1. A new book by Victor W. Hwang and Greg Horowitt
www.therainforestbook.com
www.innosummit.com
Greg Horowitt, Managing Director, T2 Venture Capital
Co-Founder, UCSD Global CONNECT

2. ONCE UPON A TIME…

3. THIS IS HOW WE DEFINED ECONOMIC PROCESS

4. ECONOMICS
The science of explaining tomorrow, why the predictions
you made yesterday, didn’t come true today

5. Output
Land
Labor
Capital
Science
But in the real world
Not gears, but human beings
Landlord
Engineer
Investor
Scientist

6. And real human beings are separated
… by geography, culture, language, time zones, social
networks, and lack of trust.

7. Across an entire system
This happens across entire systems.

9. BUT WE ARE BIOLOGY
…NOT BUILDINGS

10. “Spontaneous sociability is critical to
economic life because virtually all
economic activity is carried out by
groups rather than individuals.”
Economic historians Douglass North and Robert Thomas
(P47 of “Trust”)

11. ACTIONS  OUTCOMES
This is where we tend to focus

12. BELIEFS  BEHAVIORACTIONS  OUTCOMES
This is where we need to focus

13. Implicit Explicit

14. NATURE IS AWESOME

16. THE RISE OF
INDUSTRIAL
ECONOMIES

17. Scarcity

19. THE EMERGENCE OF
KNOWLEDGE &
CREATIVE ECONOMIES

20. Abundance

22. EXPLICIT  TACIT

24. For a new species
temperature, humidity,
precipitation, sunlight,
soil/nutrients, other flora/fauna
For a new startup
capital, entrepreneurs,
laws/norms, ideas/inventions,
talent, markets

25. Ronald
Coase
Richard
Thaler
E.O. Wilson
“Design Thinking”
(Rolf Faste, et al)
fMRI imaging
Ilya
Prigogine
Francis
Fukuyama
Can we engineer serendipity through design by
weaving together a tapestry of inter-disciplinary
ideas to create a “bottom-up” economic model?
James
Fowler
Danah Boyd
Sean
Gourley
Hernando
de Soto
Robert
Sapolsky
W. Edwards
Deming
Annalee Saxenian
Frederick Jackson Turner
Ade
Mabogunje

26. YES!

27. More important…and more difficult…is creative reassembly
Because we know it’s not just about creative destruction

28. Like a fractal equation in nature…

29. …what is the micro cultural pattern that generates
macro phenomena in places like Silicon Valley?

31. “It is not the strongest of the species that
survives, nor the most intelligent…
but the one most responsive to change.”
Charles Darwin

32. 20 years from now…what will be the next

33. Hic Sunt Dracones

34. Here Be Dragons

35. Navigation vs. Cartography

36. INNOVATION = KNOWLEDGE  MONEY
INVENTION = MONEY  KNOWLEDGE

37. Ambiguity + Discomfort
Uninformed + Intelligent

39. To develop innovation, we need more than
mere programs.
We must build tribes of trust that practice
culture based on diversity, lowering social
barriers, aspirational motivations, and
norms that promote rapid, “promiscuous”
collaboration and experimentation.

40. A New Paradigm
• Predict and Repeat  Learn and Adapt
• Business Planning  Business Modeling
• Eliminate Risk  Manage Risk
• Never Fail  Fail fast and cheaply
• Outputs  Outcomes (Patents ≠ Products)
• Invention  Innovation

41. Tell me and I forget
Show me and I remember
Involve me and I understand
“Chinese Proverb”

42. Rules of the Rainforest
Rule #1: Break rules and dream.
Rule #2: Open doors and listen.
Rule #3: Trust and be trusted.
Rule #4: Experiment and iterate together.
Rule #5: Seek fairness, not advantage.
Rule #6: Err, fail, and persist.
Rule #7: Pay it forward.

43. Opportunity
CapitalTalent
Ideas
The Innovation
Ecosystem

44. Across an entire system
What can we learn from psychology?
How does human behavior really change?

45. Across an entire system
People learn behavior through real-world
“doing,” role modeling, peer interaction
with diverse partners, feedback
mechanisms, and explicit codes of
conduct.

47. •Who has the reputation, resources and
commitment to lead new initiatives?
•Who will champion new initiatives within
their own organizations?
•How can leaders and champions be more
inclusive?
•Who are the entrepreneurs?
•Who are the service providers?
•Who are the inventors?
•Who are the capital providers?
•Who are the support organizations?
•What is the role of government?
•Who are the other key participants in the innovation ecosystems?
•What is the regulatory environment for
innovation?
•What legal/bureaucratic barriers stand in
the way of entrepreneurship?
•What widespread social norms surround
the innovation ecosystem?
•What resources are available to aspiring
entrepreneurs (knowledge, mentorship,
cloud hosting, etc.)?
•What sources of capital are there in the
marketplace?
•How does this capital flow and interact
with growing businesses?
•What is the volume and quality of talent in
the labor pool?
•What are the main sources of innovative
ideas/discoveries/inventions?
•What resources are available to service
and support organizations that interact with
entrepreneurs (workforce training, etc.)?
•What are people already doing to stimulate
innovation/entrepreneurship?
•How are these people collaborating with
each other?
•What activities drive participation in the
community?
•What events create ‘buzz’ and generate
interest?
•Where, when and how do stakeholders
interact?
•How do ideas, talent and capital come
together?
•What are the lines of communication
between partners?
•How do members of the community
collaborate with each other?
•How does the community engage external
or global partners?
•How does the community encourage
recruit new constituents?
•How do young people get involved?
•What forums exist that allow the
breakdown of social and professional
hierarchies?
•Who are the local entrepreneurs that have
built successful companies?
•Who are the local entrepreneurs that
haven’t yet been successful and what can
we learn from their failures?
•What regions have similar attributes and
resources?
•What organizations have shared
visions/values?
•Are there other regions with successful
innovation ecosystems that we could learn
from or emulate?
•What is the density and quality of service providers (law, IP, consulting, real estate, etc.)?
•What boundary spanning organizations exist?
•What is the local level of serial entrepreneurship?
•What is the density and quality of physical infrastructure (airports, internet connections,
etc.)?
•What are the core sectors of the local economy?
•What are the strongest regional comparative advantages?
•Where do people come from?
•What are their value systems?
•What are their motivations (money, reputation, lifestyle, self expression, etc.)?
•What are the ‘amenities of place’?
•How do we create and maintain a sense of urgency?
•What kind of innovative social networks exist already?
•How do people deal with uncertainty, risk or randomness?
•How is failure perceived?
•Do people build for perfection or iteration?

48. “If you want to build a ship, don’t drum
up people to collect wood and don’t
assign them tasks and work, but rather
teach them to long for the endless
immensity of the sea.” ~Antoine De Saint Exupery

49. ….and they lived happily ever after

50. A new book by Victor W. Hwang and Greg Horowitt
www.therainforestbook.com
www.innosummit.com
Greg Horowitt
Managing Director, T2 Venture Capital
Co-Founder, Global CONNECT, UC San Diego
Kauffman Fellow