Insights from Silicon Valley and the startup ecosystem
The best place on the planet to get an accurate glimpse of where the future of technology and business is headed is California’s Silicon Valley, says Associate Professor Peter McGraw, Director of the Executive MBA program at the University of Technology Sydney (UTS).
“Business leaders need to understand the tectonic shifts taking place in the realm of artificial intelligence, machine learning and big data, and develop the strategic skills needed to lead enterprises into a rapidly changing future,” McGraw says.
“Silicon Valley is the epicentre of these shifts in technology. It is home to more than 2,000 tech companies including Google, Facebook, Atlassian and Airbnb, and it really is the centre of the startup world.”
McGraw recently took 16 UTS EMBA students on a one-week trip to San Francisco and Silicon Valley to meet successful entrepreneurs and innovators, visit cutting-edge startups and experience the entrepreneurship ecosystem first-hand, as part of the EMBA Global Business Practice elective.
“It’s really a different world – the environment is a lot faster, more dynamic and more open than in traditional business ecosystems. There are large pools of venture capital available, and people are more willing to take risks. The best engineers and developers, the brightest minds from around the world head there, so the talent level is incredible,” he says.
First stop on the tour was a visit to Austrade to hear from young Australian startup entrepreneurs working in Silicon Valley. The Austrade Landing Pad provides a bridge for Australian innovators to connect with venture capitalists, develop their ideas and expand globally.
EMBA student James Farrow says the timing of the Silicon Valley trip was ideal, as he had just taken the leap from working as head of pharmacy at multinational Johnson & Johnson, overseeing $320 million in sales, to developing his own startup company.
“In Australia, the reaction to my decision to venture out on my own was that it was scary or dangerous, whereas in Silicon Valley the attitude was ‘have a go’ – there was less concern about taking risks. It gave me more confidence in my decision,” Farrow says.
Also on the itinerary were visits to global companies Airbnb, a major disrupter of the hospitality industry worth more than $30 billion; Atlassian, an enterprise software company founded by two Australians and now valued at $10 billion; and Braintree, the e-commerce division of PayPal focused on mobile and web payments.
Farrow says the trip allowed him to speak to other entrepreneurs who have been on the same startup journey and who could share insights into the likely pitfalls and obstacles as well as the emotional ups and downs that come with founding your own enterprise.
This included advice and inspiration from Silicon Valley resident and UTS EMBA alumnus Shaun Clowes, who received the Dean’s Award for Best Student in 2010, and who previously held senior positions at Atlassian before moving to his new role as Vice-President at Silicon Valley startup Metromile.
McGraw says Metromile – a “pay-per-mile” vehicle insurer that has received more than $190 million in venture capital – is a good example of an enterprise combining real-time big data collection and artificial intelligence to disrupt conventional industries.
“Their business model shows how processing work that is currently done by humans will be done by computers – with profound consequences for how businesses operate. Metromile uses a wireless device that collects data from your car to determine your insurance premiums,” he says.
Other tour highlights included a Stanford University presentation by Patrick Brown, CEO and founder of Impossible Foods, which aims to disrupt the meat and livestock industry with “meat” made from plants, and a visit to the Delancey Street Foundation restaurant, a social enterprise that provides vocational training and rehabilitation for convicted criminals.
Commonwealth Bank infrastructure services manager Luke Purcell was keen to take up the opportunity to visit Silicon Valley as part of the EMBA program, as he has long been a fan of technology companies such as Apple, and keeps a close eye on new tech innovations.
“To actually go there and meet some of the people was amazing – the pace of innovation and the mindset of people in San Francisco was far more than I expected. The trip has definitely opened my eyes to the possibilities in the tech space,” says Purcell.
“It has had an impact in the way that I work now. I’m asking different questions – looking at how we can do things in a smarter way, realising that we don’t need to spend a lot of time deciding the best approach. Instead we can just estimate, iterate and evolve rapidly.”
Fellow EMBA student Richard Goodman, head of operations for Heinemann tax and duty-free at Sydney Airport, says the Silicon Valley trip was one of the most inspiring and memorable weeks of his professional career.
“We were able to connect openly and honestly with a number of influential Australians who were heavily invested in the San Francisco Bay Area culture and ecosystem. They were candid and transparent in their advice and in sharing the key drivers for success,” says Goodman.
“They provided insights as to why Silicon Valley is so successful in terms of startups, including the willingness to invest in ideas with a higher tolerance for failure, and the importance of structures to support growth. I came away with a reinvigorated approach to business and innovation.”