My Silicon Valley Trip: 6 Key Insights from the Innovation Powerhouse

In December of last year, I had the pleasure of taking 30 executives completing a Master of Business Administration at the UNSW Australian Graduate School of Management to Silicon Valley. We spent a week immersing ourselves in the innovation and entrepreneurship culture of the Valley, meeting with thought leaders, start-ups and entrepreneurs. We had the opportunity to visit the headquarters of multiple companies such as Uber and their driverless car facility, Apple, Cisco and Ideo. 

The annual trip aimed to showcase a number of different elements of the Valley:

Innovation in Australia and Silicon Valley looks different. The trip highlighted the distinct differences in entrepreneurial mindsets between the Australian innovation community and Silicon Valley. 

Different insights into different companies. Multiple insights into start-ups, mid-sized companies and older, mature organisations such as Cisco and Apple were uncovered.

Leading-edge thinking. We wanted to understand the current leading and cutting-edge thinking surrounding technology and digital transformation. 

Innovative business structures. We realised the importance of understanding new business models and ways of working as well as gaining an appreciation for different company structures and the funding cycle.

The ever-growing gap between rich and poor. The trip allowed us to gain an appreciation of some of the cultural and societal challenges currently being faced in San Francisco due to wealth accumulation in the start-up scene and the widening gap between the wealthy and the not so well off. 

The necessity of venture capital. Throughout the trip, we gained a deep appreciation for the venture capital (VC) community and the integral role VC and corporate venture capital (CVC) plays in business growth and development.

Silicon Valley’s secret sauce. All members of the trip developed an understanding of the ‘secret sauce’ that drives the innovation engine in Silicon Valley, allowing us to learn what is actually so special about Silicon Valley and why one community can generate such a large amount of the world’s innovation and new ideas.

Despite this being my fourth time on a trip such as this, it is safe to say that each and every time I go, I learn invaluable knowledge and insights from the Valley, some of which I would like to share with you here.

Silicon Valley maintains its position as a global innovation powerhouse. Silicon Valley and the Bay area remain powerhouses of innovation and entrepreneurship at a global level. The oozing uniqueness of these areas come from their extensive ecosystem of founders, funders and large corporations all located within a relatively small geographic area. This proximity facilitates constant communication and collaboration between members of this ecosystem, allowing for organisations to have access to the right people at the right time. This provides a significant advantage to those seeking funding and those looking to invest.

1. Failure is a badge of honour. The approach towards innovation in the Valley is extremely different to Australia. For example, the notion of failure is a concept that is almost bragged about in Silicon Valley as opposed to the topic being classified as taboo in Australia. We are getting better at accepting failure, but we have a long way to go.
2. The amount of capital in the Valley is far greater than in Australia. The scale of capital being invested in Silicon Valley is significantly higher than in Australia, thus attracting start-up ventures to the Valley which would otherwise seek funding in Australia, as well as simply providing more fuel for growth and a longer runway.
3. Growth and expansion is key. Whether this growth and expansion is through M&A, Venture Capital or Corporate Venture Capital (CVC), new growth opportunities are vital for the survival of many large incumbents not only in the Valley, but globally. The older companies in Silicon Valley are continually looking for new opportunities outside of their traditional business and industry. These opportunities are being monetised through the establishment of venture arms providing CVC to start-ups and high growth companies. For example, companies such as Cisco have long used M&A as a growth engine.
4. The culture divide between start-ups and traditional corporates is hefty. In Silicon Valley, there continues to be a strong divide in culture between the start-ups that are rapidly scaling and the large incumbents within the area that have been present for years. While the traditional companies are trying to reshape their culture, on the other hand the smaller companies are attracting significant talent by providing a very flexible and ‘home-like’ culture. 
5. The Valley remains a ‘bubble’. While Silicon Valley remains a powerhouse of innovation and entrepreneurship, there remains an innovation ‘bubble’. While in the Valley, it was evident that, despite the immense amount of entrepreneurship and disruptive thinking present, many individuals and organisations within the Valley are completely engrossed in their own world. While somewhat understandable, it is a shame that many of these individuals are unaware of the innovation work that is occurring in other parts of the world such as China, Israel and Singapore, countries that are now on-par with, or exceeding, the innovation capacity of the Valley.
6. The value of these trips is innumerable. The value of a trip like this to executives ,who also live in their own ‘bubble’, is immense. For many on the trip, their week visiting Silicon Valley and San Francisco, learning from entrepreneurs, thought leaders and corporates was in their words, ‘a life-changing experience’. The Strategy Group is looking to run missions to Silicon Valley and Israel in the near future, so be sure to express your interest here.