It is time to think beyond the parochial mindset of Silicon Valley and embrace a whole world of innovation, writes John Kennedy.
The tech successes of the 21st century will come from all corners of the Earth and from all kinds of people, not just the parish of Silicon Valley.
In 1998, two young men ran around the campus of Stanford University maxing out their credit cards to buy server space to just prove that their algorithm for organising the world’s information worked. Two decades on and their company Google is the biggest employer in Dublin alone with about 7,000 people and growing, and it owns the tallest building in the city.
‘You really need to look outside of your immediate network and think bigger. If your culture does not support diversity, your company will die’
– CLAIRE LEE
But that was Google and that has been done. And that was Silicon Valley in its heyday. A lot has changed and a lot is changing.
In the coming days, Xiaomi, a China-based smartphone maker that could soon rival the Apple iPhone, will raise between $6bn and $10bn in an IPO on the stock exchange in Hong Kong. It was started up in 2010 by serial entrepreneur Lei Jun and it released its first Android-based smartphone, the Mi 1, in 2011. Asia’s increasing proficiency in technology areas such as 5G already has the Trump administration nervously contemplating rules to put in export controls as well as block firms with Chinese ownership from buying US companies.
This is madness because a change is coming.
Who’s to say that the next multibillion-dollar tech giant that will become a household name won’t come from Silicon Valley, but instead from somewhere we won’t expect?
It could be a dream in the heart of a young Syrian girl currently stuck in a refugee camp in Turkey. It could be a sudden inspiration for a business in the mind of a mother from Rochester, New York, or it could be a young college graduate in Nairobi, Kenya, working on the next wonder material or source of energy.
I related this reflection to my panel at Inspirefest 2018 on Friday consisting of Astia board member Yuka Nagashima; Nest.vc’s New Zealand-based chief growth officer, Niamh Given; the managing director of the Oman Technology Fund, Maha Al Balushi; and Enterprise Ireland’s Hong Kong-based fintech lead, Mo Harvey.
They all agreed that Asia is one of the places to watch when it comes to the next epoch in tech, especially 5G, and that social mobility is a decisive factor in enabling people to reach and achieve their full potential.
The ideas economy
As usual, Inspirefest 2018 delivered lots of inspiration and opened everyone’s mind up to the world of possibilities.
But it was often the quiet conversations with people such as Nagashima, or the authentic and burning ambition in the hearts of individuals such as Arlan Hamilton, that made me realise people are dreaming of a world beyond what we now think of as Silicon Valley.
Don’t get me wrong, there is nowhere on Earth like Silicon Valley and it will always be unparalleled in terms of the sheer concentration of wealth and investment. It is a mindset as well as a place.
But what is also becoming quite clear is that Silicon Valley is small and parochial with a few investors – mostly white men – who are only likely to invest in other white men who may look like their younger selves. As a result, the Valley risks becoming stagnant and less innovative.
All of that needs to change, but it is not changing fast enough.
However, it is only when you spend a moment of time in Hamilton’s company do you realise that change is coming and it is a change that is more tangible than we could wish for.
It is about social mobility
Almost four years ago, Arlan Hamilton was homeless and couch-surfing with friends. Today, her venture capital company Backstage Capital has closed more than 100 investments in start-ups led by women from minorities and she is currently spearheading a $36m fund that aims to invest up to $1m a pop in start-ups led by women of colour.
Hamilton, a young, black, lesbian woman, is the antithesis of your stereotypical Silicon Valley investor. And that’s where we need to start changing, too. Forget the stereotypes. Nothing should be fixed in our minds when it comes to investing in the future, except figuring out if the idea is sound and if the person or people driving it have the passion to see it through.
At Inspirefest 2018, Hamilton brought her entire crew from Backstage Capital and, amid the intelligence and brilliance of all the guests and speakers, their passion and motivation shone as a beacon for all.
On stage, one of her colleagues, Lolita Taub, became in my mind an emblem for the changes that are coming. And those changes centre on those we underestimate and overlook.
“My life started in a garage. I grew up in a poor area in LA, in Compton, and I came from very little,” Taub explained. “I learnt English through Sesame Street and grew up in one of the poorest areas where the statistics were against me. The statistics were that I was unlikely to finish high school and would drop out and I would have two kids by the age of 15.
“That’s what I came up against. But my parents instilled a work ethic and belief that I can be more.
“I have an opportunity to bring others up and it’s an honour as well as a responsibility. I can expand circles and move forward in a sustainable way. Let’s put our money where our mouths are.”
Hamilton’s colleague, Christie Pitts, related how she met Hamilton when she was on her 12th investment. “Our plan was to make 100 investments in underestimated founders by 2020. We are a year-and-a-half ahead of schedule. We are only scratching the surface.”
Hamilton herself said that it is a misconception to think that Backstage Capital only invests in US companies. Her colleague, Brittany Davis, told the crowd that the company plans to make 10pc of its investments in companies from outside the US. Currently, deal flow stands at 2pc to 3pc outside the US, mostly in Africa and the Caribbean.
“I hope that Backstage has something to do with people feeling welcome,” Hamilton told the crowd, again the antithesis of your stereotypical Silicon Valley investor that would make you work for their time.
This is not a pipeline problem
“Stereotypes are stupid,” said Claire Lee, an Irishwoman who happens to be head of early-stage banking at the prestigious Silicon Valley Bank.
“Can’t find candidates? Rubbish,” Lee railed at Silicon Valley’s blind side. “There are lots of qualified people and founders who should be funded; it is not a pipeline problem.
“If we are going to have a sustainable global economy, we need a sustainable, inclusive workforce.
“It is important that the money and spending power gets into the hands of people who may not have the access today.”
Lee laid down a challenge for Silicon Valley’s investor elite: “You really need to look outside of your immediate network and think bigger. If your culture does not support diversity, your company will die.”
The previous evening, at an invite-only Investor Evening at Inspirefest that I chaired, Lee revealed how even she had to overcome her own biases on an occasion where she met some middle-aged women from Ireland who had left their lives behind to forge a new tech start-up. She had to ask herself who the hell she thought she was for thinking they could not make it in a scene dominated by the ‘bro’ culture of white Stanford graduates.
“You know what, they succeeded and they got funded,” Lee told the crowd.
Hamilton, who was also on the panel, made it clear that she has no intention of stopping at $36m and in fact would like to see a number of $100m funds eventually be created.
I have the feeling that Hamilton’s example will see such funds also be emulated by others who are underestimated in the Valley. Think of a plethora of similar funds of funds that complement what Backstage Capital is doing.
Later that night, I bumped into another Inspirefest speaker, Chinese-Canadian Eden Full Goh, the New York-based inventor of SunSaluter, a low-cost mechanism that optimises solar panels while providing clean water for rural, off-grid communities in 19 countries.
Named one of the Forbes 30 Under 30 in Energy and Industry three years in a row, not to mention one of the US Chamber of Commerce’s IP Champions and Ashoka’s Youth Social Entrepreneur of the Year, Eden was also a member of the Thiel Fellowship’s inaugural class.
If anything, Eden shows that young brilliant minds don’t have to be in Silicon Valley to change the world.
The aforementioned individuals are voices that herald imminent change and show that people are impatient with a parochial Silicon Valley mindset that only looks inward.
Investors need to embrace diversity. Look to people who don’t sound like you or look like you; cast your mind to places you have never been, cultures you have never experienced. Listen to those you disagree with. So what if someone is younger than you, or perhaps way older than you.
Our strengths lie in our differences and a variety of perspectives and ideas. But, in one respect, all people are the same: they just want to succeed.
Inspirefest is Silicon Republic’s international event celebrating the point where science, technology and the arts collide. Tickets for Inspirefest 2019 are available now.
Updated, 15.06pm, 25 June 2018: This article was amended to clarify that 2pc to 3pc of Backstage Capital’s deal flow is currently outside the US rather than 10pc as originally stated.