Christal
Cooper
Guest Blog By Matt
Swanson,
Managing Partner for Silicon
Valley Software Group
The New
Wave of Entrepreneurship
There is a multi-trillion dollar economy opening
up to technology faster than ever. It has been driven by trends that have changed the nature of how entrepreneurs will
be characterized going forward; specifically, industry executives will be the
next wave of in-demand startup CEOs.
In April of 2007, Apple changed everything with the launch of
the iPhone. It is hard to imagine that it has only been 8 years since the
release of the first truly pervasive smartphone, but there is no denying its
impact has been world-changing. Beyond the creation of a new dimension of
industry-driven, by location-based, services (and with it, a myriad of billion
dollar companies), an equally significant phenomenon emerged. By creating technology that was intuitive to
the consumer masses, every person around the world started to embrace
technology as more than just a work tool. Lawyers, doctors, car
mechanics and people from every sector of the economy not only had a tool for
productivity, but a piece of technology in their pocket they embraced as an
intimate part of their lives.
Furthermore, these new consumers
could now point to a standard for usable technology. Cumbersome, enterprise
legal software that won’t allow a lawyer to search cases from outside the
office is no longer acceptable. For those outside of the Silicon Valley silo,
conversations can be heard from construction workers sitting on a lunch break
saying “Wouldn’t it be nice if there was an app to …”. Unfortunately, these conversations are often too far away from Silicon
Valley’s ears, which are still dominated by the talk of what will be the next
WhatsApp or Instagram. Even so, a new breed of entrepreneur is emerging
who see firsthand the challenges in their industry, and with that the opportunity
to make a world-changing impact, and these entrepreneurs do not fit the founder
archetype that many Silicon Valley investors look for.
Previous decades saw similar shifts in entrepreneur
characterizations. The late 90s were
about Harvard MBAs applying traditional management techniques to
leverage brand new Internet technologies. The “aughts” brought on the “22 year-old Stanford Computer Science”
graduate applying technology to a low hanging industry. Now, in this
decade, we are seeing a new wave of entrepreneurship
driven by industry executives with deep product backgrounds leveraging
technology to disrupt a traditionally non-tech industry.
For the past 2 years I’ve had the opportunity to see this shift
firsthand as the managing partner of Silicon Valley Software Group (SVSG), a firm
of CTOs focused on helping companies with their technology strategy.
SVSG has
seen entrepreneurs ranging from movie producers, lead singers of platinum album
rock bands, travel executives, and hedge fund managers all trying to figure out
how to leverage their domain expertise through technology. After a number of
similar engagements, a few observations have emerged:
Observation 1:
In each venture, a product-focused entrepreneur saw the
adoption of technology among their peers in a particular
industry and, with that, the opportunity to create a product
focused on that industry.
Observation 2:
None of these entrepreneurs had
notable tech experience.
Hardly ANY of these high profile individuals had relevant
connections with the Silicon Valley community.
Observation
3:
This
last observation is of particular importance!
As
tunnel-visioned as Silicon Valley might be, there is a reason that it has
produced so many world-changing companies.
The combination of growth capital,
multidisciplinary talent, and mentors sharing best practices around how to
create hyper-growth businesses are often taken for granted by those who are
part of the ecosystem. However, the disconnect between Silicon Valley natives
and outsiders is shocking. Many of the companies SVSG has come across have no
ability to raise strategic capital at first because their businesses are too risky
when considering common pitfalls they are more likely to fall into compared
with their Valley peers. Concepts as commonplace as the lean startup
methodology are welcomed as sage insight to these new entrepreneurs.
What is missing for these new
founders is a bridge into Silicon Valley. To date, this has been stymied by a
narrow mindset from the Silicon Valley community. However, the forces of
capitalism will eventually prevail and these new entrepreneurs will find their
own community to center around. Keen
investors will lead the herd and take advantage of existing markets ripe
for change. Incubators and accelerators will emerge with a focus on entrepreneurs with deep
industry experience. We are in a tech boom right now and there are
countless ways to apply technology to industries that haven’t changed in
decades. For those sitting in the corner office, the time has come to venture
out, there are markets to disrupt.
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