovery path 24 x 7 and engage their personal support team in the privacy of their home.
Doss: That’s a pretty big goal! So, with that in mind, if I engage with YouScience as one of the tools I’ll use for self-discovery, what do I actually get? That is, what is the output that you give back to me as a result of my interaction?
Hardin: I want to answer that both generally and idealistically, as well as specifically. On the idealistic side, what you should get is insight: Insight into who you are and — most important — an expanded sense of possibility in your future. Insight yields direction, confidence and motivation. It’s really important to note that while we make recommendations, we don’t give an “answer.” Only an individual can ultimately determine his or her path. For every career, we portray how each of a user’s aptitudes and interests relate to people who are generally in that career. We base that insight on the best career data from public and private sources, so users can inform their decision-making. As a user starts to get a sense of direction, we project the potential educational investment necessary to succeed in a career, including potential majors and necessary credentials.
Doss: So, really, your “product” is engagement and inquiry, rather than a specific output or recommendation?
Hardin: It is actually both. Some of our users have an acute need to “figure it out” and set a direction. They may be facing a particular decision point, such as selecting a post-secondary path, a particular college, a major, an internship or just realizing that their current path is not right for them. For these users we have to deliver a full experience with detailed career and educational recommendations that allow them to deal with the entire decision-making process at one time. Our real hope is that YouScience can engage users during the natural lifecycle of decisions between the ages of 16-26. This is the time in their lives when most young people face critical, pressing life decisions. Their interests evolve with every new experience, and the job market continues to change with innovation and demographic shifts. We believe that the YouScience profile can be a constant resource where they can update their interests and get the latest job market information, so they can see how their opportunities are evolving and optimize their education and preparation path.
Doss: You mention that this tool wants to set a “fundamental direction,” rather than identifying job skills. Is there anything about your model/delivery system that advantages this approach over more traditional approaches? As students progress, how do they use the tool to begin gradually focusing in on the deployment of their skills in the world, after they begin to vector in on a “fundamental direction”?
Hardin: Here’s how: YouScience lays a foundation for skills development and self awareness, not the foundation for a particular career. Building a skill set for a job that pays well but is unfulfilling is not a good recipe for success. By making young adults self-aware of their natural aptitudes and interests in a very holistic manner, we can direct them to the intersection of what they do well, what they love to do and then where those two insights might intersect with certain career opportunities. With that level of insight, they can ultimately chart an informed course for their education and skills development.
Doss: How about speculating a bit on the future of YouScience and the impact you might have on education in general.
Hardin: I’m excited about our story. We started out twenty months ago with a mission, a whiteboard, some smart, passionate people and some mission-oriented investors. We spent much of that time developing, listening, tuning and evangelizing. In the course of that process we constantly affirmed our belief that everyone deserves to figure out a direction to make their post-secondary education as effective and efficient as possible, and as fulfilling as they can possibly make it. And we became firmly grounded in the notion that the goal of helping young people set valid directions for personal development is an intensely personal experience. We are only in the early stages of understanding how to engage social media in this process. Our job now is to turn that great mission and great product into a great business. We will focus on working with counselors, secondary schools, colleges and universities, foundations, students, parents and others to bring the YouScience profile to as many students as we can. With a lot of work and a little luck, we’re confident we can have an important impact on this area of student development.
Global Innovation Summit + Week 2015 is coming. The world’s largest gathering of “ecosystem builders” happens in Silicon Valley on Feb. 16-20, 2015. Early bird 40% discount ends Sept. 30.
THE BIG PICTURE
Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes
Innovation lessons from the risk-taking, inventive, and successful life of the man known as Lawrence of Arabia. Read more here.
A short video presentation by Ade Mabogunje, T2 Venture Creation Advisor and Co-Creator of Rainforest Architects, on the co-evolution of tools and human systems that informed his work with visionary tech inventor Douglas Engelbart. Watch video here.
MIT Sloan Management Review
Even an institution as conservative as Harvard Medical School is exploring new ways to spur innovation within the ranks of its researchers, including an “ideas challenge” issued to more than 40,000 faculty, staff and students, and an “open innovation” experiment at an affiliated translational science center. Read more here.
UP Global (blog)
A slideshow report explores five critical ingredients for entrepreneurial ecosystems: talent, density, culture, capital, and regulatory environment. Read more here.
Young people are increasingly pursuing entrepreneurship as an alternative to a more traditional career path — and even as a substitute for higher educations. See more here.
THE LATEST NEWS
A new English-language tech blog in Iran covers the nation’s startup scene in the hopes of encouraging its entrepreneurs. Read more here.
The French capital makes halting progress toward its goal of joining the world’s first-tier tech centers. Read more here.
Seattle’s latest tech hub is a 20,000 square-foot co-working space inside the region’s largest university. Read more here.
CALENDAR OF EVENTS
2014 University Economic Development Association Annual Summit — Higher Education as a Catalyst for Economic Development: INNOVATION + INSPIRATION + IMPACT
September 28 – October 1, 2014 | Santa Fe, New Mexico
The University of New Mexico’s economic development objectives are fostering a Rainforest in the Desert. The idea is based on the rainforest model for innovation systems (developed by serial entrepreneurs and investors Victor Hwang and Greg Horowitt).
Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Social Evolution Forum
Quick, think of a village. What do you see? Each person’s mind creates a distinct picture. Perhaps you imagine storybook timbered houses clustered around a town square? Maybe you recall scenes from your childhood hometown? We each have a personalized notion of the concept of village.
But what if our brains are fooling us? What if the village of our minds—a physical place—is not the same as a village in an economic sense? Maybe “economic villages” should not be geographical places, but something else. When thinking of economic villages, I believe it helps to shift our unit of analysis from villages based on geography to villages based on ideas.
The thoughtful articles in this series from Wilson and Hessen, Witoszek, Richerson, and Trägårdhexamine Norway and Denmark—physical places—as models for a global village. I’d like to offer a different perspective. I’m not a scientist like these talented scholars. Instead, I build startup companies tackling tough challenges, and I help dozens of cities and countries building their own “economic villages.”
What have I learned in my work? Simply this: all new economic value is created by human beings organizing around ideas. Every single product, service, solution, or organization today was originally birthed, shared, and brought to life by people based on a starting notion. That idea turned into a vision which increasing numbers of people rallied around, with their valuable contributions of talent, capital, resources, and complementary ideas. And that vision, through hard persistence and collaborative risk-taking, eventually became something useful and real. Entrepreneurs and innovators are like builders of “flash villages”—custom-built, organizational networks to turn ambitious ideas into useful reality.
Yet the process of turning ideas into villages is hard. Ideas take time to spread. Innovation is a form of socialization. Think of the entrepreneurial process itself, not in the abstract, but in the mundane tedium of day-to-day labor. It’s an entrepreneur pitching the hundredth investor to take a leap of faith. It’s a salesperson trying to persuade the fiftieth customer to take a chance on a new, untested product. It’s a team of engineers trying to invent a product to challenge a large company, but with only a thousandth of the resources. These are typical startup stories. Ask any veteran entrepreneur, and they’ll tell you that a huge amount of time is spent story-telling, pitching, recruiting, rallying, motivating, convincing, selling, encouraging, and arm-twisting others. In short, village-building.
Here’s a visual way to look at this process:
I call this the Rainforest Curve—it’s my attempt to unify what I’ve observed in my empirical work in a single diagram. As ideas grow into products, from left to right over time, their beneficial value increases. The process of value creation is driven by positive-sum behaviors, like love, openness, serendipity, play, and diversity. You see this work manifested in real life by entrepreneurs, designers, inventors, artists, and the like. As ideas grow, however, they confront the cost curve, which exerts constraints on the realization of ideas. The cost curve is driven by zero-sum behaviors, like competition, excellence, dependability, precision, and loyalty. The intersection, where the curves meet, is usually a brick wall. The norms are in conflict with one another. The resources are finite. Most new ideas die on the left. Most aging institutions die on the right. The crossover is the hardest part. That is where evolutionary fitness happens.
Entrepreneurs cannot build villages by leapfrogging the process from left to right. One has to go through the journey, heartaches and all. But fortunately, we know today that the process can be accelerated. There are more and more proven techniques—such as mentoring, design thinking, role modeling, startup incubation, prototyping methods, measurement tools, online communities, and leadership development—for accelerating the innovation curve.
But doesn’t geography matter? What about the Nordics? Yes, geography still matters, but not as an end in itself. Geography matters because physical proximity can breed trust, speed the adoption of norms, and accelerate the flow of resources. To build economic villages, we should focus on building those trust and norms, but not necessarily correlated to geographical units of analysis. Think of an economic network that has strong trust and norms without physical proximity. You already know many. For instance, when you step onto a United Airlines flight in a faraway land, have you actually built face-to-face trust with the hundreds of people to whom you have now entrusted your life? Countless thousands of people are working every day to provide you beneficial things, based on a collective idea of what you need, how to fulfill that need, and how to make the solution tangible and deliverable to you. That sounds like a global village to me. We should make new such villages easier to build.
So what’s the big deal with changing our unit of analysis, from geography to ideas? What are the implications?
One, it gives us a better angle of attack for interventions. Changing the culture of communities, cities, and countries is hard. But to start, creating a network of entrepreneurs and innovators with a shared culture and a collective desire to create new organizations to tackle big problems is definitely doable. Those networks can indeed be local, and they can grow quickly. It’s often more effective, say, to support entrepreneurs working to expand access to clean drinking water bottom-up than it is to change global water policy top-down.
Two, it provides clarity for understanding. Abstract concepts like village or country or company can get in the way. They are manifestations of human organization, but they are not the true thing that drives the creation of economic value. What really matters are the countless, invisible interactions every day consisting of people chatting, sharing, transacting, and building together that form an economic web across the human race. Entrepreneurs and innovators are the builders of new, valuable strands that strengthen the web.
Three, it tells us what to measure. If we know that economic value is generated at the level of human-to-human interactions, as individuals organize together to form firms that create products and services, then we need to measure those interactions better. The stronger the trust and norms that foster such interactions, the faster the innovation process, the faster the building of villages.
Finally, it changes the way we think of social good. Social good is not something to be imposed from above. Instead, different concepts of the social good can be decentralized, democratic, and allowed to rise up from below. What is definitely not socially good is a rigid system that won’t evolve to fit a changing world, one that kills good ideas trying to overcome the cost curve. We should strive to even the playing field so that entrepreneurs and innovators—driven by positive-sum norms, passion for solving big problems, and desire for leaving a legacy in the world—are allowed to flourish and turn their budding ideas into vibrant villages.
Victor W. Hwang is CEO of T2 Venture Creation, a Silicon Valley firm that designs ecosystems to foster entrepreneurial innovation, and primary co-author of The Rainforest: The Secret to Building the Next Silicon Valley.
By Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes
Well, who are you? (Who are you? Who, who, who, who?)
I really wanna know (Who are you? Who, who, who, who?)
Tell me, who are you? (Who are you? Who, who, who, who?)
‘Cause I really wanna know (Who are you? Who, who, who, who?)
–The Who: “Who Are You?”
If there is anything certain about the experience of new college students, newly arrived at new schools, pursuing a new stage of life it is this: They will be confronting one vexing question, every day. This question will influence what they choose to study, and what they pursue outside the classroom. Their parents will ask this question constantly; advisors, friends and teachers will ask this question, even when they’re not asking it. It will be the one constant in their educational experience, the dominant concern. It will trump everything else. That question is:
“What are you going to do?”
It is exquisitely ironic that for all we do to provide education, that we do so little in a structured way to support inquiry into this question. Practically speaking, no matter how well-prepared students are to perform academically, seldom are they prepared to address the central question of purpose.
Philip Hardin, CEO of YouScience, believes he and his team have developed an innovative approach to helping students develop a focused but highly flexible sense of purpose and direction early on in their education. They have combined a science of aptitudes and ability with a user-centric online platform to deliver on their mission to help students find a “path that’s right for them.” We talked at length recently about how science and technology can contribute in a significant way to what is essentially a highly personal and subjective issue.
Henry Doss: I must say, finding a methodology to help address that “what will I do with my life” question seems daunting. What led you and your team to tackle this?
Philip Hardin: You’re right, it is daunting. That “what do I do with my life” question plays out in households across the U.S. and abroad. With the rising cost of college and 50% under-unemployment for young adults, the implications of not having a thoughtful answer are greater than ever. Colleges and universities are properly focused on delivering an education. However, “purpose” often does not get the attention it deserves. Students must answer two crucial questions to direct their education: 1. In what career(s) am I most likely to find both fulfillment and success? And 2. How should I design my college experience to get there from here?
Doss: Of course, just about every institution offers career counseling, experiential learning and so on. What does YouScience offer that is not there in the universe of currently offered support?
Hardin: Career centers can be a wonderful resource to students; however, there is usually a substantial gap between career centers and the academic advising process. YouScience is uniquely positioned to be accretive to those existing support systems. Our focus is very specifically on the student. What we do is take what can be a random and perhaps unmotivated process and turn that into an energized, deliberate experience of discovery and preparation. We are successful when students become better buyers of education and more self aware of their potential and possibility.
Doss: A skeptic might say that the discovery of human potential is very much a human process. Your product is an online tool. How does that compare with and compete with human interaction with students?
Hardin: That’s a really good and important question to address. We see YouScience as a kind of “democratizing” approach to developing purpose and self-awareness of aptitude. We do that by taking the best available science and wrapping it in an engaging product. So, we can deliver a highly personalized career discovery process to that student who has no available counseling. But we can also deliver that same support to those students who do have access to professional or in-school assistance. We have many schools and counselors delivering the YouScience profile as part of a bundle of services, and that’s a great approach. But, the YouScience profile is written to be understood by students and their parents. It does not require professional interpretation and is available to any student, anywhere, any time.
Doss: This leads me toward another area of concern. There is enormous pressure on educational institutions to address “jobs” and “employment” and “competitive income results.” The danger, of course, is similar to “teaching to the test.” We end up approaching education as little more than a vocational exercise. Does your theoretical framework point toward “jobs” or does it focus in some other dimension?
Hardin: That may be the most important – and most nuanced – distinction we will talk about. I really think we lose substantial value when we talk about “jobs,” rather than talking about purpose. Jobs will come and go and change substantially over time. What students need to do is understand who they are, what they’re good at and what will be meaningful to them over time. So, our first objective is to help the student build a foundation for decision-making. We don’t intend to tell them what they should do; we help them decide for themselves.
Doss: That seems incredibly important to me.
Hardin: It is. What we have found is that students love learning about their giftedness and how it applies to work, school and social contexts. But they don’t generally have a framework for understanding what they love and what they do well in the context of work. We help students combine aptitudes and interests in a way that helps them apply those talents to career and education choices. And given the rapid pace of change and innovation in our world today that ends up being eye-opening. For almost all students, we expand, rather than narrow, their vision and opportunities. Most students only know a few potential careers from the contexts of family and their community, and this can be dangerously misleading and uninspiring. We help them apply their giftedness to the broader career marketplace and give them the insight to see the careers that are increasing in economic viability and availability. So, students can then begin to set a path of intentional discovery and use their education to create more options, not eliminate them.
Doss: On one level it seems that you introduce more complexity into the process, by increasing options rather than narrowing them. But, at the same time, you seem to be increasing opportunity. And this seems to me to be linked to students exercising more autonomy and accountability for the process of discovery.
Hardin: I think that’s right, because we do not want to usurp young people’s ability to think for themselves. Ultimately, every young person has to control their own path to independence. Giving them an “answer” is ineffective, and almost patronizing. What we want to do is ignite that intrinsic motivation that every student has, rather than rely on external forces. That motivation begins with understanding their own giftedness and seeing that there are real opportunities for them to pursue. Once they see the possibilities, then they explore and set a direction for their education and begin building options for themselves. I think the majority of young people do not want to be left behind. They want to succeed, and they want to make a difference in the world. They just need better tools for self-discovery and decision-making.
Doss: So, in some sense aren’t you as much about helping students understand something like “life experience” or “purpose” as you are about “jobs”?
Hardin: I think that’s right, in some very important ways. All of us know that, ultimately, everyone figures it out. But the real question may be when and at what cost? Life tends to reward those who discover their path sooner. What we want to do is accelerate the personal discovery process and expand young people’s vision of the opportunities available to them. If we can do those two things, and at the same time, provide a method for “mapping” those talents to the world “out there,” then we will have been successful in our mission.
Doss: Speaking of success puts me in mind of measurements, and grades and value assignment. Your process does not assign scores or rankings or any relative or absolute values of “performance.” Why is that?
Hardin: Believe me, this is not about giving every student a participation trophy. For me, it works like this: All humans are a portfolio of particular talents or natural aptitudes and each individual will have a unique, personal mix of these aptitudes relative to the population around them. We want young people to focus on their strengths, not their weaknesses, and everyone is some mix of both. For example, you might not be inclined toward numerical reasoning, but be great at idea generation and inductive reasoning. This might indicate that you would really enjoy work that involves solving certain kinds of strategic problems. But if we assign you scores on these attributes, you are very likely to focus on the low score, rather than on the real gifts that you have.
Doss: And in your world this is not just a good idea, or a feel-good approach, right? You would argue that there is a clear scientific model for taking this approach.
Hardin: Yes! The science of aptitudes — what we naturally do well — and the science of interests — what we enjoy doing — are the foundation of our approach. Both of these scientific areas are quite well established. We do two really unique things that take the science a step further. First, we combine aptitudes and interests into a single algorithm to create a more reliable way to make career recommendations. Basically, the algorithm identifies someone’s “fit” by combining what they do well with what they love to do and what the market needs them to do. The second real innovation—and a critical aspect of YouScience’s sociology—is what we talked about earlier and that is that we have “democratized” this science by making it available in an engaging, easy-to-use online service.
Doss: Do you view the YouScience approach and model as innovative or simply a creative aggregation of existing technologies and sciences?
Hardin: Of course I’m biased but I think we are being very innovative in our approach, and we challenge ourselves to remain innovative. At this stage of our development, our most important innovations relate to usability and distribution. We continually ask this question: “How can we keep delighting users and enabling them to distill the necessary insights quickly and in a way that motivates them to pursue their career and educational decisions in a deliberate manner? What new data can we introduce that will better inform our users’ search for their highest potential?”
Doss: So now that we have a bit of understanding about the epistemology of your approach, let’s turn next and look at the actual practice and technology of how you deliver your model.
(This concludes the first installment of a two-part interview with Philip Hardin, CEO of YouScience. The next installment will focus on the online deployment strategy of the YouScience model.)
By Neeraj Sonalkar, T2 Venture Creation Advisor, research associate at the Center for Design Research at Stanford University, and a co-director of VentureStudio in Ahmedabad, India
Ahmedabad is a city known for three things – for being the home of Gandhi’s Sabarmati Ashram, for hosting India’s premier design and management schools, and for its textile industrial families. A tier II Indian city of around seven million inhabitants, Ahmedabad has multiple communities that sometimes interact around popular street-food stalls in the night. The affluent Gujarati business families jostle with the more cosmopolitan students of design, engineering and management schools in the region, and the not-for-profit crowd following Gandhi’s principles in uplifting the poor. It was in this social milieu that the seeds of an innovation ecosystem, a Rainforest were planted in 2011.
Ahmedabad University, an upstart educational institution in collaboration with Center for Design Research at Stanford University established VentureStudio, a center for innovation ecosystem design. The vision of its founders was to nucleate an innovation culture similar to the likes of Silicon Valley in the US, which would result in a greater yield of high impact technology ventures. This article gives a brief overview of the thinking and the doing at VentureStudio.
It is 9 am in the morning. A group of young entrepreneurs and design coaches gathers in a circle on the VentureStudio patio for daily reflection. They all write silently in their notebooks for 5 minutes and then one-by-one share their reflections on the past days’ activities – things that influenced them, feelings about their performance, and insights they learned. The coaches then take over and lead the entrepreneurs in a series of venture design activities. Today, the group is participating in conflict-handling experiences. In the past, these venture founders have participated in need-finding to gain user empathy, teamwork training, foresight analysis, concept elaboration, prototyping, business modeling and similar such activities all oriented to transform them into innovation leaders.
The heart of VentureStudio is the six-month fellowship program that coaches entrepreneurial hopefuls into innovation ninjas. Much like martial arts, we believe that innovation is a contact sport. The first five weeks of the fellowship present fellows with an intense workout of activities and reflection moments that help rebuild their self-image, develop self-efficacy to collaborate, and acquire design and business innovation skills. Coaches… we call them coaches and not mentors or professors to emphasize a bias towards action… follow a design pedagogy that relies on iterative whole-body engagement. They conduct a series of flash ventures which involve designing a complete venture from need identification to solution development, to prototyping, business modeling and raising investments in a very short amount of time. The first flash venture lasts three hours, the next a few days, the third a few weeks. With each flash venture, the fellows grow into new perspectives, new imaginations and new skills that prime them to become the innovation leaders of an ecosystem. Thus, the fellows are already serial entrepreneurs before they tackle their venture during the rest of the fellowship.
VentureStudio is more than a bootcamp for innovators. The fellowship program and the launching of ventures is an active probe into the local innovation culture. As the founders interact with the surrounding ecosystem to develop their products, seek advice from local leaders, raise funds, and acquire customers; the challenges and opportunities they encounter give a window into factors that hinder or help the growth of ventures in Ahmedabad. The coaches working at VentureStudio identify these factors and design interventions to overcome challenges and leverage opportunities. For example, the coaches realized that the investor ecosystem in Ahmedabad was missing angel investors who could invest not on the basis of profit & loss statements, but on the basis of recognizing the potential of the team and a foresight for the market. Prafull Anubhai, the Ahmedabad University chairman galvanized the local business leadership into setting up the Ahmedabad Venture Alliance, a mentor network with an associated angel fund to provide angel investment. Another factor that coaches identified, as key to venture success in Ahmedabad was family support. Initially a number of venture teams broke up when one or more founders were not supported by their families in their vision. Family support is of crucial importance in Indian culture where parents have a greater influence on their adult children’s decisions and growth. VentureStudio broadened the concept of founding teams to founding families and set up events to sensitize families of young founders to venture creation process and the work that their children were undertaking.
VentureStudio, thus acts as a nucleus of an innovation sub-culture within the surrounding Ahmedabad ecosystem. However, VentureStudio is not a passive nucleus. It actively seeks to diffuse this culture within the surrounding ecosystem and in the process create a rainforest that is a unique blend of local values and innovation process imperatives.
In the three years since its inception, a strong foundation has been created for this unique model of building an innovation ecosystem. VentureStudio fellows have created ventures in various domains such as digital publishing, urban farming, education, healthcare, art retail and energy generation. The successful acquisition of one such venture, Cruxbot, has demonstrated the potential of financial returns following this model. A group of local business leaders have coalesced around VentureStudio to form an angel network and a mentor group. A product development ecosystem is being mapped to accelerate product innovation. The process of nucleating this ecosystem is ongoing. The hope is that in a decade or so, Ahmedabad will now be known for a fourth thing – a vibrant and thriving innovation rainforest.
By Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes
We sign them all the time. They usually seem harmless. They’re often considered just a matter of custom. However, they can be far more harmful to entrepreneurial ecosystems than they appear on the surface.
I’m talking about nondisclosure agreements—NDAs. They are a common tool of business between parties who want to share sensitive information. I was recently quoted in The New York Times about NDAs, and I got a number of responses about it. Here’s the quote:
“Each time an N.D.A. is signed, it stalls the conversation for a week because of the legal work involved, Mr. Hwang said, and over time, that can give a competitor the opportunity to enter a market first. “In the life of a start-up company,” he said, “you might have to sign 30 to 50 N.D.A.s. That’s a week each time and a year of holdups. The risk of going slow is bigger than the risk of being copied.”
Let me provide some nuance missing from this extract. Yes, NDAs have an important purpose. But there’s a big difference between Silicon Valley and most other places when it comes to how and when NDAs are used. In the Valley, startups rarely sign them when beginning a relationship with someone, like a possible employee, partner, investor, or consultant. NDAs can come later, after a working relationship has started, when things need to get deeper.
In other geographies, however, it’s often different. My firm does a lot of work in ecosystems across the U.S. and the world. We find that NDAs are usually the norm for everything. Startups sometimes won’t give you the time of day without an NDA already signed, sealed, and delivered before a conversation even starts.
Why the difference? What does it mean for entrepreneurial ecosystems? I’ve discovered that the use of NDAs can be a useful thermometer for the health of an ecosystem. Allow me to explain.
Contracts are not just contracts. As every first-year law student learns, they are tools for overcoming distrust. They can outline what is expected from each party when the future is uncertain. They can allocate responsibilities and costs.
Disputes may arise, that’s life. Someone doesn’t deliver what they promised to deliver. Someone doesn’t pay what they agreed to pay. Contracts can hold parties accountable. Timing, methods, costs, who, where, when—contracts are useful tools for aligning expectations, allocating risk, and most importantly building trust.
But NDAs are a special sort of contract. By their very existence, they implicitly announce that a handshake is not good enough. They basically say, “I don’t trust you.”
This matters because distrust is the silent killer of innovation. When parties ask for NDAs too early, it can stifle relationships before they are born. Or they can slow down relationships for extra days, weeks, even months. They can add suspicion and sow the seeds of disharmony later.
In the aggregate, over the life of a startup, lots of NDAs can build up and create an aggregate drag. Startups don’t usually die from hammer blows; they die deaths of a thousand cuts. Think about it. If you have to sign 50 NDAs in the early life of a startup, and each one takes a week to sign, you have just lost 350 days in the life of your company. And speed is the lifeblood of startups.
The restrained use of NDAs by startups is one of those little advantages that makes the Valley the Valley. The norm emerged not as a way for venture capitalists or corporations to take advantage of startups (although that does happen sometimes), but rather as a way for startups to move faster. In order to succeed, entrepreneurs must rally a series of hundreds of prospective partners, employees, customers, suppliers, investors, providers, etc. For startups, apathy is often the worst enemy. When the task is so great, and speed so crucial, it’s more efficient when handshakes can substitute for formally written contracts.
Most ideas aren’t that original anyway. It’s the execution of the ideas that makes the difference. As Michael Dell of Dell Computers once said: “Ideas are a commodity. Execution of them is not.” Worrying needlessly about giving away your idea can make you look like a paranoid amateur.
Furthermore, NDAs are not that easy to enforce anyways. W. Scott Blackmer, an IT lawyer, writes about NDAs: “Litigation over NDAs can be costly, public, and ultimately unsatisfactory to the party claiming a breach, especially if it is hard to prove the intended scope of the agreement and the actual source of the information.”
This is not to say that NDAs don’t have their place. As relationships progress and some basic trust has been established, an NDA might be appropriate, particularly when technical details and proprietary secrets come into play. When discussions begin to revolve seriously around how to bring ideas to implementation, pulling that NDA out of the drawer might be a good move.
The free flow of ideas
One of the reasons places like Silicon Valley thrive is because people serendipitously bump into each other and share their ideas freely. You feel it everywhere you go in the Valley. People are yapping all the time, like dogs at a kennel.
And it’s not just the Valley anymore. Other places are catching on as well. This is the goal behind Zappos CEO Tony Hsieh’s reinvention of downtown Las Vegas into an environment ripe for such interactions.
There’s plenty of historical evidence for this notion as well. Stanford economist and social theorist Thomas Sowell points out that Europe’s geography (particularly the presence of several large, slow rivers and natural harbors) facilitated the sharing of information, thus promoting Europe’s technological leap ahead of the rest of the world during the 18 and 19 centuries.
Too many NDAs slow the flow of ideas across an ecosystem. An environment of distrust and paranoia stifles communication. This in turn slows innovation. And this in turn slows economic activity. Thus, individual actions can shape entire economies. Ecosystems are the sum of the countless daily interactions that occur across a vast invisible web of individuals connecting, sharing, and building together.
In short, the more there is trust, the less we need contracts, the faster the ecosystem goes.
Victor W. Hwang is CEO of T2 Venture Creation, a Silicon Valley firm that builds ecosystems to take great ideas to scale, and primary co-author of The Rainforest: The Secret to Building the Next Silicon Valley.