Author Archives: Hervé Lebret

Immigrants and Unicorns

Thanks to the a16z weekly newsletter, I just discovered another interesting study about the importance of migrants in the US innovation landscape: Immigrants and the Billion Dollar Startups (in pdf). Here are some key findings:
– 51 percent, or 44 out of 87, of the country’s $1 billion startup companies had at least one immigrant founder.
– 62 of the 87 companies, or 71 percent, had at least one immigrant helping the company grow and innovate.
– immigrant founders have created an average of approximately 760 jobs per company in the United States.
Of course this is limited to the Unicorns, private companies with a rather young history, but these are impressive data.

Immigrants and Billion Dollar Startups

If you have never read anything about the importance of migrants in Silicon Valley, you might also be interested in the work of AnnaLee Saxenian. Now, I copied the data from the study, to add my own comments:

Unicorns_and_migrants

In terms of geography, out of the 44 start-ups, 14 are based in Silicon Valley and 12 in close-by San Francisco.
In terms of education, out of the 60 immigrant founders, 23 have studied in the US universities, including 5 at Stanford and 1 at Berkeley vs. 4 at Harvard and 2 at MIT.
In terms of origin, the study gives the individual countries and I was interested at Europe: 15 come from the European Union vs. 14 from India and 7 from Israel.
Interesting, right?

Two Challenges of Technology Transfer – Part 2, Get to Know Your TTO.

My second post about Technology Transfer (following the one about National Systems) is about the micro-economics of the activity. This is motivated by the very good Keys to the kingdom – subtitled What you need to know about your technology transfer office.

Before summarizing its content, let me remind you about the posts which already cover the topic so you will agree it’s not a new topic for me and I consider it as important:
– University licensing to start-ups in May 2010 (www.startup-book.com/2010/05/04/university-licensing-to-start-ups) followed by
– University licensing to start-ups (Part 2) in June 2010 (www.startup-book.com/2010/06/15/university-licensing-to-start-ups-part-2)
– How much Equity Universities take in Start-ups from IP Licensing? in November 2013 (www.startup-book.com/2013/11/05/how-much-equity-universities-take-in-start-ups-from-ip-licensing)
– Should universities get rich with their spin-offs? in June 205 (www.startup-book.com/2015/06/09/should-universities-get-rich-with-their-spin-offs)

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Co-authored by 18 people from Stanford, Oxford, Harvard, the University of California in San Francisco and the University College London, the article describes what should know people interested in getting a license on intellectual property to create a start-up. The paper begins with “As an academic […]entrepreneur, you will face many challenges” and the second paragraph follows with “In addition, you will most likely have to negotiate with your university’s technology transfer office (TTO) to license the intellectual property (IP) related to your research”.

What are these challenges related to TTO? they are written in the article in bold fonts as follows: Overcoming information asymmetries – Long negotiations – Inexperience – Lack of funding – Conflict of interest rules – Experienced legal counsel. This means that as a future entrepreneur, you should be prepared and ideally be knowledgeable about these.

The challenges

The main challenge seems to be the administrative complexity and opacity (page 1), including confidentiality of contracts, which makes it difficult for outside observers to understand fair market terms (page 1 again). In the end, they nearly conclude with: “Indeed, even for the universities for whom we have data regarding equity policies, it was often hidden deep within a jumble of legalese. To that end we encourage universities and research institutes receiving public monies to be fully transparent in their equity and royalty policies, and not use these information asymmetries as a bargaining advantage against fledgling […]entrepreneurs.”

On page 2, I note:
– A negotiation may be long (6-12 months, even 18 months) and one way to make it short is to take the proposed terms.
– A way to mitigate inexperience is by “preparing an adequate business plan or strategy for your IP before approaching your TTO” or by “bringing aboard team members with prior experience in […] commercialization to improve your team’s credibility”.
Lack of funding can be partially solved by signing “license option agreements”.
Conflict of interest rules “exist to prevent academics from playing both sides of a technology licensing deal or devoting too much time to nonacademic obligations”. Furthermore, “TTOs represent the interests of the university (not the academic), yet the academic is technically an employee of the university. “Our policy is to never negotiate directly with the faculty,” says a US-based TTO representative”.
– Experienced legal counsel is advised for assessing the quality of the IP but also because “[…]entrepreneurs often fail to appreciate the opportunity cost to the TTO in outlicensing. If a technology is licensed to an ineffective team (particularly with an exclusive license), the university forgoes any success or revenue it may have received from licensing the technology to a better organized industry partner. Moreover, universities have limited resources and manpower to protect IP, and, for this reason, prefer to license technology to teams they believe are well prepared to commercialize it.”

The equity deal terms

“Perhaps the most striking difference between the United States and United Kingdom is seen with equity deal terms. In the United Kingdom, a typical licensing deal is a rarely negotiable 50:50 split between the university and the academic […]entrepreneur, whereas US interviewees often reported universities taking a 5–10% negotiable equity share.”

You now understand why I said I was not convinced in my previous post about taking the UK as a reference. The US practice shows space for debate. You may check again my article from November 2013, where you will see that a typical deal is either 10% at creation or 5% after significant funding. Very rarely more.

Again the authors mention “US founders often do not realize that some deal terms are negotiable, including upfront fees, option payments, equity, royalty payments, milestone payments, territories covered, field of use and exclusivity versus nonexclusivity” and “In the UK, licensing deal equity terms are often perceived as being non-negotiable, though this is not always the case. In fact, many institute policies explicitly state that equity terms are negotiable.” This may however make the process lengthier.

On page 4, the authors add: “It is difficult to understand the justification of UK TTOs, such as Oxford’s Isis Innovation, taking 50% of a company’s equity at formation — which after investment can leave the academic entrepreneur with an extremely low stake from the get-go, for what was likely years of work, and will require many years and millions more to develop.” and indeed “The data would suggest that TTOs taking less upfront and leaving more to the academic and investors who will actually carry the idea forward pays off in the long term. Simply put: holding a smaller piece of something is still more valuable than a large piece of nothing.”

The mystery of royalties

“It is also worth noting that while a discussion on royalties was outside the scope of this study, it was clear from our research that many university TTOs “double dip” and take significant equity and royalty.” but again “Perhaps more disquieting than the out-sized equity and royalty stakes that universities are claiming is the lack of transparency from many universities on this critical issue.”

My conclusion: any wannabe entrepreneur should read this short 5-page paper and be prepared to negotiate. I would love as much as the authors that universities and research institutes be fully transparent in their equity and royalty policies, though I am also aware of the possibly weakened position of universities which would do so.

Two Challenges of Technology Transfer – Part 1, the National Systems.

Two documents have led me to describe two types of challenges facing the technology transfer of academic institutions.
– First, at a macro-economic level, the challenge comes from the various possible administrative structures, but also the complexity of the operations. The report Transfert et Valorisation dans le PIA (in French) by Bruno Rostand compares the national policies of Germany and the United Kingdom to that of France.
– Secondly, at the micro-economic level, the journal Nature published the article Keys to the kingdom with the subtitle, What you should know about your technology transfer office. I will come back to this in my next post.

Mise en page 1

The report of Bruno Rostand addresses the challenges that France meets after having established regional structures for technology transfer, the “SATT”. He notes that Germany has built a similar system with its “PVA” in the Länder. In both cases, there is a goal of financial independence which seems difficult to achieve if not unrealistic, despite the existence of public subsidies. In Germany, two of these companies have even filed for bankruptcy in Lower Saxony in 2006 and Berlin in 2013.

Why such difficulties? Because the returns on investment have not been up to the expectations. For example, approximately €10M euros have been invested each year in the form of public funds in Germany, but revenues remained much lower. In addition the regional structure has its limitations, as it is difficult to gain expertise in all areas of technology.

The United Kingdom has a different situation. The state has been a marginal actor and technology transfer was organized either by universities (Cambridge, Oxford, Imperial College) or by private structures close to venture capital (IP group) which organically helped in structuring technology transfer. Through externalization, these organizations have become private organizations, which have become rich in financial and human resources. At Oxford, ISIS employs 80 people for £14.5m in revenue in 2014. Imperial innovation has been publicly traded since 2006, employs 45 people and generated a profit of £27M in 2014. Imperial innovation has expanded its initial base in collaborating with other universities. Finally, the IP Group has agreements with over 15 universities for a profit of £9.5M in 2014. The report shows very different philosophies, whether public or private, with profitability as an end or not, with an obvious entrepreneurial dimension in the UK. if the focus on start-ups is important, this will lead to different structures, including maturation funds and incubators.

The report also shows that a licensing policy and a policy to support the creation of start-ups are very different. Finally, the new TT structures often have the sole responsibility of the development and maturation of IP, while research collaborations with industry remain the responsibility of universities. This separation could be a weakness when the two topics are linked.

A sensitive issue is that of exclusivity that can create tension when TT management is pooled over many universities. Some universities want to maintain some autonomy, especially in areas where the technical competence of the TT structure seems weak to them. Another sensitive issue is that of the structure by region while a transregional structure by field of expertise might be more appropriate. (The report also addresses research partnerships and international cooperation that I will not discuss here.)

In the final part, Rostand shows the complexity of the challenges. One must first define the mission of technology transfer which can be for profit or not. Externalization seems to be a trend in the three countries, but it has its advantages and disadvantages. It also seems that there is a lot of instability and fluctuations in funding cycles, which does not help to make an analysis of the transfer tools. The report also addresses the issue of human resources (types of skills and experience), another subject which may be related to the available resources of these organizations.

The only personal comment I make here is about my slight frustration at not having found in the report (which is extremely informative) an analysis of the US situation. The country of liberalism and private universities have very few external technology transfer structures, let alone for-profit. I have in mind WARF at University of Wisconsin-Madison – www.warf.org) while revenues of TT in the USA are significantly higher than in Europe. The explanation could simply come from a far more dynamic private innovation, regardless of all the systems in place.

Street Art in Florence

There is probably no city in the world without some Street Art. After my discoveries of Banksy, Space Invader all over the world and the Mirror Mosaic in Pully, here are some pictures from Florence.

Florence_.K_1

Florence_.K_3

Florence_.K_4

Florence_.K_2

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Florence_.K_6

This artist seems to be known via his signature, .K and a couple of other web pages describe his or her work: Exit/Enter and The Elusive “.K”. The next pictures include him again but also famous Clet Abraham who is acting all over the world.

Florence_.K_clet

Here is a little more.

Florence_.K_more

Here is another link of his work in Florence: Florence street sign art by Clet. Finally what about this poetic work?

Florence_Blub

Emerging Science and Technologies, why so many promises? (Part 4)

This is my final post about what I have learned from Sciences et technologies émergentes, pourquoi tant de promesses? (For the record here are the links to part 1, part 2 and part 3).

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The last chapters of this excellent book try to explore ways to solve the problem of excessive promises that have become a system. In Chapter IV.2, it is question of “désorcèlement” (the closest term I found would be “disenchanted”); I read it as a critical analysis of the vocabulary used by those who promise. The chapter speaks at length of the transhumanist movement, the promise of promises! “[…] Describe how these actors certainly produce, but especially divert away, reconfigure and amplify these promises […] in front of passive and naive consumers.” [Page 261] and later “[but] transhumanists are first activists, mostly neither engineers nor practitioners […] attempting answers to questions not asked or badly expressed, […] hence a really caricatural corpus,” to the point of talking about a “cult” (quoting Jean-Pierre Dupuy), “a muddled, often questionable thinking.” [Page 262]

In Chapter IV.3, the authors explore unconventional approaches, a possible sign of disarray to “scientifically” react to the promises. For example, they have contributed to the creation of a comic book to answer another comic which wanted to popularize and promote synthetic biology.

Adventures_Synthetic_Biology

The final chapter explores scenarios that may follow the explosion of promises, like the idea of ​​increasing the number of Nobel Prize. New promises?!! More concretely, the author shows that the initial promises are not followed in practice: “The wait & see phenomenon in investment, or lack of innovation, is less known, though widespread: the effect of general and diffuse promises maintains the interest of players but too much uncertainty holds back investment in cycles of concrete promises-requirements.” [Page 297] “A game is at work which continues as long as the players follow the rules, […] they are prisoners of the game. […] They may also leave it if the right circumstances occur and then the game collapses.” [Page 298]

In conclusion, beyond a very rich description of many examples of scientific and technical promises, the authors have shown how a system of promises was built through interactions between the various stakeholders (the researchers themselves, the (political, social and economic) decision makers who fund them, and the general public which hopes and feels anxiety). The relationship to time, not only the future but also the present and the past, is beautifully described, in addition to a desire for eternity. And finally, we mostly discover that the promises have led to numerous debates that were perhaps, if not entirely, useless, as we could have known that the promises can not be kept, even from the moment they were created…

Emerging Science and Technologies, why so many promises? (Part 3)

This is my third article about the book Sciences et technologies émergentes, pourquoi tant de promesses? After the general considerations on the system of promises, the book presents contributions describing specific areas:

I.3: nanotechnologies
II.1: semiconductors through Moore’s Law
II.2: big ata
II.3: digital Humanities
III.1: neurosciences and psychiatry
III.2: The Human Brain Project (HBP)
III.3: personalized medicine
III.4: biodiversity and nanomedicine
IV.1: assisted reproduction
IV.2: regenerative medicine

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Each chapter is interesting for the curious reader as it shows the dynamics between promises and expectations of stakeholders (researchers, politicy makers, general public). The chapter about the HBP is particularly interesting in the description of the disconnection between content and form. “How was it possible that the HBP “won the competition” despite the lack of evidence to establish pragmatically the scientific relevance and the legitimacy of its ambitious organizational goals? We develop the hypothesis that this deficit, criticized afterwards, was both hidden and compensated by the production of promises shaped to anticipate and / or respond effectively to the political, economic, social and health-realted stakes on the agenda of the “challenges to come”. [Page 166] The credibility of the HBP sealed by this decision has been built […] following an adaptation process and reciprocal validations in the double register of the politicization of science and the scientification of politics. In other words, we show that one of the important conditions of this credibility was the successful co-production of a strategic congruence between [scientific] promises and the agenda of policy issues. [Page 171] The connection between knowledge of the brain and forms of social life took place mainly in the domain of discourse. […] In this contrasting situation, discursive inflation around the brain and neuroscience seems to be the consequence of a lack of evidence, as if it had overcome, positively or negatively, the differences between the present and the future, the proven and the possible, the absence and the desire. This regular feature of big science projects has resulted in the development and implementation of a prophetic rhetoric that seeks to anticipate the possibility of a better future by borrowing to the notions of hope and promise.” [Page 176-77]

I come back to a quote from chapter 3 that is essential to me as a conclusion to this new post: The real progress of techno-science will less come from their ability to keep promises than from their ability to do without them, to inherit critically from the era of great technological promise. This is not to break an idol, but to learn how to inherit. [Page 111]

Emerging Science and Technologies, why so many promises? (Part 2)

(A word of caution: my English is reaching its limits in trying to analyze a demanding book, written in French. I apologize in advance for the very awkward wording…)

So just one day after my article describing Chapter 1 of Emerging Science and Technologies, why so many promises?, here comes an analysis of the second chapter, where the relation to time is analyzed, as well as presentism, futurism and the role of time in the promise system. There is the nice following passage:

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Since The New Atlantis, futuristic speculations have accompanied the development of modern science. And in the twentieth century, Jean Perrin has sealed a new alliance between science and hope. But for him, it is science that preceded and provoked hope while now, it is rather hope that drives research. Technosciences reverse, in fact, the order of the questions that was following the three critiques of Kant: “What can I know?” – the issue addressed in Critique of Pure Reason – then the question “What can I do?” – treated in the Critique of Practical Reason – finally the question “What can I expect?” – discussed in the Critique of Judgment. In contrast, in the current scientific policies, one determines what to do and what we can possibly acquire as knowledge by identifying the hopes and promises. (Page 50)

Yet there is a paradox already expressed in the first chapter between futurism with the terms of promise, foresight and prophecy that project us and presentism particularly marked by the memory that freezes the past and transforms the future as a threat that no longer enlightens neither the past nor the present. To the point of talking about a future presentification…

The chapter also deals with the question of the future as a shock, a time “crisis” due to the acceleration. To the feeling of the misunderstanding and helplessness, is added the experience of frustration and stress caused by the accelerated pace of life, the disappointment of a promise related to modernity, where techniques were supposed to save time, to emancipate.

Another confusion: the features of planning and roadmap which are typical of technology projects slipped into research projects where is used the term of production of knowledge, while in research, it is impossible to guarantee a result. But the author shows through two examples, that this development is complex.

In the case of nanotechnology, there has been roadmap with the first two relatively predictable stages of component production followed by a third stage on more speculative systems crowned by a fourth stage which speaks of emergence, and all this by also “neglecting contingency, serendipity and possible bifurcations,” not to predict, but to “linearize the knowledge production”. The roadmap predicts the unexpected by announcing an emergence, combining a reassuring scenario of control which helps in inspiring confidence and with at the same time an emerging scenario, to create dreams. (Pages 55-56)

In the case of synthetic biology “despite a clear convergence with nanotechnology,” the rapid development occurs without any roadmap. “A common intention – the design of the living – gathers these research paths.” And it is more to redo the past (“3.6 billion years of genetic code”) than to imagine the future. The future becomes abstract and it comes as proofs of concept. And the author adds that in normal science in the sense of Kuhn, these proofs of concepts would have fallen into oblivion. The paradox is that there is no question of right or wrong, but of designing without any needed functionality.

In the first case, “prediction or forecasting are convened as the indispensable basis for a strategy based on rational choice”, “the future looks to the present. “In the second case, there is the question of “towing the present” and “fleeing out of time.” We unite and mobilize without any necessary aim. The future is virtual, abstract, and devoid of culture and humanity; the life of the augmented human looks more like eternal rest …

Ultimately, the economy of promises remains riveted on the present either by making the future a reference point to guide action in the present, or it is seeking to perpetuate the present.

Chapters three and four are less theoretical, describing on one hand new examples in the field of nanotechnology and on the other, how Moore’s Law became a law when it was initially a prospective vision of progress in semiconductor. Perhaps soon a follow-up about the next chapters…

Emerging Science and Technologies, why so many promises? (Part 1)

Sciences et technologies émergentes, pourquoi tant de promesses? (Emerging Science and Technologies, why so many promises?) is the title of a book (in French only) from a group of authors under the direction of Marc Audétat, a political scientist and researcher at the Sciences -Society Interface of the University of Lausanne. This is not an easy reading book, it is quite demanding, but it raises important questions.

I have already reported on this blog about books that speak of a certain crisis of science, for example in The Crisis and the American model (in French), about the books “La Science à bout de Souffle” or “The University bubble. Should we pursue the American dream?” or in The Trouble With…, a book by Lee Smolin, not to mention the most violent criticism of the promises of technology by Peter Thiel in Technology = Salvation.

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This new book explores the promises related to science and technology to the point of talking about an economy of promises. This is a collective work which does not make it an easy reading, but the diversity of points of views is certainly an asset. I have not finished reading it and I will certainly come back to it. In the first chapter, P.-B. Joly describes the system of techno-scientific promises. He begins by introducing the concepts of Imaginary and Vision [Page 33] This “couple of concepts takes into account how various sources of inspiration are involved in the technical creation. […] The Imaginary gives an almost tangible appearance to concepts and ideals that are a priori devoid of it … [and becomes] a common sense that founds the action into society. […] The concept of Vision is close to that of Imaginary, but on a smaller scale. It is akin to that of “rational myth” used to analyze the dynamics of collective action in changing contexts. […] Coalitions of actors form around these visions of a prospective order and contribute to their dynamics. […] If we accept this conceptual distinction between Imaginaries (at large scales – the Nation – and in the long term) and Visions (at a level of coalitions of actors and active over periods of medium length) then comes the question of the interaction between the two.”

“Unlike Visions and Imaginaries, for which the content of technical arrangements is essential, what is essential for the techno-scientific promises is the creation of a relation, as well as a time horizon of expectations. […] Promises are essential in technology creation, because they enable innovators to legitimize their projects, to mobilize resources and to stabilize their environment. […] Any techno-scientific promise must convince a large audience that it determines a better future than the alternatives, even if the realization of the promise requires major, sometimes painful changes.” (The author mentions the history of electricity or the green revolution as the solution to world hunger)

“Our concept of techno-scientific promises has been systematized and became in the last forty years the governance of the new techno-sciences (biotechnology and genomics, nanotechnology, neuroscience, synthetic biology, geo -engineering, etc.) The construction of a techno-scientific promise meets two conflicting constraints: the constraint Radical Novelty and that of Credibility. […] (And I interpret that) for this request to be credible, one must disqualify alternatives. [Furthermore] For a scientific theory to be credible, its validity is neither necessary nor sufficient. […] The techno-scientific promises must have the support of a circle of specialists. Otherwise, they cannot resist the opposition manifested either in scientific arenas, or in public arenas. An extreme version is observed when the specialists refer to natural laws to justify the inevitability of technological change. (Examples are Moore’s Law and Gabor’s Law.) Thus, in principle, generic promises are not subject to validity tests.”

Finally, this intensification is reinforced by three complementary elements [page 39]:
– the future is more a threat than a source of hope;
– research and innovation are often presented as the only way to solve problems;
– the research stakeholders should demonstrate their societal impacts.

This leads to pathologies [pages 40-43]:
– the myth of a public victim of irrational fears and to be educated becomes an intangible scheme;
– the promises turn into bubbles;
– the radical novelty and uncertainty create conflicting discourses, sources of mistrust because the effects of such radicalism is not predictable so that through experimentation, the technologists become sorcerer’s apprentices and society, a laboratory;
– finally promises lead to endless discussions on fictions, on issues that may have nothing to do with the reality of research.

In conclusion Joly thinks this promises system is one of the enemies of the future because of the clear separation it creates between those who make the promise and those who are supposed to accept it. The recognition of this regime and therefore these problems is a prerequisite imperative.

After reading the first chapter, I remembered the societal concerns of Cynthia Fleury, about whom I have already said a few things in a digression in the article On France Culture, Transhumanism is Science Fiction. Our democratic societies are in crisis, and the distrust of politics as well as of experts has never been stronger. The issue of research and innovation is a component of this crisis. I am eager to discover the rest of this very interesting (and important) work …

The Rise and Fall of BlackBerry

Very interesting article in the very good ParisTech Review: The Rise and Fall of BlackBerry. The article shows how disruption is more and more threatening not only for established companies but also fast growing start-ups.

Blackberry was founded in 1984 as Research in Motion by two young engineering students from the University of Waterloo – Mike Lazaridis – and the University of Windsor – Douglas Fregin. They were about 23 years-old. Eight years later, an experienced business man, James Balsillie, would join, invest some of his money ($250k) and become Co-CEO with Lazaridis. RIM funded a lot of its initial activity with partners (Ontario New Ventures – $15k; General Motors – $600k, Ericsson, – $300k, University of Waterloo – $100k, Ontario local development – $300k) so that it raised investor money in 1995 only, including Intel in 1997. The company went public on the Toronto Stock Exchange in October 1997 and then on Nasdaq in 1999.

ParisTech-Blackberry-en

As the authors notice, “though BlackBerry has less than 1% of the smartphone market share today, it once had more than 50%. […] In this era of disruption, the mother of disruption stories is the BlackBerry story. A company that introduced the BlackBerry in 1998 became a $20 billion company from nothing in less than a decade. Then four or five years later, it was back down to a $3 billion company, gasping for breath. It’s not only a disruption story; it is a story of the speed of the technology race today.”

They explain how Lazaridis was a visionary when mobile phones had to be simple devices and how he failed a few years later: “The pivotal moment is January 2007 when Steve Jobs walks onto the stage in San Francisco and holds up that shiny glass object that we all [now] know and love so much, and says, “This is an iPhone.” […] The really compelling part of the BlackBerry story is how they reacted that day. Over in Mountain View, California, you had the folks at Google under a secret project. One was for a new keyboard phone and the other was for a touch screen phone that was going to be run on Android. The minute they watched that live, streaming on the internet, they realized that their project keyboard was dead, and they immediately shifted everything to the touch screen phone…. Mike Lazaridis looked at this announcement, looked at what Steve Jobs was offering, and said, “This is an impossibility.” Again, the conservative engineer brought up on conservation said, “The networks won’t be able to carry this. It’s an impossibility. It’s illogical that anyone would even propose this.” He was right for the first two years. Remember all the dropped calls, all the frustrations, all the lawsuits against Apple and the carriers. It didn’t work…. But then it did, and RIM got it wrong. Two years is a lifetime at a technology rate, and by the time they realized what a serious threat it was, they were at that point followers.”

Blackberry was (still is) the success story of the University of Waterloo and Wikipedia mentions how much Lazaridis has given back to his alma mater: in 2000, Lazaridis founded the Perimeter Institute for Theoretical Physics. He has donated more than $170 million to the institute. In 2002, Lazaridis founded the Institute for Quantum Computing (IQC) at the University of Waterloo. He, with wife Ophelia, has donated more than $100 million to IQC since 2002. This looks very similar to what Logitech and Daniel Borel are to EPFL (where I work). You should read the full article and I conclude here with my usual cap. table…

Blackberry CapTable

Is Silicon Valley crazy (again)?

I regularly go back to my “second home” trying to discover if Silicon Valley has to tell us anything new. This time, I came back a little more confused than after my previous journeys. The region remains the center of entrepreneurship and high-tech innovation, but it seems to touch the limits of madness. Everything goes too fast (except the automobile traffic which is nearly always congested), everything is too expensive, and many are hoping for a crisis to return to a normal situation. Certainly the craziest projects are funded and it is difficult to say what they will become (SpaceX and Tesla of course, but what about MagicLeap or explorations of Google and others in artificial intelligence and augmented human?)

But connoisseurs of Silicon Valley are worried too. So is Michael Malone in Of Microchips and Men: A Conversation About Intel, published in the New Yorker for his new book The Intel Trinity: “The most interesting phenomenon of the last three or four years is that big, successful Valley companies like Facebook and Google and Apple are so flush with cash that the game is now, you build yourself to a certain size and look to be bought. Look at Mark Zuckerberg. He buys Instagram and then he buys WhatsApp. He spends nineteen billion dollars for WhatsApp. That’s a mind-boggling number for a startup. For the first time, acquisitions are more appealing than I.P.O.s. So we are going into this interesting era where maybe companies will choose not to go public anymore, which was always the big-money exit strategy, and instead go do a fan dance in front of Mark Zuckerberg in hopes of getting these insane valuations. What’s your take on the worldly ambitions of the new tech companies? I’m a little bothered by the hypocrisy exhibited by the new generation of Silicon Valley leaders. They’re code writers, and software is different from hardware. With software people, there is this big, romantic philosophy—“Do no evil”—yet it’s always combined with a sort of duplicity. These guys who are running the social-networking era, they’re really behaving like oligarchs: “You know the reason we’re successful is that we’re special. We’re smarter than other people.” You didn’t see that in the early generation of Silicon Valley leaders. They were the children of blue-collar working families. They worked with their hands. So they didn’t try to be your whole world. They didn’t build a campus for you to live on twenty-four hours a day, like in a dorm. They expected you to go home to your family. They had an admiration for working people. You just don’t see that right now with the social-networking guys. Average folks in the Valley, especially poor people, have a really strong sense that these guys don’t care about them. And I think it manifests itself in all sorts of ways, like working with the N.S.A., and the perpetual effort to monetize our private information. It’s a very different world.”

There was also an interesting oral exchange between between George Packer and Ken Auletta, two other connoisseurs of Silicon Valley, although it’s been two years ago: George Packer and Ken Auletta on Silicon Valley.

Packer-Auletta

At the anecdote level, I retained the following from my trip:
– Venture capital is changing due to the departure of former generations and they no longer fund the traditional areas of the semiconductor or hardware, too risky at the product level, nor even the cleantech / greentech (which were not just another bubble). Only corporations fund innovation in these sectors,
– Accelerators are primarily a source of new projects and talents for investors, not necessarily a better model for entrepreneurs,
– Entrepreneurs are stressed by costs and competition that leads to overbidding,
– As a result, the region is saturated, also because its center of gravity moved to San Francisco
– Therefore my belief (still strong) that we need to know the dynamics of this region to innovate and engage in high-tech is modulated by all these constraints and there is probably an opportunity to attract talent, projects and small and large high-tech companies in Europe …

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So will there be a lot of damage as predicted by the Guardian in Silicon Valley braces it self for a fall ‘There’ll be a lot of blood.’? Or do we make the same mistake as AnnaLee Saexnian: “In 1979, I was a graduate student at Berkeley and I was one of the first scholars to study Silicon Valley. I culminated my master’s program by writing a thesis in which I confidently predicted that Silicon Valley would stop growing. I argued that housing and labor were too expensive and the roads were too congested, and while corporate headquarters and research might remain, I was convinced that the region had reached its physical limits and that innovation and job growth would occur elsewhere during the 1980s. As it turns out I was wrong.” (Source: A climate for Entrepreneurship – 1999)

PS: a shot addition (dated February 12, 2016) about the craziness of unicorns. Just have a look at the nice infographics below…

bulle-internet-licornes-dragons
Source: Licornes et dragons font resurgir le spectre d’une bulle Internet