Building Business in Silicon Valley
At the end of August, I had the opportunity to attend an elective in Silicon Valley, as part of my MBA. INSEAD has been a wonderful opportunity to step outside of my comfort zone and explore different career paths, and I signed up for the Building Business in Silicon Valley (BBSV) trek to do just that: explore the epicentre of tech startups, and what makes it so unique and successful.
At the start of the week, I had no idea what to expect. Silicon Valley has had its fair share of bad press recently: bloated IPOs, privacy violations, income inequality and homelessness. I have to admit I was not without skepticism. But thanks to an amazing array of speakers put together by our BBSV professors Gopi Rangan, Steve Haslett and Liana Burtsava, I now know that there is much more to Silicon Valley than what you read in the headlines.
I understand why so many talented and smart people are drawn to this place, and what makes it so uniquely equipped to fuel this spectacular growth. It was a privilege to be able to feel the pulse of this "ecosystem", and be part of the excitement, if only for one week.
Out of respect for our amazing speakers who were incredibly open and candid with us, I have intentionally avoided directly quoting, or attributing ideas to any particular individual; however, I have summarised my main takeaways below. For a complete list of speakers from the week please feel free to scroll to the end of my post or feel free to reach out if you'd like to discuss.
Pay it forward not pay us back
"Networking is who knows you, not who you know"
You don't have to go to Silicon Valley to hear people preach the importance of networking and relationship building; however, there is a particular evangelism that one hears about it coming from the valley.
When I hear networking, I often envision a kind of stereotypical transactional experience, where if you scratch my back I'll scratch yours.
This concept of networking is what makes me cringe when I hear people preaching about it. I can proudly say that this is not what I have experienced since starting my MBA at INSEAD, and it was especially not the case for the people we met during the BBSV Trek. The individuals we met were open, enthusiastic to share their experiences, and went out of their way to offer support and advice.
Why would CEOs, successful VC partners, and entrepreneurs be so generous to a bunch of INSEAD MBA students?
Three words: Pay it Forward. There is this idea that if the individual can do something to make the ecosystem stronger (provide mentorship, make connections, etc.), the individual will also benefit - directly or indirectly.
While I have met many people that subscribe to this belief, I have never been in an environment where it is practised on such a collective level, and with people of such prominence and influence.
If you've ever played on competitive team sports (I played soccer for many years growing up), you probably know the feeling of working together as a team to succeed. Both in my personal and professional life, I loved working together in collaborative teams to solve challenging problems. In SV, I had the feeling that the whole ecosystem is working towards this, and it was intoxicating.
Entrepreneurs don't need to feel like they are going at it alone, there are numerous peers, mentors, and advisers who are there to support you. The only expectation is that you will be willing to do the same when the time comes.
You can't risk it all, all the time
Before I came on this Trek, I imagined entrepreneurs have to be serial risk-takers. It was an absolute prerequisite that someone would be willing to risk it all time and time again until they found success. While I would categorise myself as a calculated risk-taker, I just could not imagine myself living with that kind of constant uncertainty. What I learned was that neither can the average entrepreneur!
In fact, it is perfectly normal for people to move from periods of uncertainty after starting a business or working in a failed startup, to stable and certain employment in a larger company.
They aren't giving up their entrepreneurial aspirations, they are just aware that they need periods of stability that will support them both financially and psychologically when they move to riskier endeavours. What I saw as unique in SV, was that from a recruitment perspective, this movement back and forth wasn't seen as a disadvantage. Large companies don't expect employees to stay with them for their entire career, and they value the skills these entrepreneurial people bring to their organisations, even if they know they are eventually going to leave.
"You can choose courage, and you can choose comfort, but you cannot choose both." - Brené Brown
I don't want to pass any judgement as to whether this is good or bad for large corporations, or should be a universally adopted recruiting perspective. I think there are particular labour dynamics in SV that contribute to this, but from my experience, employers' expectations elsewhere are different. They value employees who show a long term commitment to a defined career path. And I wonder if having access to stable career opportunities in between entrepreneurial stints is helping to foster this community's willingness to take risk, which is, in turn, feeding this cycle of entrepreneurship.
Experience is important, but it's not everything
What surprised me when talking to investors in Silicon Valley, was just how much they valued someone with an outsiders perspective.
Transferable skills are valued more highly than in depth experience.
I was even surprised to hear that some investors might even consider it a disadvantage for a founder to be an expert in their field. This is because of the emphasis on radical innovation over incremental innovation. Experience teaches us where obstacles lie, and how to optimise within a given set of limitations, but radical innovation requires thinking beyond the status quo. This means that it often takes someone who doesn't know what barriers lie ahead to create radical change.
Because radical innovation offers such tremendous returns, investors are betting on outliers. They don't need every idea to succeed. They just need to invest in enough radical ideas, and have a few achieve spectacular success to make the investments worthwhile. And because failure is expected, celebrated even, the entrepreneur is not laughed out of the game after one failed attempt.
They are encouraged to learn from their mistakes, look for new opportunities (where they may or may not have experience), and try again. It is this process of iteration and acceptance of outside perspectives that allow this place to be such a centre of innovation.
There really is something special about this place. It's hard to put a finger on it; to distill it to a few simple points. I've done my best to summarise my experience, but at the risk of being cliché, you really do need to experience it to understand it.
Thanks again to INSEAD for building a platform to give students this experience, and to the amazing network in the Bay Area that came out to speak to us, network with us, and share their experiences.