LET’S NOT FORGET THE “HARD BUT ESSENTIAL” ENTREPRENEURIAL INITIATIVES!

I have been frustrated for some time with the high level of “noise-hype” in Silicon Valley about social media and the so-called ”disruptive technology” start-ups. The noise has abated a little – but only a little – since the Facebook IPO debacle. Yet one still opens the Business Section of the San Jose Mercury News to find one story or another of “wunderkinden,” aged 25 or less, unleashing “earth-shaking” startups with enormous growth prospects and stratospheric potential valuations. And this phenomenon is not limited only to the local press. The New York Times seems to have a similar tendency to regularly “feature” such up-and-coming high tech companies.

To be fair, I acknowledge that I tend to be somewhat “old school” and am therefore struggling to be “in the flow” with the social media revolution. I am, however, starting to appreciate social media’s significance as a powerful vehicle for communication, marketing and connectivity, as well as the remarkable flexibility represented by interlinking technologies such as cloud computing being implemented by many of the companies with which I am involved. I certainly do not want to discourage any entrepreneurial efforts, as they are the life-blood both of the young and of our economy.

But I am concerned by a seeming lack of balance. Our world’s population is growing at a frightening pace. We need an injection of innovation to produce enough food, clean water, energy and health services to survive. These industries require entrepreneurship just as much as do our pure-play high tech efforts. I want to see as much enthusiasm about starting (and financing!) a new solar photovoltaic cell concept or a novel targeted disease therapy as I want to see another clever App – maybe even more, especially when it comes to game Apps. Our young university graduates must be encouraged to deploy their creative juices in new ventures in the engineering and science-based industries in spite of the fact that they will take years to develop and millions of dollars to commercialize. The motivation should be to make a significant impact in the world, not merely near-term financial gratification.

This is one reason that I have agreed to put together an entrepreneurship course with biotech executive Howie Rosen for this Fall at Stanford University. The course will focus on capital-intensive, long-development/lead-time industries with high intellectual property content, such as biotech, bio-engineering, material science and energy. It will be offered to senior and graduate level Engineering students and to participants in the Stanford Center for Professional Development. It is intended to complement the many excellent “high tech” courses that Stanford offers in both the Engineering and Business Schools.

The need for innovation in the “hard but essential” industries has come home very clearly to me during these last few weeks. I had the privilege to serve as a mentor to an outstanding and inspirational group of Third World entrepreneurs in the 10th Anniversary Class of the Santa Clara University Global Social Benefit Incubator (GSBI.) I wrote about this critical initiative in my August 26, 2011 post titled “The Pleasure of Combining Entrepreneurial Experience with Social Impact.” The current cohort of 20 entrepreneurs comes from a broad range of nations in Asia, Africa and Latin America. They serve the poorest four billion citizens of this earth, the “Base of the Pyramid.” Their initiatives are characterized by a deep social purpose coupled with a drive to be self-sustaining and scalable. They spent nine months in an often grueling qualifying effort to be considered for the in-residence program just completed a few weeks ago. Once the cohort has been reduced from 180 applicants to 20 winners (a process that takes about four months), each winner is paired with two Silicon Valley executives who serve as mentors. Mentors and social entrepreneurs are then engaged in a series of tasks to build and refine their business plans. The effort culminates in a two-week, in-residence boot camp comprised of classes and working sessions that produce a business plan good enough to pitch to potential investors. The description of the “Class of 2012” makes for inspiring reading.

What struck me about this year’s group is that innovation does not pertain only to new products. Some does, to be sure, in particular as designs are tailored to the true needs of the local customer base, needs which are seldom met by our more advanced and complex products in the developed world. But more impressive to me was to see the innovations in other aspects of the product life cycle, such as in creative distribution approaches to serve the market. This is especially important in the very difficult last mile, where our social entrepreneurs labor under political and logistical circumstances that would challenge the best among us!

So I want to encourage our eager young university students, when they consider their careers, to tackle the exciting and essential initiatives needed to create potable water, clean energy, plentiful food and better health care for this world. And if the entrepreneurial spirit calls, take the plunge – even if the journey to success takes years, not just months, and requires Malcolm Gladwell’s ”10,000 hours”, not just a flash of an idea and a quick 12-month development cycle. (See my Dec 1, 2010 post “Are Your Start-up Ideas Good Enough?)

ENTREPRENEURSHIP ABROAD IS ALIVE AND WELL – WITH A STRONG SOCIAL CONTEXT

I love entrepreneurship. I have dedicated my life to it. But seeing it flourish globally with a strong social emphasis gives me an even greater sense that it is a force that can and will change the world.

Last week I had the honor of serving on a panel of judges in the 12th Annual Global Social Venture Competition (GSVC) at the Lester Center for Entrepreneurship of the University of California at Berkeley. (See GSVC for more information about the competition.)

Twelve finalists came to California to present and defend their business plans. They had been chosen from a slate of 850 proposals from 31 countries. The nine judges represent many different skills and areas of business. Some are leaders of venture capital divisions of major global companies like Dow and Intel. Some lead practices in major law firms. Some run their own venture capital firms. And some, like me, are retired or acting business executives. Several are headquartered abroad and traveled internationally to be judges at this competition.

Just the sheer number of applicants gave me a sense of the scale of interest in social entrepreneurship around the globe. Looking at the 12 final business plans showed how serious the effort is. The concepts were thorough, the analysis sophisticated, and each plan showed a good balance between sound business and social responsibility. But what really touched me most were the entrepreneurs themselves. Some had traveled from far away to be there, and their excitement – and awe – was palpable. Many had brought along prototypes of their products, and had assembled good management and advisory teams. In some cases they invested their own money to test the ideas. Their business concepts were diverse, including, among others: fuel efficient, clean burning cooking stoves (Prakti Design); reliable information on potable water availability (NextDrop); cheap, eco-friendly construction materials for low income housing (Beti Halali); low cost detection of cervical cancer (DeepScan); water puirification products (Findg One Drop); more cost effective sanitation systems (Sanergy); improved supply chain for coffee growers (Ikawa); and even a smartphone app that allows game-players to participate in reforestation efforts around the world (TreePlanet.) Learn more about the finalists and winners by going to Finalists.

Listening to the entrepreneurs and sensing their commitment and pride in their endeavors took me back to the early stages of my career when I was pitching our incipient concepts to investors. Yet while we had a strong notion of how our ideas would change the world for the better, our sense of social responsibility was much less substantive than what I saw in these plans. Initiatives like Berkeley’s GSVC are a wonderful way to stimulate and promote the creation of profitable ventures with sustainable and meaningful social value. Above and beyond the prize money, the exposure generated for these young enterprises will serve them well. I fully expect that many of these businesses will succeed and thrive.

MENTORING: ONE OF THE GREAT JOYS OF THE ENTREPRENEURIAL JOURNEY

When I die, I would like my epitaph to be very simple: He touched and he cared. Building and growing companies has allowed me so many opportunities for both. It is easy for me to list the big ones; many are in my book. Yet, it is the small ones that sometimes contain it all, and I just experienced one of them – or rather re-experienced it.

In 1981, when Catalytica was a small company of about 35 employees and had the beginnings of a chemical laboratory, we hired a young man by the name of Steve Weber. He had no experience in chemistry, having worked for his father in a manufacturing business after high school. Eventually, he took some courses at a junior college in the San Francisco Bay Area where one of the Catalytica managers was teaching. We were planning a move to a new facility, were building a laboratory, and needed help. Our manager spotted this bright and skilled young man and asked him to talk to me. I liked him and we made him an offer as a laboratory assistant. For the next six years he was everywhere, with his outgoing personality and his “let’s get it done” common sense attitude. There was hardly a job he would not tackle.

After six years Steve became restless and decided to move on. He bears an uncanny likeness to Tom Hanks, so when the film Forrest Gump came out in 1994, he found his niche as a look-alike, building a successful career as an inspirational speaker, author and blogger.

We had lost touch until Steve called me a few weeks ago, and over breakfast he shared with me how his life developed after he left us. It was wonderful to hear that his experience with Catalytica had helped shape his future, and to see the ways I personally had touched and inspired him. The fact that I spoke at his going away party is something he never forgot, and I never realized how much Dorothy Jongeward, a very special mentor of mine, had also impacted his life. Since he does a much better job than I could at describing our conversation I direct you to his February post: http://www.speakinggump.com/wordpress/?p=1042.

WELCOME TO A CONVERSATION about “Letters to a Young Entrepreneur”

In Letters to a Young Entrepreneur, I share some of the highlights of my entrepreneurial journey. On this website, I continue to offer reflections on my leadership experiences, and very much welcome your comments, critique and suggestions. Most importantly, I invite you to share your own experiences and insights, as well.

My hope is that through this dialogue we will all benefit from our common entrepreneurial adventure, and perhaps provide some new approaches to the challenges we all face as we embody our dreams.