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Startup ecosystems, tech saves the world and Dune
The future of innovation is global. We discuss it here. June 2021 Edition.
News of the month
This month, a new report was published on the state of startup ecosystems around the world.
The report highlights the rise of startup ecosystems outside Silicon Valley. Among the top 20 cities, twelve are outside the United States. Beijing has propelled itself to #3, up from 17 in 2019. Mumbai, Shanghai and Sao Paolo have similarly rocketed up. On the country level, Canada is #4.
While I was surprised at some of the rankings (e.g. didn’t realize Moscow was in top 10), I resonated with the metrics on the growth and momentum in startup ecosystems around the world.
What do you think?
As some parts of the world start emerging from lock-down, it is worth reflecting on what got us there. In that vein, I resonated with much of Marc Andreessen’s recent piece about how “Technology Saves the World.” “We are coming out of COVID years early, with many livelihoods and businesses preserved, compared to what we had any right to expect. And overwhelming credit goes to our spectacular technology industry. The most amazing COVID technology story has to be the vaccines… Telemedicine has been technologically viable for two decades, but COVID provided the final push for insurance reimbursement and therefore mass adoption, which I expect to continue.” And in the face of lockdowns “much of the economy kept operating, and in fact many parts of the economy started operating even better under lockdown than before. The primary credit for this goes to the American worker, but almost as much credit is due to the technology that made this miracle possible.” It of course isn’t all rosy. Social networks have divided us politically for instance and big tech is getting bigger. But credit is due where credit is due.
Earlier this month, I wrote about the rise of the African tech ecosystem. This year there have already been four $100m+ financings in Africa, more than all other years…combined! So you might be thinking: how do I go about investing in Africa? In that vein, found this primer fabulous. It covers everything from demographics to markets, and influential people to key accelerators. Enjoy!
The innovation supply chain explains how the best ideas emerge from everywhere and improve as they scale. Great piece that explores this story in social commerce and some of the emerging models in emerging markets. “social e-commerce embodies more than rapidly scaling industry disruptors. Its tremendous potential in emerging tech countries also lies in its ability to cultivate strong networks in countless small communities… The social e-commerce landscape is rapidly evolving, with new startups entering the market all across high-growth countries.”
I’ve previously covered the rise of venture capital around the world, as well as new models. One of the challenges is finding LP capital that is willing to bet on something new or different. In that vein, great piece on a new matching tool. “Let me put it like this: We’ve gotten to a point in venture where there are an ample number of tools out there that help founders and investors leverage their community into checks. What’s missing, though, are the tools that help the community-less, undernetworked and underestimated access those opportunities. While there still is LP hesitancy as emerging managers raise their second and third funds, this effort is a good step in the right direction.”
Another dimension to innovation in venture capital is the rise of solo capitalists, or rather the rise of unique strategies for them to punch above their weight. “For those taking the pulse of the venture market from the online discourse, micro VCs seem everywhere. But the data suggest a different story: there aren’t more of them — they’re just amplified, using specialized approaches and savvier Internet distribution”. To my surprise, there are less micro VCs today than there were in 2010. But today’s micro VCs are excelling at standing out, through their network, marketing strategy, or content. They are also becoming much more specialized.
I have written about the need for startup ecosystems to ‘set the table’ so to speak - to create the necessary preconditions to make innovation possible. That is one of the things that catalyzed Silicon Valley. But it is also at risk. “America’s convoluted and highly politicized immigration system puts roadblocks in the way of foreign-born founders. As two dozen other countries woo them with startup visas and other perks, the U.S. is at risk of losing its edge in the global battle for talent.” It is one of the reasons I advocate for a Startup Visa in the U.S.
Fun to sit down for the Emerging Market Enthusiast Podcast, where we discussed everything from technology cross pollination to what it takes to scale.
Book of the month
This month I read a novel that had been long on my list, but for whatever reason I had never read: Dune.
As the Guardian reviews it: “Though Dune won the Nebula and Hugo awards, the two most prestigious science fiction prizes, [like many startups] it was not an overnight commercial success. Its fanbase built through the 60s and 70s, circulating in squats, communes, labs and studios, anywhere where the idea of global transformation seemed attractive.”
Without spoiling the story for those that have not read it, it speaks to many relevant themes in this newsletter: the importance of narrative combined with strategic leadership to have success in the field, the importance of connection (although in this case catalyzed by a drug called melange), and the power of the powerless.
It was also an excellent audio play on Audible.