Wednesday, January 31, 2007

Second Article in Austin Business District Magazine

In my first article for the Sep/Oct 2006 issue of Austin Business District Magazine, I cautioned against blindly trying to replicate the Silicon Valley model in Austin. In this second article I describe what Austin can learn from Silicon Valley and how it will help us discover our unique path.

Come Together Right Now! (Over Us)  

Austin is an attractor for smart, creative people. Our vibrant activity in music, film, technology, food, art, education and gaming (to name a few) is a testament to this fact. This is an incredible asset.
I’ve grown up in IndiaTaiwan and Hong Kong and traveled around the world, but have not seen an environment that attracts creatives like Austin does.
While we attract these folks, we do an uneven job of connecting them with each other. Our first task is to nurture personal connections within these industries and create open source communities.

Welcome Open Source Communities
Healthy communities are characterized by a sense of shared purpose, connections among their members, and a high degree of collaboration. Community isn’t simply measured in the number of connections; it is also measured by the quality of those connections.

Drawing from Silicon Valley: Apple Computer and many of the companies that came from that era were nurtured through gatherings of tinkerers fascinated by the potential of personal computing at the Homebrew Computer Club. In his recently released memoir, iWoz, Steve Wozniak explains how the members gathered, showed off their innovations and shared their knowledge and perspectives openly. In other words, “open source” communities have been the fertile spawning grounds of innovation, long before they have been labeled as such!

Open-source’s premise is that sharing knowledge and connections allows for ideas to flourish. Individuals gain when they share because they receive feedback, which improves their original idea. In some cases, shared ideas are adopted by others who test their efficacy in diverse environments. Open-source organizations tend to be flat, highly connected and resilient.

I suggest that Austin’s community organizers adopt an open source model for their organizations.

Cross pollinate across communities to foster innovation 
Rarely does innovation happen within existing spaces. Rather, it happens at the borders of existing well-defined spaces. When we look to our own home-grown examples, we see that Amy’s Ice Cream is a combination of entertainment and ice cream, RunTex combines community and fitness and Alamo Drafthouse combines passion for cinema with food. Our larger successes, Whole Foods and Dell, are also unique combinations. Technology is just one piece of Austin’s mosaic.
As we develop open-source communities by industry and topic, we should in parallel work to connect them to each other. Here again, we are attempting to connect individuals to spark novel combinations of ideas and experiences. What happens when a musician meets a technologist and they explore how to create an online system for booking bands? (Check out

Foster and promote bootstrapping: an appropriate entrepreneurial model
As ideas and innovations occur through people connecting and sharing knowledge, the formation of new companies should be fostered. Founders should have a sound model for how to get going. Highly capitalized ventures in the mold of Silicon Valley are not the way for us to proceed. Capital is not the scarce resource and the intervention of capital rightly occurs in the later stages of a venture. Indeed, a capital injection in the early stages will be more harmful than helpful.
In Austin, our compelling and sustainable success stories – Whole Foods, Dell, National Instruments and emerging successes like RunTex, Amy’s Ice Cream, Alamo Drafthouse – are bootstrap ventures.

Bootstrappers know that it is customers who fuel a business, and they focus on acquiring these customers by first building a demo, then selling it to the customers and finally,building the product. And our low cost of living is perfect for bootstrapping. Bootstrappers also appreciate that the constraints in the critical “Valley of Death” phase actually create the opportunity for innovation.

Export our innovations beyond Austin
The final step is to take those businesses that become sustainable and export them beyond Austin. Many of our wonderful companies are currently content to stay in Austin. But the world is waiting to experience our creative output. This is precisely where investor capital injections can help greatly.
There are many details to be worked out within the broad outline of these prescriptions. We have all the ingredients; they just need to be organized. 

Let us take tangible steps towards helping Austin take its rightful place as the innovation capital of the world.

1 comment:

Miles Sims said...

great article Bijoy, I think that cross-pollination can lead to some great & innovative ideas.