Silicon Valley 2017 Blog Series
By: Stephane Levesque
A business trip to San Francisco simply wouldn’t be complete without visiting Silicon Valley, the epicenter where big tech companies like Apple, Microsoft, Google,IBM and just about everything else in between, have come together to innovate, share their knowledge and network with like-minded people.
On May 17 the University of Ottawa’s Telfer Executive MBA candidates did just that – It was a beautiful sunny spring morning when we traded the heavy traffic of San Francisco for a scenic countryside drive before descending into the Valley. The green and golden hills of Palo Alto quickly gave way to a wide expanse of low-rise buildings of brick, mortar and glass that almost blended into the scenery and landscape. Our first stop, Stanford University, home of the world-leading institution in teaching, science and research.
Telfer Executive MBA alumni and now Director of Social Work and Case Management at Stanford Health, Karen Nelson welcomed the group to the Stanford University facilities and introduced our first speaker, Kenneth Epstein, Principal at NewCap Partners in San Francisco. Kenneth described Silicon Valley as an environment of open innovation. He provided the class with valuable insights of translating technology into business value for potential investors. Silicon Valley is where hopeful companies come to network, get new ideas and seek much needed funding, all of which happens at an accelerated rate in this environment. “In fact, if you look at the top profit companies coming out of Silicon Valley today, you’ll probably be surprised to learn that they didn’t even exist 10 years ago.”
Kenneth also linked innovation and the constant technology growth in the Valley directly to Stanford University, stating that “…many of the people who were successful in the 1970’s are now professors at Stanford today, and many of them are Angel investors.”
He offered his perspective as to why the Valley was, is and will remain so effective in fostering a culture which continuously produces new and innovative ideas. Success in the Valley is due in great part to the immense synergies and networking potential it offers to investors, innovators and enablers who come together to build wealth and success. “You are never more than two phone calls away from a solution, or from help and advice, and the timely connection to a potential investor, and that’s what makes [the Valley] work so well.”
Our second speaker at Stanford was Ronald Weisman, Chairman at Software Industry Group Band of Angels. The stakes are high in the world of Silicon Valley for an Angel investor, “Only about 1% of the people who talk to me, talk about things that I care about, the rest talk about things I don’t care about. In my career, I’ve heard very few pitches that appeal to me.” Says Wiesman. He also talked in-depth about what potential investors look for when approached with a great idea. “Understanding your (company’s) risks and the benefits you can accrue to our funds is all that we care about.” While this may be obvious, Ron explained that most people who seek support from investors provide detailed information on their company’s products and solutions with very little to no attention to the financial details and projections that he requires in order to make sound investment decisions.
There is no such thing as free money. Ron and his organization follow a strict set of criteria before even considering an investment. Criteria includes questions like:
- Does this investment opportunity fit our fund profile? I.e. is this an appropriate technology that we would consider investing in? Is this aligned to other like-sectors we’ve invested in the past?
- What is the investment styles? I.e. is the VC attempting to tell a story or sell a new vision? Or, is this a thesis-based investment, for example, autonomous cars will be the next big thing.
- Where are they in the life of the fund? I.e. do they require seed funding, or are they farther along in the development of their technology?
- Does the deal interest the VC team? i.e., do I like this sector? Do I like this team? Will my partners support this deal?
- Are the risks manageable? i.e. does the technology work and is it scalable? Will customers want it?
As part of his ongoing commitment to supporting the continued growth of innovation in the Valley, Ron happily meets and mentors young tech savvy enthusiasts explaining the importance of developing a sound strategic funding case that appeal to Angel investors.
The concept of open sharing and helping others to meet their goals and dreams is the cornerstone of the Silicon Valley culture. In the afternoon, Telfer Executive MBA candidates visited Google and we explore the main campuses. We quickly saw Google employees enjoying what we would consider unusual benefits including;
- A highly flexible work settings where many employees could be seen working and meeting outside and using collaborative spaces.
- Several culinary food trucks strategically parked around the campus offering bistro salads, sandwiches and snacks at no-cost to employees.
- Brightly coloured Google bicycles are available to anyone who needed to ride around the campus, all you need to do is jump on one and go!
- Google coach line buses that provide transportation exclusively to Google employees, to and from headquarters - again at no cost.
While this may seem like a unique and envious proposition to us, it’s considered standard fare for those who work in the Valley. It is about taking care of your most important asset, your employees. Many companies in Silicon Valley, like Google have built a bottom up culture as opposed to a top down philosophy more commonly seen in other companies and public sector environments. This culture provides a very open work setting where learning and improvement thrives. Employees are encouraged to innovate and build new products with an understanding that many of their projects will fail and this is ok. What is important for the organization is the learning gained from each experience and the deep understanding of the value it brings to the entire Silicon Valley eco-system.