#ItalianRainforest - Impariamo a crescere. Per una Nuova Teoria Pratica dell'Innovazione. Un evento di Working Capital di Telecom Italia.

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

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

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

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

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

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

26. YES!

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

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. INVENTION = MONEY  KNOWLEDGE
INNOVATION = KNOWLEDGE  MONEY

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. The Innovation
Ecosystem Ideas
Opportunity
Talent Capital

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

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

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

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
Greg Horowitt
Managing Director, T2 Venture Capital
Co-Founder, Global CONNECT, UC San Diego www.therainforestbook.com
Kauffman Fellow www.innosummit.com