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Presentation Slides for Prof Tom Kosnik's talk as part of the InCub3 seminar series
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Silicon Valley 2010:Changes in Circles of Influence #1
Silicon Valley 2000-2010:Changes in the Circles of Influence
Prepared Tom Kosnik and Lena Ramfelt,
Coauthors of
Circles of Influence (in revision)
Presented at NUS on March 25, 2010
If you circulate any part of this presentation please give credit to the authors.
Silicon Valley 2010:Changes in Circles of Influence #2
Thanks to NOC Alumni, NUS Enterprise, and NEC team for making this presentation possible!
• Prof. Lilly Chan
• Prof. Teo Chee Leong
• Prof. Wong Poh Kam
• Wong Hong Ting
• Hoey Lit Loo
• Audrey Tan
• Min Xuan Lee
• Lao Zi Jun Lawrence
• Shannen Soo
• Jolia Tan
• Daphne Gong
• And more!!!
Silicon Valley 2010:Changes in Circles of Influence #3
1970 1980 1990 2000 2005 2010
Who is Tom Kosnik?
AMERICAN MANAGEMENT SYSTEMS
Silicon Valley 2010:Changes in Circles of Influence #4
Agenda• What is Silicon Valley?• Stanford and NUS are at Ground Zero• Circles of Influence: Players, Stakes and Code• The Players in 2000… and 2010• Web 2.0 & Mobile Milestones in the Valley• Clean Tech Categories on the Rise in the Valley• Venture Capital Trends in the Valley• Reasons for the Venture Capital Crunch• The Rise of Incubators and Accelerators• How Entrepreneurs are Coping with Changes• Examples of Trustworthy “Young Guns” in VC
Silicon Valley 2010:Changes in Circles of Influence #5
What is Silicon Valley? An entrepreneurial state of mind.
Silicon Valley 2010:Changes in Circles of Influence #6
What is Silicon Valley?Miles of roads and too much traffic
Silicon Valley 2010:Changes in Circles of Influence #7
What is Silicon Valley?
The highest concentration of
entrepreneurial high-tech companies
in the world.
Silicon Valley 2010:Changes in Circles of Influence #8
Stanford University is at Ground Zero in the Silicon Valley Cluster
Silicon Valley 2010:Changes in Circles of Influence #9
And So is NUS College of Silicon Valley!
Silicon Valley 2010:Changes in Circles of Influence #10
What are the Circles of Influence? A model to help entrepreneurs get stakes for their ventures.
Players
Code
Stakes
The Sweet Spot!
Entrepreneurial Cluster
Silicon Valley 2010:Changes in Circles of Influence #11
Players bet their stakes on entrepreneurial ventures.
• Venture capital firms (and their Limited Partners)
• Angel Investors
• Research Universities (Stanford and Cal)
• Silicon Valley Law firms
• Public Accounting firms
• Investment banking firms
• Consulting firms
• Marketing, advertising, and PR firms
• Executive search firms
• Stock exchanges (NASDAQ, NYSE, etc.)
• TiE, Monte Jade, AAMA, Silicon Vikings, etc.
• Industry Associations (Semicon, SVASE)
• Accelerators/Incubators (Astia, Clean Tech Open, Plug-and-Play, Y-Combinator)
• BASES, ASES, NUSEA, Energy Crossroads, SWIB
• Business and Technical News Media, Blogs, etc.
• Joint Venture Silicon Valley; Clean Tech Open, etc.
• Social media for entrepreneurs (Facebook, Linkedin)
• Government agencies
These are major players in Silicon Valley.
How are they similar to or different from the major players in Singapore?
Silicon Valley 2010:Changes in Circles of Influence #12
The Players in Silicon Valley in 2000…
Silicon Valley VCs
Angel Investors
Regional BusinessNews Media
Large High TechCompanies with
Silicon Valley HQ(Lead Customers And Suppliers)
Local GovernmentInstitutions
Leading SiliconValley Law Firms
Fortune 500 Firmsnot in Silicon Valley
(Customers)
Executive SearchFirms
State GovernmentInstitutions
Investment Banks
NASDAQ
National BusinessNews Media
Stanford & Berkeley
Big 4 CPA Firms
U.S. Government
Global ConsultingFirms
Most Non-USCorporations
Local Influence
Of PlayersInside
SiliconValley
Global Influence of Players Outside Silicon Valley
Low
Low
High
HighMedium
Medium
Silicon Valley 2010:Changes in Circles of Influence #13
The Players in Silicon Valley in 2010…
SV “local” VCs/ and Angels
Regional BusinessNews Media
Large High TechCompanies with
Silicon Valley HQ(Lead Customers And Suppliers)
Local GovernmentInstitutions
SV’s “global” VCs
Leading SiliconValley Law Firms
Blogs & Social media(Facebook, Linkedin)
Fortune 500 Firmsnot in Silicon Valley
(Customers)
Accelerators& Incubators
Executive SearchFirms
State GovernmentInstitutions
U.S. Government
National BusinessNews Media
Stanford & Berkeley
Big 4 CPA Firms
Most Non-USCorporations
Global ConsultingFirms
NASDAQ
Investment Banks
Local Influence
Of PlayersInside
SiliconValley
Global Influence of Players Outside Silicon Valley
Low
Low
High
HighMedium
Medium
Silicon Valley 2010:Changes in Circles of Influence #14
The stakes include…
MoneyTime
Talent
Technology
And much more…
Customer Relationships Passion
Silicon Valley 2010:Changes in Circles of Influence #15
To get players to bet their stakes on your venture -you’ve got to know the code…
What is the code?
• “Local” rules of the game
• Usually implicit
• Communicated in private
• Rooted in local entrepreneurial cultures
• Changing across industries in the same location.
Knowing the code accelerates your ability to build trust.
Silicon Valley 2010:Changes in Circles of Influence #16
Different Industries are like Mountains in Silicon Valley
Defense/Aero
Clean Tech
Computers&
CommunicationsSoftware,Software
as a service,Web 2.0, etc.
Semi Mfg./ Semi-
Conductors s
Life Sciences:Biotech,
Medical Equip.Pharmaceuticals.
Personalized MedicineMedical Informatics. Etc.
Different guides know the code for each mountain!
Silicon Valley 2010:Changes in Circles of Influence #17
Web 2.0 & Mobile Milestones in Silicon Valley
2000
2002
2003
2004
2005
2006
2010
2009
2008
SequoiaCapitalDoom & Gloom
2001
NUS College inSilicon Valley
2007
Silicon Valley 2010:Changes in Circles of Influence #18
CleanTech Categories on the Rise in Silicon Valley
1. Air, Water, and Waste2. Energy Efficiency3. Green Building4. Renewable Energy
• Solar• Wind• Waves• Thermal• Biofuels
5. Smart Power, Smart Grid, Energy Storage6. Transportation
Categories Adapted from:
Source: http://www.cleantechopen.com/app.cgi/content/competition/category_description
Silicon Valley 2010:Changes in Circles of Influence #19
Venture Capital Investment Trends in Silicon Valley
The bottom line: There is Scarcity in the Land of Plenty!
Source: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical
Silicon Valley 2010:Changes in Circles of Influence #20
Reasons for The Venture Capital Crunch
Venture Capital Funds
Shrinking Value of other investments reduces the amount LPs are allowed for VC funds
Poor performance of most VC funds in last 10 years makes VC less attractive
Disruption of investment banks make fewer trusted players to help with IPOs and M&A
Public distrust requires VCs to hold startups longer to reach profitability before exit
Silicon Valley 2010:Changes in Circles of Influence #21
Ron Conway talks about the odds of getting funded
Silicon Valley 2010:Changes in Circles of Influence #22
The rise of Incubators and Acceleratorsto help early stage entrepreneurs
2000
2002
2003
2004
2005
2006
2010
2009
2008
2001
NUS College inSilicon Valley
2007
1999
Emerging Leaders Forum
Silicon Valley 2010:Changes in Circles of Influence #23
How Entrepreneurs are Coping with the Changes in Silicon Valley
• “Getting outside the building” to develop paying customers while developing products!!!
• Relying on parents to bootstrap their ventures
• Sharing info on VCs on TheFunded.com
• Avoiding “old school VCs” – working with “young guns”
• Joining Incubators and/or Accelerators
• Entering multiple business plan competitions
• Offshoring development from the outset.
Some of these are opportunities for NUS Enterprise & NOC Alumni!
Silicon Valley 2010:Changes in Circles of Influence #24
Examples of Trustworthy “Young Guns” in VC
Web 2.0 and Mobile Media• Katherine Barr, MDV
• Ravi Belani, DFJ
• Chi-Hua Chien, KPCB
• David Hornik, August
• Mike Maples Jr., Maples
• Ann Miura Ko, Maples
• Sergio Monsalve, NVP
• Jonathan Teo, Benchmark
Clean Technologies• Raj Atluru, DFJ
• Andrew Chen, Lightspeed
• Ira Ehrenpreis, Technology Partners
• Warren Hogarth, Sequoia
• K.T. Moorgat, MDV
• Eric Straser, MDV
• Steve Vassallo, Foundation
• Trae Vassallo, KPCB
Note: I do not get a referral fee!
Silicon Valley 2010:Changes in Circles of Influence #25
Mike Maples Jr. Talks about Learning from Failure
Silicon Valley 2010:Changes in Circles of Influence #26
Thank You
Tom Kosnik650 450 3330
Facebook: Tom Kosnikskype: thomas.j.kosnik
Lena [email protected]
0733 756 012Linkedin: Lena Ramfelt
Skype: lenaramfelt
Silicon Valley 2010:Changes in Circles of Influence #27
Appendix
Myths and Paradoxes in Silicon Valley
Not for presentation.
Possible use in Q and A
Silicon Valley 2010:Changes in Circles of Influence #28
Venture Capital Investment Trends in the U.S.
Source: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical
Silicon Valley 2010:Changes in Circles of Influence #29
The 7 Paradoxes of Silicon Valley7 Paradoxes of Silicon Valley
Paradox 1: Mountains in the Valley.
Paradox 2: Academic aristocracies sing praise to meritocracy. Paradox 3: Scarcity in the land of plenty.
Paradox 4: Innovation masks tradition.
Paradox 5:It’s OK to fail if you shoulder the blame.
Paradox 6: Long on knowledge, short on wisdom
Myths about entrepreneurship in Silicon Valley
The Valley is an open network.
The Valley is a meritocracy.
Money, talent, and other resources are abundant.
It’s OK to fail!
Learning fuels success in Silicon Valley.
Everyone cooperates – even competitors.
Paradox 7: Competitors Collaborate and Collaborators Compete.
Silicon Valley is “ground zero” for innovation.
Silicon Valley 2010:Changes in Circles of Influence #30
Academic Aristocracies Sing Praise to Meritocracy: 2003
Figure 4.1B: VCs with MBAs from Leading Universities
Stanford40%
Pennsylvania4%
Santa Clara3%
UCLA2%
Columbia2%
Northw estern2%
All Others16%
Harvard31%
Stanford
Harvard
Pennsylvania
Santa Clara
UCLA
Columbia
Northwestern
All Others
Source: Sample of 164 VC professionals from 21 Silicon Valley f irms, June 2003.
Silicon Valley 2010:Changes in Circles of Influence #31
Academic Aristocracies Sing Praise to Meritocracy: 2008
Silicon Valley 2010:Changes in Circles of Influence #32
Scarcity in the Land of PlentyThe Money Talent Merry-Go-Round
Silicon Valley 2010:Changes in Circles of Influence #33
It’s OK to fail if you learn – and shoulder the blame
Myth 5:
It’s OK to fail
Paradox 5:It’s OK to fail if you learn -
And shoulder the blame.
How to cope with the paradox:
• If you blame investors they won’t forgive or forget. • Fail fast and adapt before burning through your funding.• When failing remember to show grace under fire.
Silicon Valley 2010:Changes in Circles of Influence #34
Do the Paradoxes of Silicon Valley Do the Paradoxes of Silicon Valley apply in your Entrepreneurial Cluster?apply in your Entrepreneurial Cluster?
The Paradoxes of Silicon Valley No ?? Yes
1. Mountains in the Valley
2. Academic aristocracies sing praise to meritocracy
3. Scarcity in the land of plenty
4. It’s OK to fail if you learn – and shoulder the blame
5. Innovation masks tradition
6. Long on knowledge, short on wisdom
7. Competitors collaborate, collaborators compete
Are there other paradoxes in your community?
Silicon Valley 2010:Changes in Circles of Influence #35
What segment best describes you tonight?
Raise your hand for the color that best fits you tonight:
– Blue = I have an opportunity, am looking for money and talent
– Red = I have talent, am looking for the right opportunity
– Green = I have money to invest (as a customer, angel, VC, etc.)
– Yellow = I have other resources entrepreneurs need to grow