blue sky mining book presentation

“INNOVATION IS ONE OF THE MOST FUNDAMENTAL

PROCESSES UNDERPINNING ECONOMIC GROWTH,

THE DRIVER OF GROWTH IN OUTPUT PER UNIT OF LABOR

AND CAPITAL INVESTED.”

- OECD

EXTRACTS FROM THE BOOK BLUE SKY MINING – WWW.BLUESKYMININGBOOK.COM


“ASK 10 PEOPLE TO DEFINE INNOVATION AND YOU’LL GET 10 DIFFERENT ANSWERS. PEOPLE CONFUSE IT WITH ENTREPRENEURSHIP AND, JUST AS OFTEN, INVENTION.…

INVENTION IS JUST ONE TYPE OF INNOVATION AND IT’S OFTEN NOT THE MOST CRITICAL.”

STRONG RESEARCH DRIVEN UNIVERSITIES WITH ENDOWMENTS


“Google was started at Stanford. The intellectual property

that was the initial foundation was spun out and the

university kept a relatively small percentage

of the resulting company. No onerous restrictions were

placed on the IP that would hinder Google’s ability

to raise additional capital. No onerous restrictions either on

what could and couldn’t be done with the intellectual

property, and no onerous managerial or business controls

on the resulting entity. The result was epic. According to

the Wall Street Journal, at time of IPO the university’s stake

in Google was worth $179.5 million. Since that time the

value of Google stock has increased almost 10-fold.”

HIGH TOLERANCE FOR RISK


“The tolerance for risk taking is a huge contributor

to the success of Silicon Valley, and not just for

entrepreneurs. Employees in the Valley understand the

value of risk taking. They know if a company is

successful, their stock options will be worth a lot of

money. Specialised banks show a willingness to offer

venture debt and lines of credit to new ventures with

little or no operating history and unproven revenue

models. Attorneys are willing to work pro bono until a

new venture secures venture funding. Landlords are

willing to rent or lease space to new ventures with no

operating history. Residential landlords and personal

banks are willing to take risks and support people who

may have only just started working with a new venture.”

ACCESS TO SOPHISTICATED RISK CAPITAL


“Ron Conway is one of the most prolific and well known

angel investor in Silicon Valley. Ron is invested in my

company, Mocana. He was an angel investor

in Google, and is invested in Facebook, Twitter and

hundreds of other startups. He brings not only money but

connections, and is savvy in his investment

methodology. An example is an event I attended

in the month prior to the publication of this book.…The

forum was an interactive discussion with Ron’s portfolio

CEO’s about the highest impact practices for building new

ventures, and a discussion on market trends. Huge value

add. Investors like Ron also understand and ensure that

the early fundraising rounds are clean and not overly

aggressive to ensure that the new venture can attract

follow-on financing.”

KNOWLEDGE SHARING


“We see a wonderful dynamic in Silicon Valley around

knowledge sharing. People are willing to share their

experiences openly. I recall last year going to a

local Churchill Club event where Larry Ellison,

CEO and a founder of Oracle, was talking about what

it was like to be CEO of a fast-growing company at

different stages of its evolution. The Churchill

Club, founded by Tony Perkins and Rich

Karlgaard, personifies this culture of knowledge sharing

with

an annual calendar of high-caliber events that allow

entrepreneurs to network and learn from each

others’ experiences.”

CREATIVE DESTRUCTION


“A great example of this in action in Silicon Valley is

Twitter. What few people know is that Twitter started out

as a side project by the founder of a company called Odeo.

Odeo was a blogging site that was going nowhere fast. The

founder, Jack Dorsey gave back Odeo investors’ money and

offered them the chance to invest in Twitter when it

appeared Twitter had more potential, even though it was

still unproven. There aren’t many places in the world

where this would happen. On secondary market

exchanges, Twitter has a value today that is approximately

$4 billion, and some suggest as high as $8 billion.”

GLOBALLY EXPERIENCED REPEAT ENTREPRENEURS


“What most people don’t know is that the founder and

CEO of SpaceX is Elon Musk. He is also the CEO and

founder of the electric car company Tesla, a NASDAQ listed

company with a market capitalization of more than $3.5

billion. (25) He is also Chairman and primary investor in

the largest financier of solar installations in the U.S., a

company called Solar Winds. Before starting or becoming

an investor in these companies, Elon was a founder of

PayPal that was acquired by eBay for $1.5 billion, and also

Zip2 that was acquired by Lycos for $307 million. Elon

Musk is 38 years old.”

CONSTRUCTIVE FAILURE


“Constructive failure means learning from the

experience of failure in a constructive way that benefits

the individuals involved as well as the ecosphere as a

whole.…On the surface, Go was a $75 million failure. But

the executive team learned an enormous amount

working together through those turbulent times. In

other non-financial ways it was not a failure at all: Bill

Campbell went on to run Intuit (and mentor other

CEOs), Stratton Sclavos went on to start Verisign, Mike

Homer went on to help start Netscape and Randy

Komisar went on

to run Lucas Entertainment.”

SUPPORTIVE GOVERNMENT POLICY


“Another example of supportive regulation is the ability

to hire employees ‘at will’ in California and Silicon Valley,

meaning they can also be let go at will and without

cause. This labor flexibility is crucial to a new venture’s

ability to adapt to the market and to the ecosphere as a

whole. Counter intuitively it doesn’t lead to lower

employment, it fosters new venture creation, and

consequently additional employment. Still another

example is tax incentives to encourage new venture

creation.”

SOCIAL CAPITAL


“What you see below are the linkages between one

venture capital firm, the companies it has invested in

and the executives within those companies. It is this

massive number of connections—the social capital—

that also allows venture firms to add value beyond mere

money. The firm shown here is Sequoia Capital,

investors in Yahoo and Google among others. They also

invested in YouTube, acquired by Google, as well as

Cisco and a whole host of companies Sequoia helped

grow that Cisco acquired over the years.”

POSITIVE AGGREGATE RETURNS


“In Silicon Valley the financial returns for winning

investments are huge. They need to be, in order to

compensate for the failures or losses. Silicon Valley has

spawned iconic global businesses, providing stellar

investor returns. As mentioned previously, and to

illustrate just how big these returns can be, Benchmark

Capital put $6.7 million into eBay and two years later the

stake was worth $5 billion.

What good Silicon Valley investors do better than

anyone else is help turn small companies into massively

profitable, global companies.”

WWW.BLUESKYMININGBOOK.COM

blue sky mining book presentation

Economy & Finance