exploring social innovation in the bay area, tim clark, march 18 2011

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Copyright 2011 The FactPoint Group March 18, 2011 Prepared for VIA’s Exploring Social Innovation program San Francisco and Stanford University Tim Clark, Partner www.factpoint.com +1-650-233-1748 Exploring Social Innovation in the San Francisco Bay Area

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Page 1: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2011 The FactPoint Group

March 18, 2011

Prepared for VIA’s Exploring Social Innovation program

San Francisco and Stanford University

Tim Clark, Partnerwww.factpoint.com

+1-650-233-1748

Exploring Social Innovationin the San Francisco Bay Area

Page 2: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 2

Agenda: Silicon Valley Goes Green and Social

What is Social Innovation? VIA’s Ties to Social Innovators The Recipe for Silicon Valley—including Stanford

UniversityThe PayPal Mafia: Networking and Mobile

Entrepreneurs Mixing models: How Silicon Valley goes Social Trends in Silicon Valley Is the Future Social? Q&A

Page 3: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 3

FactPoint Background

Help high-tech clients identify and address market opportunities. Founded in 1992.

Custom research, not reports, focused on specific benefits (ROI/TCO)

Areas of focus: Cloud computing, open source software, security, cleantech, financial studies.

Asian clients: Hitachi, NTT Data, NTT Labs, NEC America IBM Japan Nomura Research Hewlett-Packard Japan Fujitsu Research Ricoh

Page 4: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 4

What is Social Innovation?

Social enterprisesMicrofinance

Kiva Microplace/eBay

Social entrepreneursSocial sector innovationCleanTech/ Green

businessCooperatives

Buyers Sellers (agriculture)

Social mediaFacebookMySpaceTwitter Wikipedia YelpBlogs and wikis

User Generated Content

Yes, freeBut quality?

Page 5: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 5

Cloud computing: [Every thing]-as-a-Service

“A style ofcomputing in whichdynamically scalableand often virtualizedresources areprovided as aservice over theInternet. Users neednot have knowledgeof, expertise in, orcontrol over theTechnologyinfrastructure in the"cloud" that supportsthem.“

-- Wikipedia

Source: Appirio, 2009

Page 6: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 6

VIA’s Social Innovator connections

Tom Lo (former board member)

Then

Now MicroPlace (eBay

company) Invest wisely. End

poverty.

Andy Cohen (former board member)

Tom Fricke (Indonesia, 1974)

Page 7: Exploring social innovation in the bay area, tim clark, march 18 2011

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The recipe for Silicon Valley Intellectual capital, initially from universities such as

Venture capital 3000 Sand Hill Road, Menlo Park Invest in start-ups, aiming for 10X returns Cash out in IPOs or acquisitions (UC-

Berkeley)

People: Innovative, talented risk-takers Technical, marketing or business skills

Page 8: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 8

Companies with Stanford roots Hewlett Packard—Bill Hewlett, David Packard (1939) Cisco—Started with Stanford network (1984) Netscape—Jim Clark (1994) Yahoo!—Jerry Yang, David Filo (1994) Google—Sergey Brin, Larry Page (1998)

Page 9: Exploring social innovation in the bay area, tim clark, march 18 2011

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What does these people have in common? Sergey Brin, Google co-founder Jerry Yang, Yahoo co-founder (ex-CEO) Andy Grove, Intel co-founder Elon Musk, PayPal and Tesla co-founder

Page 10: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 10

Waves of innovation The Internet wave—Netscape, Yahoo, Google (mid-1990s) The dot.com bust (2000-2001) The Web 2.0 wave / social media Mobility wave: SmartPhones and iPad (tablets) CleanTech Social Innovation

Page 11: Exploring social innovation in the bay area, tim clark, march 18 2011

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PayPal Mafia: Mobile people, personal networking PayPal CEO/Founder Peter Thiel earned $68 million from

eBay buyout. Invested in Facebook, LinkedIn, Yelp, IronPort Engineers and web designer Chad Hurley, founded YouTube. Elon Musk, forced out of PayPal after losing an internal fight,

co-founded Tesla Motors and also founded private space exploration company SpaceX.

Engineer Russel Simmons and Jeremy Stoppelman, VP of Technology, founded Yelp in 2004.

Product manager Premal Shah became founding president of Kiva.org

EVP Reid Hoffman founded LinkedIn in 2002 and was an early investor in Friendster, Six Apart, Zynga, Flickr, Digg, IronPort, Nanosolar, Ning, Technorati, etc.

Page 12: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 12

Trends in Silicon Valley Consolidation—big companies grow by buying smaller ones Cloud computing—Software-as-a-Service (SaaS), On-

demand Open Source—Users get source code to software Mobility—Beyond voice and data to mobile data Green IT—Save the environment, save money CleanTech—Electric cars, solar, energy conservation, etc.

Page 13: Exploring social innovation in the bay area, tim clark, march 18 2011

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Open source’s appeal: It’s not only about costCost counts, of courseFor customers, access to code eases integration

issues.Some see code access as an insurance policy

against their vendor going out of business.Search for commercial open source business

model fixated Valley in last 2-3 years.

Page 14: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 14

Mobile computing: Smartphones and iPads

Smartphones are boomingApple iPhone—Most covetedGoogle Android—Growing fastest RIM Blackberry—Market leader for number in usePalm—Relaunched by Hewlett-Packard for tablet too

Apple iPad Boom in a category that has often failed before Many copycats

Specialty devices Amazon Kindle

Page 15: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 15

Green IT: Sprinkle a little Green on software Web meetings: Adobe,

Cisco Webex, GoToMeeting Power management

software: Cassatt --sold Automated systems

management: KACE --sold Digitize paper processes:

SpringCM on Accounts Payable

Telework: Secure remote access and workflow—SonicWALL, Adobe

How telecommuting pleases workers… More flexibility Less stress Work-life balance Control of time Lower commute costs More time at home

…and employers too Lower absenteeism Higher productivity Better job satisfaction Higher retention rates Lower training costs Easier recruitment SonicWALL, 2008

Page 16: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 16

Silicon Valley Goes Green and Social

Page 17: Exploring social innovation in the bay area, tim clark, march 18 2011

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How Silicon Valley can go green and social

Software engineering talent Venture capital financing Entrepreneurial talent Political/governmental savvy Global market

Page 18: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 18

Barriers in Silicon Valley

High costs Global competition—China in solar Manufacturing issues

Labor costs Supply chain

Page 19: Exploring social innovation in the bay area, tim clark, march 18 2011

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Mixing Models: How Silicon Valley goes social Hewlett, Packard and Moore Foundations Google.org—is it CSR or philanthropic? eBay co-founder Pierre Omidiyar, Omidiyar Foundation Cypress Semiconductor, T.J. Rodgers, incubated and spun

out SunPower, solar company Applied Materials, Santa Clara, chip equipment to solar cells eBay acquired MicroPlace (micro-finance) VIA: Nonprofit runs for-profit operations in travel, typesetting

Page 20: Exploring social innovation in the bay area, tim clark, march 18 2011

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Where the green companies are

AutosTesla Motors, Palo Alto, manufacturer of electric carsBetter Place, Palo Alto, recharging stations for electric cars

Energy efficiencyNovaTorque, Sunnyvale, efficient motors (ex-VIA founder) People Power Co., Palo Alto, open source software to manage energy use of appliances

Smart grideMeter, San Mateo, software for smart grid dataSilver Spring Networks, Redwood City, hardware and software for smart-grid networksTrilliant, Redwood City, technology for smart-grid communication

Page 21: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 21

Ways to go Green

Energy generationBloom Energy, Sunnyvale, on-site power generation using fuel cells

SolarAusra, Mountain View, large-scale solar panels (acquired February 2010 by French nuclear company Areva)Akeena, Los Gatos, installs solar panels SolarCity, Foster City, installs solar panels Solyndra, Fremont, manufactures solar panels

Green building materialsSerious Materials, Sunnyvale, energy-efficient drywall, windows,

Food materials World Centric, Palo Alto, biodegradable containers, utensils

Page 22: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 22

Lessons from Silicon Valley There is no stigma in failing. Instead, what did you learn? Serial entrepreneurs are valuable—and pampered It’s a small, small town—personal connections matter With venture capital, you must build the business model and

the technology to scale. Small is not beautiful. Doing Well vs. Doing Good—Can they be the same? Location matters:

Irish Innovation Center, San Jose: Danielle McCormick left Dublin a year ago to found myCubi.com. "If you want to create a global brand, you have to be in Silicon Valley."

VCs hate to travel—poor, poor Chicago

Page 23: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 23

How Stanford University fits in Source for engineering talent Source for business talent Center for Design Research—design for extreme affordability Center for Social Innovation

Page 24: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 24

Questions for ESI participants Is failing in a social enterprise a negative? Where do you find personal connections for social

enterprises? Must a social enterprise scale/grow large to be successful? Can you do well while doing good? What would you do after your first social enterprise

success?

Page 25: Exploring social innovation in the bay area, tim clark, march 18 2011

Copyright 2009 The FactPoint Group Do not reproduce without permission 25

Exploring Social Innovation

ThanksThanks

Tim Clark, [email protected]

+1 650-233-1748