Farewell, Silicon Valley
This is bittersweet to write. After 9 years in Silicon Valley, I’m moving.
It has been a journey at times thrilling, surprising, and agonizing. But never boring. I want to share with you a few takeaways. We’re also making some changes at T2 Venture Creation, and I want to share those with you too. We’re spinning out our consulting practice into a new firm, Rainforest Strategies. And we’re ending our lovely newsletter.
Starting next week, I’ll be the Vice President of Entrepreneurship at the Kauffman Foundation, based in Kansas City. The job truly excites me. It’s an opportunity to transform the startup economy and touch millions of lives. If I had to design a “dream job,” this would be it.
But I’ll miss the Valley. I admit it – when I moved here, I wasn’t sure I’d like the Valley. But we were starting a new and unique venture firm, and it felt obligatory. I had to be in the Valley. So I dived in. I breathed it, absorbed it, dissected it. And eventually I became a part of it, helping shape its ecosystem and hopefully making it even better.
In the process, I developed a deep understanding of what makes the Valley tick. I wrote and co-wrote a few books about it. I started a conference for “ecosystem builders” from 50 countries. I co-founded a startup making the world’s fastest, finest filters for safe drinking water. We even won TechCrunch Disrupt – you can check out our awesome product here.
Here are a few parting reflections from nearly a decade immersed in Silicon Valley.
First, culture is everything. People talk about culture a lot. But until you’ve spent serious time “in the trenches” of an innovative, high-speed, high-risk environment like the Valley, it’s hard to really understand.
How to describe it to someone on the outside? Remember that time in your life when you stuck your neck out for something. It was scary; you faced criticism; things didn’t work right. Now imagine sticking your neck out three times as far. Now imagine doing that day after day. And now imagine doing that for years. There are a ton of people doing that the Valley. It’s impressive, even heroic. When they say that Silicon Valley is not a place but a state of mind, it’s true. Talented people are everywhere in the world. But right mindsets are precious.
Second, the headlines are a head fake. When you read the major media covering the Valley, you find mostly stories about big companies: Apple, Google, Facebook, Twitter, Uber, Tesla, etc. These are exciting, dramatic stories of titans doing battle. But the stories aren’t what really make the Valley the Valley.
The real Valley happens under the radar, when no one is watching, when no one cares. It happened when Larry and Sergei first met at Stanford. It’s the day Zuckerberg moved here from Boston. It’s the moment Jobs and Wozniak finished their first circuit board. The New York Times missed those headlines. But the lunchtime serendipity, the coffee shop napkin sketches, the flashes of insight, the first prototype tested – that’s where the breakthroughs are made, where imaginary barriers are smashed. Those are the sparks that years later can improve countless lives, provide valuable goods and services, and even topple dictators. The real Valley is made of all the little stuff that never makes the news, but someday changes the world in huge ways. Don’t be fooled by the easy headlines. Look for the unwritten headlines.
Third, the new economic paradigm is already here. But it’s mostly a secret. What do I mean? Today, more and more wealth is derived from values that are manifested as certain behaviors. Open-mindedness, high trust, diversity, team-building, information-sharing, willingness to take risks, experimentation, rapid iteration. Those are soft and fuzzy. But innovation thrives in those environments. Take a walk down University Avenue in Palo Alto; look in the cafes at the entrepreneurs working. You can actually “see” those values buzzing everywhere.
Why is this recipe still a secret? Because we’ve been taught for decades – by the “experts” – that economic activity is value neutral, that reason should overcome emotion. But Silicon Valley has flipped the model upside down. The Valley is living proof that values – practiced by living, breathing, emotional human beings – are core to innovation, and thus critical to modern wealth creation. That’s a huge shift in the economy. Most people have a hard time believing it.
The Next Chapter
As we turn the page, we’re spinning out our consulting practice from T2. The new firm, Rainforest Strategies, is being led by three brilliant practitioners that have been doing the work on our team for years. If you are seeking to drive innovation in a company, community, country, or organization, these guys are the best in the business. They are using the science of innovation ecosystems and creating universal tools for enabling systemic change. It’s complex stuff, made simple. It really works.
We’re also shutting down our newsletter, the Rainforest Revolution. We’ve been running this service for three years, reaching about 20,000 people every week or two. I am proud that the newsletter was a pioneer. When we started, the idea that entrepreneurial ecosystems could be intentionally and scientifically “designed” was considered odd, even laughed at. Today that idea is everywhere. I hope we played a small role in that. Viva la Revolution.
So farewell, Silicon Valley. I loved you most of the time. I couldn’t stand you more times than I can count. But you’re the Florence of the innovation economy. And it’s been a privilege and honor.
Life moves on, but certain truths will always remain. Innovators and entrepreneurs already know them intuitively. Handshakes are more durable than contracts. Altruism is more efficient than selfishness. And silly things like trust and dreams and love… they really do power the world.
Time to turn the page, but stay in touch…
Victor W. Hwang
CEO, T2 Venture Creation
THE BIG PICTURE
Economic prosperity was an evolutionary phenomenon. The more people trade and the more they divide labour, the more they are working for each other. The more they work for each other, the higher their living standards. The consequence of the division of labour is an immense web of cooperation among strangers. Read more…
Small companies can now compete with larger players, and even disrupt them with the ferocity not imagined just a few decades ago. The real question of today is how small and large companies can work together to ensure global economic growth through innovation. Read more…
A recent study finds substantial evidence that performing arts organizations can help cities attract talent, spur innovation, and grow their economies. These organizations can be the proxy for the broader creative and cultural climate of a city. Read more…
Five priorities to serve as entrepreneurial groundwork: innovation, profitability, cash flow, culture and improvement. Read more…
THE LATEST NEWS
The Nordic countries, particularly Sweden, have the highest percentage of unicorns per capita in the world, and have developed more successful brand-name billion-dollar startups. Read more…
China’s old attitude has been swept aside by a surge in prosperity. There is a new level of confidence and boldness in the country’s young urban techies. Read more…
Global capital is streaming into Israel, despite the regional instability. The Israeli venture ecosystem has more than doubled in two years. Read more…
THE BIG PICTURE
The Huffington Post
A new economic paradigm — the Collaborative Commons — is rising and is already profoundly impacting economic life. In a world in which more things are potentially nearly free and shareable, social capital is going to play a far more significant role than financial capital, and economic life is increasingly going to take place on a Collaborative Commons. Read more here…
Harvard Business Review
Creativity and innovation require different individual skills and team structures and processes. The idea generation stage is often referred to as divergent thinking or exploration. The implementation stage is often referred to as convergent thinking or exploitation. Read more here…
Great benefits and fun working environment with a dedicated goal to make customers happy all fit in with Zappos’ company culture. Warby Parker has a dedicated team tasked with coming up with fun events and programs to promote community and communication. Read more here…
THE LATEST NEWS
McKinsey Global Institute
Saudi Arabia is the 19TH largest economy in the world. It can transform itself from an oil dependent economy through increasing its labor productivity, providing a stronger business environment and support sustainable fiscal management. Read more here…
Buzz is building around Taghazout in start-up circles, and it is becoming an international hotspot. After hosting the 2014 Global Entrepreneurship Summit, the government increased its support for entrepreneurs. Read more here…
Some $10 billion will be invested this year in Europe’s tech startups, up from $7 billion last year. Europe’s tech talent pool is as deep and broad as it has ever been, with 1.6 million professional developers at work (nearly equal to the number in the U.S.). There have been more than 100 European tech IPOs in last 5 years, more than those in the U.S. Read more here…
THE BIG PICTURE
World Economic Forum
Talent, not capital, will be the key factor linking innovation, competitiveness and growth in the 21st century. To unlock human capital, governments, business leaders, educational institutions and individuals must each understand better the global talent value chain. Read more here.
An ecosystem is a nonlinear complex adaptive system, and is therefore not the sum of its parts. It constantly adapts to changes in the environment – often in unexpected ways. Within the system there are dynamic networks of interconnections, and creation, destruction, survival and evolution. Read more here.
The Washington Post
A growing number of Hollywood actors and musicians who have turned their attention up north in recent years, pouring their personal wealth into some of Silicon Valley’s hottest startups. Read more here.
The Globe and Mail
In Simon Sinek’s book, Start with Why, he pushes readers to discover their purpose, cause, or belief that inspires them to do what they do. To better understand the connection between passion, innovation, and a clear “why” is to help you to gain clarity on why your company exists. Read more here.
THE LATEST NEWS
Adobe puts the creative process in a box, packed with exercises, suggestions, and a checklist of six steps. Each box contains a set of actions that employees complete to reach the next level. This makes the concept of innovation a lot less abstract. Read more here.
The rise in entrepreneurship in Rwanda was planned. By 2009, entrepreneurship classes were mandatory in secondary school. The government also runs workshops, radio programs and contests aimed at promoting entrepreneurialism. Strong entrepreneurship is equated with patriotism and nation-building. Read more here.
Georgia is beating out previous frontrunners like California and Texas. Georgia is now No. 1 in clean-energy employment growth. Conservatives and left-leaning environmental groups pushed the state legislatures to support third-party solar-panel leasing. Read more here.
The Wall Street Journal
Japan raised the pressure on companies to hire more women and promote them to management, a key part of Prime Minister Shinzo Abe ’s efforts to revive an economy hobbled by a shrinking population. Read more here.
THE BIG PICTURE
A large part of our evolved behavior involves our desire to signal important traits and qualities to potential mates, allies and rivals. Our evolved minds are sometimes out-of-sync with our modern environments. An evolutionary lens provides a guide as to what people are looking for in a product. Read more here.
What an organization is a bunch of people trying to do something together. The goal of a business is to get the members of the organization to put the good of the organization ahead of their own personal good. Read more here.
This View of Life
We’re less religious than ever, lonelier than ever, and the loneliness is making us unhappy and unwell. Solution? Building secular community to provide opportunities for people to establish high-quality social relationships that are intergenerational and diverse.Read more here.
The word “personbyte” describes the amount of knowledge that one person can reasonably know. The way to escape the constraint of the personbyte is to work in larger teams. More complex products require elaborate networks of teamwork and collaboration. Read more here.
By Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes
The recent winner of TechCrunch Disrupt’s Startup Battlefield provides tips on how to win startup pitch contests, and tips for judging contests too. Read more here.
THE LATEST NEWS
By Douglas Erwin, a friend and collaborator of T2 Venture Creation, from Kauffman Thoughtbook
EDAWN (Economic Development Agency of Western Nevada)created an entrepreneurial development strategy that leveraged the concepts from Brad Feld’s Startup Communities and Victor Hwang’s The Rainforest: The Secret to Building the Next Silicon Valley. Read more here.
New data from LinkedIn shows certain professionals are moving away from countries like India and flowing into places like the United Arab Emirates. Tech and telecom play a prominent role among the most active migration countries. Read more here.
The E.U. is taking legal and regulatory action that would boost local upstarts and rein in U.S. tech giants. The European Commission has proposed a plan to update and unify commercial regulations across Europe. Read more here.
THE BIG PICTURE
Cooperation, and group-level functional organization that produces cooperation, cannot be explained by selection within groups. It evolves primarily as a result of selection between groups. Read more here.
Stanford Social Innovation Review
Social sector leaders can encourage innovation by fostering three productive mindsets. Read more here.
Massachusetts Institute of Technology News
New book argues that economic development is a special case of the growth of information. Read more here.
At its best Silicon Valley is an expression of iconoclastic freedom and creativity. It would be a terrible shame if it became an unpopular and remote manifestation of elitism. Read more here.
A newly released 2015 Global Startup Ecosystem Ranking is here. Ecosystems have become more interconnected and startup teams have become more international. Read more here.
THE LATEST NEWS
Nikkei Asian Review
The establishment of a Free Trade Zone in Penang in the early 1970s has provided attractive incentives to foreign investors. Read more here.
Though a unique combination of circumstances, culture, and a strong will to succeed, Israel becomes this hub for innovation and entrepreneurship. Read more here.
The Wall Street Journal
Denver has long been a regional hub, with established industries such as oil and telecommunications that leaders have built upon to create thriving sectors such as energy information technology and digital health care. Read more here.