At events in the Silicon Valley over the past two months since my return to the US, I’ve grown more and more impressed not only with the distinct environment that the Silicon Valley is to work, live and collaborate in, but with the caliber of people and ideas coming from
this historical hub of innovation. Yesterday was no exception at the SVForum Apps to Platforms Conference in San Jose, CA. Mayor Chuck Reed opened the event by highlighting several of the unique attributes of the Silicon Valley. San Jose, crowned years ago as Capital of Silicon Valley, is still a thriving place for innovation as was evidenced by the advanced topics of the conference. With visionary thought leaders speaking and participating in panel discussions from big name companies IBM, Microsoft, Google, Box, and Twitter alongside visionary thought leaders from several companies that may become big names in the coming decade, the conference has me thinking about three things: First, the importance of the team, second, the importance of the idea and third, the importance of the strategy.
First, teams play a vital role in determining the success of any venture but in particular that of a fledgling venture. In a personal conversation with one entrepreneur yesterday, we discussed teams as one of the things that venture capitalists are looking for. While it seems like common knowledge, it is worth repeating, if you are an entrepreneur: know that venture capitalists aren’t just investing in your idea; they’re investing in you and the people you are working with. Many great ideas have been left in the dust because the right team was not at the helm. Later, some of these entrepreneurs may wonder why someone else took the lead with a similar idea and unfortunately look outwards, rather than inwards for reasons why their success was not the same.
While it is hard to judge exactly how entrepreneurs make decisions about the team they work with, it seems to be generally accepted to work with the people you know or the amazing buddy you struck gold with when the idea was born. The point was made during the conference that sometimes founders need to step aside so that companies can grow because the same fortune that brought that person into the venture may not actually turn into fortune. If founders do not step aside focusing on their strengths as their companies grow they must adapt, growing and developing. This is what we see with those at the helm of companies such as Facebook and Box; those CEOs are the same people but do not lead the same as their younger selves with the original ideas.
Second, ideas are important and having the right idea is a good part of the equation for success in Silicon Valley. It is important to know when an idea should be abandoned. As the conference yesterday was centered on apps and platforms, it was obvious that ideas can be successful as either apps, platforms or both but it seems that when an idea encompasses both it is more likely to be successful. This had me re-thinking through one of my own ideas, which had previously been focused solely on the application side. I realize now there is far greater potential in platforms and this idea could benefit from a platform approach. Now, don’t go expecting me to quit my blogging and dedicate the rest of my life to the idea; I’m good at sizing up market segments, analyzing growth rates and making projections and this particular niche idea would be a nice project, not a world changing idea. My future ideas, though, will bear in mind the definition of a platform business model as presented by Sam Ramji, VP of Strategy at Apigee, “It is a business model which builds value for multiple sides in a given market by consolidating customers, simplifying market-wide processes, and rewarding each player in the value network between the value network and the customers.”
Strategy, the third of the things on my mind today, should be the driving force behind every maneuver in a company, especially at its inception and, as was discussed yesterday, when deciding app vs platform. I once heard a story about a baggage car of a train that due to an incorrect switch at a rail yard ended up several thousand miles from the intended destination. This was not like today when if you and your baggage are separated and it can be flown to wherever you are in a matter of hours. This was a terrible mistake. To the passengers on the train, this meant they would be much longer without their belongings. The mistake was a relatively small one, not more than a few inches separated the rails that ultimately separated the baggage from the passengers, yet inches became thousands of miles. The wrong strategy at inception can similarly equate to you being very far from success. You’ll go farther with the right people, the right idea and the right strategy.