2/5/16

BUSI W3702: Venturing to Change the World

Lecture 3
Questions about ecosystems:
How are they structured?
How can I position my venture? Do I pitch differently on the West Coast vs East?
Differences in ecosystems?
What factors lead to good ecosystems?
Evolution of ecosystems: how did they become that way and how do they change?
Internal vs external: do they interact with each other and exchange ideas/trade?
Fairness in ecosystems (social, personality-wise, etc.) bias in favor of certain people
Immigration/emigration: how often do people stay in ecosystems? Career after startup?
Can they be constructed (artificially/deliberately vs naturally)?
Ad-tech: identify who you are and what you like and what might attract you based on deep
learning and then spam you with advertisements
B2B: selling software from one business company to another
Financiers:
Accelerators: relatively new and theres no definite duties/responsibilities; not everyone
goes to accelerators and theyre not very prestigious (ie. you needed help)
Incubators: also not well understood (hey lets make a factory that starts startups not a
real business and not much credibility)
VC Funds: They have a few tens/hundreds/thousands of millions of dollars and have a
certain number of years to hold investments
Seed funds: Hundreds of millions, first stages of investment
Angels: Avoid! Inefficient process! A group of really rich people who get together
How do you choose your people in your ecosystem?
Serendipity (low volume, tries to understand few people you met in depth)
High volume/ low accountability/ rip through the room to meet people/ try to get a big
picture of the composition and landscape and what talents exist
Networkers- being nodes that connected people to other people (why didnt people make
more recommendations? Why didnt they help each other more? Nobody wanted to
sacrifice their limited time and possibly end up without a team, even though making
recommendations would have optimized the best-fit formation of teams)
Common strategy: first team up as a pair, and then divide and conquer to look for others.
First establish a tentative safety net group and then split to look for accessories.
People became more attached to their ideas as their product became more developed and
as more relationships were formed more strongly. There was more at stake, more to lose
as the game progressed so people became more risk-averse and closed-minded. At first
there was very little risk and little to lose.
Tradeoff: do you first look to find the one person with the right skill set (tunnel vision) or
do you first look to find someone with lots of connections (who can direct you to the
person with the right skill set)?

Co-location: Why do similar businesses all congregate into the same area? Why and how do
hubbubs form? Doesnt this mean more competition? Whats strategic?
Collaboration (syndication pulls together departments for a transaction)
Validation (a prestige forms in the area where the best go there)
Trail-blazing versus setting up somewhere where you know someone has already
succeeded so you know that it is possible to succeed there
People value face-time and trust and these activities matter when making large financial
decisions (digital co-location also presents digital hubs)
Complimentary services such as law firms also innovated and were integrated into the
startup ecosystem. Good for both law firms and easy for founders.
Social History of Silicon Valley and Entrepreneurship
Failure was embraced and founders were hailed as heroes.
Identity was around what one did (is it disruptive? is it life-changing?) and whether it was
cool not whom/company one worked for (I work for GS)
The Traitorous Eight: Gordon Moore, Sheldon Roberts, Eugene Kleiner, Robert Noyce,
Victor Grinich, Jean Hoerni, Jay Last, Julius Blank
What kind of network should you be cultivating as a student now to be a future entrepreneur?