It’s exactly 12 months ago that Bill Reichert, Managing Director of Garage Technology Ventures and Adiba Barney, CEO of SVForum visited New Zealand as guests of Wharf42.

During the week, audiences in Tauranga, Wellington, Christchurch & Auckland heard Bill & Adiba talk about different aspects of Silicon Valley, entrepreneurship & investing. During Techweek AKL 2016, which starts in earnest today, I intend to reproduce some of the content we produced then. Today, I am reflecting on a presentation that Bill gave to an audience at ASB’s Cube conference centre in the Wynyard Quarter in Auckland entitiled; ‘The Secrets of Silicon Valley’.

The Secrets of Silicon Valley is an excellent explanation that details just why Silicon Valley is the global innovation hub it is. Many have tried to replicate the model. No-one has succeeded.

Bill Reichert explaining the Secrets of Silicon Valley

Bill Reichert explaining the Secrets of Silicon Valley in Auckland

Full credit to Bill and GarageTechnology Ventures for the use of this content.

  1. Single Focus

    1. No competing communities

    2. Self-selected population

    3. Concentration of energy

Silicon Valley sits on what historically were horticulture orchards close to Stanford University. There were no existing communities to compete with the emerging innovation sector. Today, the majority of people living and working in Silicon Valley are not from the region. It has become a melting pot of entrepreneurs and investors from around the world. This combination of factors creates a concentration of energy leading to a single focus.

  1. Concentration of Talent

    1. Universities, high tech industry, support system

    2. Open, diverse, inclusive, flexible, global

Silicon Valley is now home to a significant concentration of talent. Stanford, UC Berkeley and other UC campuses possess some of the world’s leading research institutes. Global tech giants, VCs and the other members of the support ecosystem cluster together. The culture is open, diverse, inclusive, flexible and global. This combination of factors creates a virtuous circle which simply attracts more talent.

  1. Culture

    1. Of value creation, not money-making

    2. Of collaboration: Pay it forward

    3. Of confidence: Change the world!

    4. Seeking fairness, not advantage

    5. Tolerating failure

Culture emerges as a key dynamic within the Silicon Valley ecosystem and it reaches all parts. I personally recognise all these in spades. It’s what makes this region so special and keeps drawing me back. These are attributes that any regional ecosystem should seek to foster.

  1. Venture Capital

    1. Highly collaborative

    2. Highly competitive

    3. Seeks fairness, not advantage

    4. Plans for surprises

VC. No surprise here then. This slide though perhaps needs some updating. Over the past few years, there have been some big changes in the funding sources. Corporate venture plays an increasingly important part in the mix. And the large PE firms and institutional funds have been actively investing in emerging unicorns. It’s an intoxicating mix. Groupon (anyone remember them?) at one point picked up close on US$ 900M from Goldman Sachs. Building global businesses is not cheap. (Check out this slide in a previous Wharf42 post.)

  1. Global Reach

    1. Silicon Valley is no longer just a geographic location

    2. It is a global innovation hub

This is why Wharf42 invited Bill and Adiba to come to New Zealand. New Zealand entrepreneurs and investors need to engage directly with this hub. It is one way to scale the multiple start-up company opportunities that we have.

  1. Focus on Innovation, not invention

This is not a mixed metaphor slide. As Bill explained, most of Silicon Valley’s tech giants did not invent the products that made them famous. Apple did not invent MP3 players, Facebook did not invent social networks. Instead they reached out to the market and innovated what was already there. Innovation makes money. Invention often doesn’t. That’s the reality.

  1. Role of Corporations

    1. Open to collaboration, investment, acquisition

If one slide resonates with me about the difference between Silicon Valley and New Zealand, this is it. I have seen at first hand the role that corporations play in the Valley. There are corporate venture funds, corporate innovation centres, corporate incubators and accelerators. Corporations from around the world have set up shop in the Valley to engage collaborate, invest and acquire. There is not much evidence of a New Zealand presence. Maybe we think that the 5,000 mile ocean that separates us will protect us from emerging, disruptive technology. Wrong. Our major corporates need to engage more.

Having spent much of the last five years based in the Valley, my strong view is that our challenge is not to try and replicate but to engage and collaborate. New Zealand has its own special attributes. Our isolation means that we have a very innovative mind-set. There are many areas where Silicon Valley can actually learn important lessons from us. This week offers us the opportunity to demonstrate our own strengths and celebrate them. We then need to take them out to the global market and tell our story. And that includes the Valley.

The team at Wharf42 looks forward to taking part and meeting peeps at different events through Techweek AKL. Hat doffed to Jenn and the team at ATEED for putting on the show. Reflecting on the words of Bill & Adiba 12 months ago will provide us with a sense of both context and reality as we do.