Making connections

How does it work in the tranches

A question that I often get is "all these ecosystems sound good, but how does it work in practice?" In other words, being a CTO, a VP of Innovation, a Head of (New) Business Development, or a founder is not unique to Silicon Valley; why is that people seem to play openly, nicely, and productively.

The give

As compelling as the the BMW + Google connection may be, not all ideas are winners. Therefore, before the next good idea strikes, everyone is looking for practical insights ready for immediate application.

Benchmarks are always nice, i.e. we allocate X% to support our innovation efforts. Best practices are usually poplar, i.e. this is how we ensure smooth transition to a BU that owns the distribution. Business model often brings on spirited discussion, i.e. after trying X, Y, Z, this is what works for us.

The Take

Beyond sharing, the same forum can provide a safe environment to ask questions. Quetions on organizational changes, i.e. we are moving to a new organizational structure, what is the likely to impact my work? Questions on new ideas, i.e. I want to propose an initiative, what are good ways to get buy-in? Questions about an industry/application, i.e. we are exploring ways to offer excess capacity to this industry, what do you think?

The specifics may differ, but your cohort understands your issues and has your back. And, through this process of give and take, you know who to call when a flash of brilliance hits.

Connections

To paraphrase what Ron Burt of the Structural Holes fame argued in his recent book Neighbor Networks, being a node in the network, i.e. a stack of the bsueinss cards from the formal ecosystems, is nice but what you bring to the network, i.e. the give and take to help each other, is what makes your connections robust.

One last point worth noting is that this willingness to share is in part driven by the only certainty in Silicon Valley which is that future cannot be known a priori. It was not obvoous that Google should beat out Yahoo. It was not clear that e-reader will take off with Kindle. Today, with Facebook replacing Friendster in a handful of years, who is to say what social buying will be like in another handful of years.

Alum networks and a detour on IP management

Saying Adieus, nicely

Employees do leave. As long it is not massive, it can be healthy and allows new talents to join the team. In Silicon Valley, if somebody is leaving to start a new company, he (usually it is a "he") is viewed in positive lights. Even when a person is heading to a competitor, beyond the standard safe-guard for legal and business protection, people usually remain in good terms. The reason being that Silicon Valley is a small and dynamic place. So, in a few more years, you could be working for the same side again.

As a matter of a fact, alums from various organizations, for example Netscape, form an informal but influence ecosystem in Silicon Valley. Having worked in the same company, there is a higher level of shared experiences, expectations, and networks. These all make working together at a different company subsequently easier.

Protecting your IP

An implication that people do not often considered with the at-will law is what to do with IP (intellectual property). If you have patents, it affords greater protection when somebody leaves. But, not everything is patentable, i.e. trade secrets, and not all patents can be easily protected.

In my experience, IP is a bigger deal in hardware because it is easier to prove infringement. Software usually competes on dimensions that are more execution related such as distribution, feature set, and bueinss model. In other words, know and protect your IP. But, also know that IP has its limitations.

Incidentally, in conversations with Silicon Valley employment attorneys, everyone was flummoxed by the law suit between HP and Oracle over Mark Hurd, who left HP as CEO and soon after joined Oracle in the late 2010. It simply does not seem to be a good use of HP's legal resources.

Innovation's ecosystems

Controlled chaos

With myriad ecosystems - ethnic, employment, and technology just to name a few - overlapping each other in Silicon Valley, the interactions that result in innovative disruption may appear chaotic to the untrained eyes. In reality, serendipity is the rare exception in making these connections.

At the industry level, trade organizations host events and conferences for people to share ideas. At company level, there are specific job titles/teams focusing exclusively on connecting and commercializing ideas. At functional level, there are professional firms who provide platform for structured interaction and matchmaking. Even at academic settings, schools around Silicon Valley are active actors in creating and fostering emerging ecosystems.

As the saying goes, there is a method to the madness.

To be in the game

A fair question to ask is what does it take to participate in these conversations and how do you know they are worth having. After all, we all have an ever growing to-do list and there is only so much time in a day.

If you have a product, that is a good start. Although indsutry requirement differs, a functioning prototype is usually the minimum. Better yet, you get more credibility when there is a beta product with some users to demonstrate market traction. Ideally, you have a product that is adding new users furiously and is inexpensive to scale up. Google and Facebook in the early days are two recent examples.

If you have money, i.e. you are a VC or angel investor, that usually gets you a seat in the table. On the other hand, financial resources itself is not always a sufficient condition, ideally you would be "smart money" too. Smart money are often defined in two parts. One is that you have the experience and wherewithal to not freak out at the first sign of inclement business conditions. The second part is that you can offer additional connections, such as introduction to other funders or executive talents, that are hard to come by.

If you have existing distribution channel/customer base, you can usually get the best seat to the table. Like Steve Jobs had famously commended his team "Real artists ship!", innovation is not real until it has hit the market place. To the extent that you have an established user base, everyone will want to be meet your installed base. Having this blessed position does come with its burden. Deciding what to expose to your installed base to is hard enough. The bigger challenge in innovation is often how to think outside of the box and push beyond the comfort zone. This is no easy task. Think about how Verizon turned down Apple's iPhone and the subsequent boost to AT&T as the sole iPhone carrier in the US from 2007 until 2011.

Employment at Silicon Valley

Do you speak legal-ese

California, where Silicon Valley is located, is an "At-will" state. At-will means that either employer or the employee can break off the employment relationship at any time with no liability. (For exact legal applications, you should consult competent legal counsel, i.e. not me.)

Keeping your team productive

The implication for employers, especially software companies, is how to retain key employees. And, this is one of the reasons some Silicon Valley companies offer free meals, games in office, and bring-your-dog day. However, most of the "unconventional" methods are not only defensive in nature; after all, it is also true that happy employees make for a productive workforce.

One thing that is not as well appreciated in the context of at-will law is that it also makes employees more loyal. Instead of contractually tied to a position, everything else being equal, you work there because you want to.

Keep paddling

The other side of the equation is that every employees has to constantly keep up, branch out, and be flexible in applying skill sets. Stagnation is not really an option. Unlike the more established traditional industries where the success of an employee can be defined in terms of how well a long job description checklist is met, job descriptions in Silicon Valley are constantly morphing. Put another way, if there is a long laundry list of what constitutes success for a position, there is a good chance that it can be performed elsewhere at lower costs.

On a day-to-day basis, it is important to keep up with your given field. This could be getting a new technical certificatiion for an engineer or refining a business process if you are an executive. It is always a good idea to keep abreast of emerging trends so that, for example, when the CEO asks how the new distributed Hadoop database will impact company's e-commerce architecture you have a decent answer.

Finally, cross-training is the norm instead of exception in Silicon Valley because ambiguity is a given. Within a discipline, say software engineering, the transaction methods, architecture, and buseinss model requirements are ever changing. This requires the engineerings team to understand the how and why as oppose to merely "doing the work". If you need to reach across functional focuses, for example in product management - usually a marketing function but has to work closely with the engineering team - the ability to converse fluently with both users and development teams is a must.

Like Schumpeter said

As Schumpeter succinctly captured in the term "creative destruction", it is unlikely that what you do today in Silicon Valley is similar to what you did a couple of years ago. As technology, business model, and ecosystems develop, the same job title often demands vastly different skill sets within a short period of time.

For example, when Google popularized the on-line advertising model in early 2000's, there was no pre-existing pool of talents who knew exactly what to do. Initially, the closest parellels were the direct mail and mail-order catalog people. Since the transaction is done on-line, a lot of web designers also got involved. Moreover, with its ability to generate detailed quantitative data on buyers behavior, people with data analysis experiences jumped into the fray. All the while, marketing communication sand pre-sales people, who were traditionally responsible for website and generating qualified sales traffic are furiously learning and hiring new skills sets to meet a new way of doing business.

Within four to five year, by the mid-2000's, the motley crew that utilizes various aspects of the skills above has become an ecosystem known as SEO/SEM (search engine optimization/marketing) with its own tradeshow and gurus.