Cross-Border Innovation, Out-Innovate in Asia, FoF strategy

The future of innovation is global. We discuss it here.

A global cross-border innovation brought us the modern Hyundai and the minivan

Do you know where the design of the new Hyundai Iconiq car came from?

The story of Hyundai's design is the story of global innovation. “Let’s face it, 10 years ago, our design strategy was all about the fast follower,” said SangYup Lee, the Hyundai designer." But a new directive and strategy changed things. “The message was: Inspiration can come from anywhere,” said Lee. "Hyundai Motor was dreaming up an answer to Tesla when the company’s top executive sent its lead designer a photo of a bizarre-looking car that last rolled off assembly lines more than 70 years ago.
The Stout Scarab, manufactured in Michigan in the 1930s and 1940s, looked like an outlandish cross between a bus and a pontoon." It helped launch the minivan (see video lead).

The best ideas indeed come from anywhere and scale everywhere.

The Silicon Valley playbook is being rewritten

Honored to have Out-Innovate be reviewed by the Strait Times (the New York Times of Singapore).

In the world of start-ups, Silicon Valley has long been the holy grail, the trend-setter and inspiration for entrepreneurs everywhere. The roughly 520 sq km stretch spanning San Francisco and San Jose known as the San Francisco Bay Area – which is smaller than Singapore – has been home to some of the world’s most iconic companies, including Alphabet, Apple and Facebook, now known as Meta…Twenty-five years ago, 95 per cent of venture activity happened in the United States, most of it concentrated in the San Francisco Bay Area…But no longer, according to Mr Alex Lazarow, a roving venture capitalist [my new favorite moniker] and author of the book Out-Innovate…Innovation is now everywhere, he says – not just in advanced-economy cities like Berlin, London, Montreal, Singapore, Tallinn and Tel Aviv as well as several US cities outside Silicon Valley.

Coverart for the Strait Times piece

Interesting discussions

Great piece arguing we will see rebuilding in SAAS in the coming years from a sea of point solutions.

“There’s only two ways I know of to make money: bundling and unbundling.” - Jim Barksdale, Netscape

The quote “reflects the observation that some companies compete by building a bundle of products that work better together or are distributed together to take advantage of existing customer relationships…In the case of unbundling, the idea is to focus on building a product that’s best of breed and can overcome the distribution advantages that the bundled alternative product has.”

No new news here, but it is taking longer for startups to raise. “There’s a saying in the startup industry: Founders are always fundraising. It refers to the venture capital treadmill for young companies, perpetually hunting for investors to bankroll their next phase of growth. But now that tech funding is sinking, the adage is truer than ever.”

This is of course challenging for startups. But it also has certain upsides. “It’s reducing the proportion of shotgun wedding funding rounds – a venture firm and a founder who haven’t met, interacted and built a relationship over time.”

Fabulous piece on VC Fund of Fund construction. Let’s start with the brutal reality check. “only about 15% of VC funds return at least 2 times the money invested by Limited Partners.” But the best venture funds meaningfully outperform the median (which is why average venture returns are consistently higher than 2x). “Net of double fees and carried, you could fairly expect a 3x to 5x cash return for [good] seed funds and a 2x to 3x return for (early) growth or secondaries funds.” But portfolio construction matters quite a bit.

How does Latam fintech investing evolve? This was the topic of my last Forbes column.

My wife and I welcomed our second kiddo about a year ago. Totally unrelated to global tech but I resonated with many of the observations from one of my favorite writers about the so called fourth trimester.

Book of the month

How do we learn? What is the most effective parenting strategy? How important is specialization for expertise? How does this change with the advent of A.I.? Does Tiger parenting work?

As a new parent, these questions are perennially on my mind. My ingoing bias is to help my kids achieve their best potential in whatever domain they choose. Since they are too young to choose today, I’ll give them both ample opportunity to experiment and encouragement to complete the notional 10,000 hours.

But does the science support this?

I have been enjoying the fabulous book Range: Why Generalists Triumph in a Specialized World.

As the NY Times reviews it: “Are you a generalist or a specialist? Do you strive for breadth or depth in your career, in your life? After all, you can’t have both. Your time on earth is finite, as are your energy and attention. If you concentrate on doing one thing, you might have a chance of doing it really well. If you seek to do many things, you’ll taste a wider variety of human goods, but you may end up a well-rounded mediocrity — a dilettante.”

The book argues the opposite is true. “Becoming a champion, a virtuoso or a Nobel laureate does not require early and narrow specialization. Quite the contrary in many cases. Breadth is the ally of depth, not its enemy. In the most rewarding domains of life, generalists are better positioned than specialists to excel.”