The Rainforest – The secret to building the next silicon valley

Attention!!! A long article. Be careful while reading as it is addictive. Keep away from the reach of the children and it is 18+.

I’d definitely put this on to “Must-read” list for anyone dealing with entrepreneurship and innovation…
It is second to none in my opinion for whom are dealing with technology management…
Admirable, Adorable, magnificent, Invaluable, extraordinary and above expectations…

I am talking about the book named “The Rainforest – The Secret to Building the Next Silicon Valley”.

Why do you think many other places in the world, although they have all the infrastructure, money, human capital and incentives, have not been able to create a place like silicon valley. The book deals with that question and highlighted points why silicon valley (SV) is silicon valley and provided practical implementation tools for readers.

Here are the points from the book:

* SV is unique in its own ecosystem and its kind of rainforest with its talent, ideas and capital.But good news is it is transferable:) but attaining the same success is challenging.
* The book is about the nature of complex innovation ecosystems.
* One of the key things to create an innovation ecosystem is the free movement of ideas, talent and capital.It is done with social unnamed rules such as tolerance for frequent job changing.
* The axioms are really noteworthy for example: axiom #1 says While plants are harvested most efficiently on farms, weeds sprout best in Rainforests.
* Ecosystem is formed by the followings:
a. Ideas & inventions
b. Government support
c. trade & Industry Organizations
d. Education & Workforce development
e. Real Estate & Business Infrastructure
f. Culture, Social norms, rule of Law
g. Money
h. Talent
i. Coaches & Mentors
j. Academic & Research
k. Business Support Service
l. Access to global markets & supply chains
m. News & Media outlets

* Downing the transactional costs (stifle valuable relationships before they can be born. For instance; compare the two cases. In first, an investor and an entrepreneur had a coffee at Starbucks and investor said after 1 hour meeting and I am investing 1M USD to your business idea and tomorrow the entrepreneur sees the money in its bank account. In second, there is only a handful of people who can or ‘d like to invest in for an entrepreneur. Assume that you are lucky and you find that investor and he says he needs letter of indemnity or letter of guarantee for his investment as if he is a bank. Even you pass that stage you have government and it requires you to finalize some paper work which needs lots of effort… You may have 10% of the money 6 months after your meeting with the investor. That is transaction cost.) is of great significance for an innovation ecosystem to become radical in change.
This can be done via keystones. Keystones are people who know everyone and their abilities and connect all ecosystem players one another. If there are 2 people in the ecosystem they can be combined only just one way. If there are three they can be connected by 2 different ways. If there are n and provided that they ‘d be combined one time we have (n*(n*-1))/2 connections. But think if every single one is combined one another. The formula is the following: n* (n-1) which means two times more connections.

* Further to above-mentioned fact, axiom #5 says: The vibrancy of Rainforest correlates to the number of people in a network and their ability to connect with one another. And keystones are critical as they are integrative, influential and impactful (I liken it the “I” character in the DISC personality model). They bring people together, they convince people and they make things happen. moreover, Rainforest axiom #7 says: Rainforests depend on people who actively bridge social distances and connect disparate parties together.

* Why people join rainforests? here are the motivation reasons:
-altruism, A chance to give back to others.
-adventure, An emotional rush for “The Next Big thing”. Courage to participate groundbreaking technologies before anyone
-Challenge, Climbing the hills that others have said impossible.
-Competition, Desire to compete against others are heart pumping.
-Connections, Joy of meeting new people and developing connections.
-Friendship, Form long-lasting relationships based on trust.
-Learning, satisfaction of learning from others.
-Team, Pleasure of being part of a larger group.

* Building blocks of the Rainforests are:
-Thrill of competition
-Human Altruism
-A thirst for adventure
-A joy of discovery and creativity
-A concern for future generations
-A desire for meaning in one’s life

* Developing trust, social norms and connectivity are the key elements for an innovation ecosystem.

– Development of an entire innovation system is different from encouraging innovation of individual small teams.

Larta Institute
T2 Venture Capital


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