“Just as energy is the basis of life itself and ideas the source of innovation, so is innovation the vital spark of all human change, improvement and progress”—Theodore Levitt
I have lived in the Seattle area for many years, and I spend a fair amount of time interacting with senior executives and fellow venture capitalists in San Francisco and Silicon Valley. I’ve studied what makes the Bay Area region one of the leading technological and commercial centers in the world. It has the entrepreneurial spirit and vast networks of capital and human resources that makes new company formation doable. We in the Northwest look at how Silicon Valley has managed to establish an entrepreneur-friendly ecosystem and how, compared with other regions, it appears to more easily translate discoveries from research laboratories into valuable commercial products. Thinking about how to create this environment reminds me of the quote from Theodore Levitt (a former Harvard Business School Professor), who emphasized that innovation is the key catalyst to promote sustainable change, improvement and progress.
If we want to achieve this goal, we need to foster an enduring ecosystem for innovation so that it can resist the unpredictable ups and downs of the marketplace.
Focusing on true innovation should not come as a surprise to those in Silicon Valley or San Francisco. What we think of today as Silicon Valley emerged largely through early innovations that came from developing and manufacturing advanced electronic components, microwave technology, and semiconductors. Major innovations in life sciences—like the discovery of genetic engineering techniques—resulted in the creation of an entirely new biotechnology industry (led in the Bay Area by Genentech) that revolutionized the way in which novel medicines for human diseases would be discovered and developed.
Following in the footsteps of this tradition, Bay-Area entrepreneurs and VCs should consider doing the following three things to foster a more stable and sustainable environment for innovation:
• Invest in True Innovations, Not ‘Me-too’ Products: Talented entrepreneurs need to invest their time and energy in identifying the most revolutionary technologies and building companies that will find the most capital-efficient way to commercialize these technologies to solve our most vexing problems in the IT, life science, and energy sectors. This means steering clear of “me-too” type technologies and focusing on those true technical discoveries that can make more than just incremental improvements. This also implies that entrepreneurs need to … Next Page »