Southern California as an Innovation Center

Creating a place where innovation can thrive is not easy, on a regional, state or national level. It is a mix of good fortune, planning and community, amongst other things. In thinking about what is need to optimize the innovation equation, I think of it as – f(U, C, T, I).

Universities – it really helps to have a set of top notch research universities around that can birth new inventions (tomorrows innovations). This provides for a community of bright, motivated and curious talent. It provides access to the best and brightest academic minds. And it provides for a fluid intern market. I had a great conversation recently with a guy who I think is one of SoCal startups brightest technologists about this. He reminded me of the criticality due to the step from basic research to commercialization (beta at least) being so small in technology. This one of the reasons I switched industries from pharma to tech – the greater rate of change and fewer rate limiting steps. So I’d say we in SoCal score pretty well on this front. I’m not sure the exact rankings of each engineering and business school, but we have some that are clearly amongst the best in the country. I have work to do to understand what basic platforms are where. I also think there is more to do in the outreach and integration of the ‘networking’ community to the ‘academic’ community here in SoCal.

Capital – well it is clear that capital is critical to any innovation center. SoCal is the number #2 in terms of VC investments, but we still lag Silicon Valley. One interesting element is the diversity our region represents from Biotech in SD to Media in LA and everything in between. It’s been great to see our regional VCs doing their part to help build the community – I’ve been really impressed. One challenge that is becoming clearer to me is the challenge for the angel/seed capital raises. Since we have fewer young tech guys with healthy exits under their belts, I think we have a bit of a gap in the market of angels who are comfortable in the young tech teams (invest in what you know right). This is an area where I’m doing everything I can to help improve the situation. But more on that this summer.

Talent – it’s clear to me that we have an abundance of this. I do here things that indicate certain types of talent are hard to find here (e.g. good product people) and it does seem as though we have lost some really good ones to other regions, but overall it appears that we have plenty of talent interested in building our community. One critical factor for building our innovation center is having enough companies (and other opportunities) for people to be comfortable with the risk of joining a startup (knowing that failure rates are high and funding isn’t always easy). I often say we need a fluid community of work – an environment where you may have to make a few short moves (inevitable to find yourself in a not great place – what is an quality entrepreneur if not world class salesperson). I think we are getting closer here and this is one of the great things about the networking events. We have a strong set of leaders putting all of us together at wonderful events so we can get to know everyone. I look at it simply. As I go through my various startup twists and turns (including all the networking), in the back of my mind I’m building my A-Team (an meeting some awesome people too). The team I’ll call on when I have the ‘ah hah’ moment and ready to go for it (some already get calls to help me figure out if something was an ‘ah-hah’ or ‘what the hell’). I think we score pretty well on talent, but the more the merrier so keep the good ones coming to SoCal. (for more on this topic check out this Always On post from an outstanding former IBMer)

Industry – It helps to have a healthy industrial center (industry loosely defined) that can invest in and/or buy technology from startups, spin out ideas/concepts, provide a fresh stream of new entrepreneurs and provide a confidence for the risk takers (the attitude of ‘I can always go get a job at big company x’). Additionally, the industry provides immediate access to the market to help identify real pains and gaps in the market. This is an area where SoCal again scores well, given the diversity of industries. One of the exciting things here is the intermixing (pun intended) of former startups, with new startups, with old companies. We have all levels covered providing for a diversity of talents and perspectives. And just as a reminder, there is much more to SoCal than Hollywood and Biotech!

There is clearly much more to the story and this is one post that will evolve over time. This topic of Innovation Center or Ecosystems is one of my passions (both intellectually and in practice) and something I’ve studies extensively, particularly while at IBM (see ‘about’ for more info). I merely offer this post up as the beginning of a conversation for those of us helping grow the southern California innovation engine. Cheers!

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