The document discusses the Silicon Valley startup ecosystem. It describes how capital, education, infrastructure, culture and policy interact to support entrepreneurs and startups. It also examines how launchpads like accelerators and incubators have lowered the barrier to entry and how money flows to startups earlier than in the past. Emerging technology areas seen as promising include cloud, mobile, social, security, big data and quantified self. The concluding questions discuss potential implications of continued lowering of startup barriers and a strengthening global economy and capital availability.
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Welcome to the Bubble: Understanding the Silicon Valley Ecosystem
1. Understanding The Silicon Valley Ecosystem
Draft 20120903
Gary A. Bolles
Co-founder, eParachute, Inc.
A Talk for Auckland University of Technology
2. Startups
◦ Communications, enterprise applications,
education+work
Media Past Clients
◦ 6 tech magazines HP
Cisco
Events Nokia
◦ Custom & new Google
United Nations
Strategy consulting London Business School
3. How does the ecosystem work?
How are the people flowing?
How is the money flowing?
What’s hot and what’s not?
5. EDUCATION
Mentors
Research/IP
CAPITAL Engineering & Science
ORGANIZATIONS
Angels
ECONOMY Super-Angels
Small institutionals Market
Large institutionals ENTRE- Buy early
Tech Industry
Banks PRENEURSSTART- Buy later
Large acquirers
Investment banks
UPS Employee bases
PRODUCTS
INFRASTRUCTURE CULTURE
ENVIRON- Communications POLICY Tolerance for failure
Transport Intellectual Property Reward for innovation
MENT Hubs Investment Meritocracy
Services Immigration
Consultants Mergers & acquisitions
Public markets
6. EDUCATION
Mentors
Research/IP
CAPITAL Engineering & Science
ORGANIZATIONS
Angels
ECONOMY Super-Angels
Small institutionals Market
Large institutionals ENTRE- Buy early
Tech Industry
Banks PRENEURSSTART- Buy later
Large acquirers
Investment banks
UPS Employee bases
PRODUCTS
INFRASTRUCTURE CULTURE
ENVIRON- Communications POLICY Tolerance for failure
Transport Intellectual Property Reward for innovation
MENT Hubs Investment Meritocracy
Services Immigration
Consultants Mergers & acquisitions
Public markets
8. Idea
Prototype
MVP
First Customers
Initial Growth What
Market Viability
Money
Appears
Breakout Growth When?
Market Dominance
9. That Was Then…
Friends & Family Idea
Angels Prototype
This is an over-
simplification, Super-Angels MVP
but for
purposes of Small Institutionals First Customers
illustration…
Large Institutionals Initial Growth
Mid-stage Capital Market Viability
Later-stage Capital Breakout Growth
Public Markets Market Dominance
10. …This Is Now
Friends & Family Idea
Prototype
Angels MVP
Super-Angels First Customers
Small Institutionals Initial Growth
Large Institutionals Market Viability
Mid-stage Capital Breakout Growth
Later-stage Capital Market Dominance
Public Markets
11. …This Is Now
Friends & Family Idea
Launchpads Prototype
Angels MVP
Super-Angels First Customers
Small Institutionals Initial Growth
Large Institutionals Market Viability
Mid-stage Capital Breakout Growth
Later-stage Capital Market Dominance
Public Markets
12. Y Combinator
500 Startups
TechStars
AngelPad
Kicklabs
Founder Institute
I/O Ventures
Plug & Play
Dogpatch Lab
The Hub
…and many more
13. Low-cost infrastructure
◦ Barrier-to-entry nears zero
Launchpads can be efficient
◦ One of the ramifications of “Abundance”
Social spread fuels adoption
◦ Never easier to create a brand more rapidly – or to destroy it
IPO>M&A>Acqui-Hire
◦ Human resource is the scarce commodity
Pure, large-scale venture model is widely regard as
broken
◦ Too much money chasing too few exits
14. Cloud
Mobile
Social
Security
Big Data
Quantified Self
15. “The lean startup” rules
• Agile everything
The social and business graphs are well-
established; treat them as infrastructure
• LinkedIn, Facebook, Twitter, Google+
Market traction resolves risk
• Established business model in a large market
16. What happens if the bar continues to lower?
What happens if the global economy picks up?
What happens if the amount of available capital
increases?