silicon valley 2010- changes in the circles of influence from prof tom kosnik

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.


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!!!


1970 1980 1990 2000 2005 2010

Who is Tom Kosnik?

AMERICAN MANAGEMENT SYSTEMS


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


What is Silicon Valley? An entrepreneurial state of mind.


What is Silicon Valley?Miles of roads and too much traffic


What is Silicon Valley?

The highest concentration of

entrepreneurial high-tech companies

in the world.


Stanford University is at Ground Zero in the Silicon Valley Cluster


And So is NUS College of Silicon Valley!


What are the Circles of Influence? A model to help entrepreneurs get stakes for their ventures.

Players

Code

Stakes

The Sweet Spot!

Entrepreneurial Cluster


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?


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


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


The stakes include…

MoneyTime

Talent

Technology

And much more…

Customer Relationships Passion


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.


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!


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


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


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


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


Ron Conway talks about the odds of getting funded


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


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!


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!


Mike Maples Jr. Talks about Learning from Failure


Thank You

Tom Kosnik650 450 3330

Facebook: Tom Kosnikskype: thomas.j.kosnik

[email protected]

Lena [email protected]

0733 756 012Linkedin: Lena Ramfelt

Skype: lenaramfelt


Appendix

Myths and Paradoxes in Silicon Valley

Not for presentation.

Possible use in Q and A


Venture Capital Investment Trends in the U.S.

Source: https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical


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.


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.


Academic Aristocracies Sing Praise to Meritocracy: 2008


Scarcity in the Land of PlentyThe Money Talent Merry-Go-Round


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.


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?


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

silicon valley 2010- changes in the circles of influence from prof tom kosnik

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