Each year, the MIT Entrepreneurship Center and Sloan School of Management travel to Silicon Valley to meet with dozens of companies, incubators, and venture capitalists.
Within three days, we learn the new buzz words -- last year it was "pivot" and "lean startup," this year it's "social graph" and "repotting." Just as quickly, we start to see the limitations of the concepts and tire of them. But more importantly, we get a real visceral sense of the latest trends. In this vein, here are some of my personal observations:
1. Quora: Man is this company hot!
They have harnessed a potential major force -- crowdsourcing -- and seem to have found a high quality way to execute it. They have taken the next step to hybridize key elements of Facebook and Wikipedia and are executing on it very well so far. There are definitely networking effects that could make them the next YouTube. They also have Academy Award--winning software developers leading the way.
2. Facebook vs. Google
While these companies might seem to be similar in many ways, there is a fundamental and profound cultural difference in their approaches. Google's approach to problems is a technology-centric solution, (e.g., we can solve this with a smart algorithm or technology breakthrough.) Facebook, on the other hand, has a product-centric solutions approach. In the end, a product is valuable not just because of superior technology but because of what it captures (e.g., the social graph).
3. Now, It's Facebook with a #1 Ranking
People see the future (with good reason) as being Facebook, namely the knowledge of the user and his/her preferences (the social graph) is what will be most critical in the future. Having uncustomized searches will become a commodity. Customization and its competitive advantage comes from the social graph.
4. The Future Is Mobile, but Will It Be Android?
Smartphone adoption is now outpacing PC adoption. The iPhone and iPad are seeing unfathomable market adoptions rates. That being said, the Android's popularity is surging. If Apple is not careful, what happened in the PC operating system market could repeat itself with the mobile world: Apple gets points for being artistic and the pioneer, but someone else runs off with the majority market share because their system is open and runs on multiple platforms. Apple has the huge market cap today, but trends are usually more important than absolute position.
5. Clean Energy Investing and Entrepreneurship is Much More Rational
The crazy "greentech"/"cleantech"/"enertech" movement has settled down now with a chastened and much wiser approach from investor and entrepreneurs. People have realized that sustainable environmental solutions require sustainable business solutions.
6. Less Self-Absorption in the Valley
Maybe this is a kind of variation of Heisenberg's Principle whereby when you measure something, you change the outcome. But Silicon Valley seemed much less absorbed with itself this year. That is, this year I saw more recognition that there was an important world beyond Silicon Valley. Location is becoming less important as technology "flattens" our world. We are all connected to each other and your company can and should have a presence in many different regions. Groupon, the biggest story of 2010, symbolized this in spades, as it came out of Chicago. As one Palo Alto entrepreneur said, "it couldn't have happened here; we just couldn't see that kind of business model with our conventional wisdom."
7. They Can't Figure out Groupon Either
Oh yeah, as I just mentioned, the biggest story of 2010, is a mystery to the really smart people out there too. Not only did they not see it coming, it is very unclear where they go from here.
8. Rich Wong of Accel Partners is a Super Star
Yes I will admit I love a guy who is an engineering geek, logged some time in a large company (Procter and Gamble) then became an entrepreneur and has an MIT degree, but he is also so entertaining, humble and did AdMob last year as well as some other sweet companies. That makes for a good year and I am confident that more are to come.
9. China: They May Call This the Year of the Rabbit But Maybe Gorilla is More Appropriate
You can't go anywhere in Silicon Valley without becoming overwhelmed when the discussion turns to the business opportunities in China. The sheer magnitude that China represents is mind-boggling. We had one student on our tour who had over 400,000 people following him on the Internet (I have those zeros right). The IPOs for 2010 were dominated by Chinese companies or companies serving the Chinese market.
10. MIT Sloan MBAs Are the Best, But Boy Do They Need to Learn to Market Themselves Better
The good news is how intelligent, diligent and professional these MBA students in their late 20's are, and what incredible accomplishments they have had already. They are just what the world needs for an innovation-based economy. But they need a massive upgrade in personal branding. Their understanding of how to present and sell themselves holds them back. We will work on that this year but this trip reminded me of why they are so wonderful and successful here at MIT and after they graduate.
I feel like I just got a refresh of my data base, a new version of my operating software, and drank a few cans of Red Bull -- and now I am geared up and ready to go. Bring on 2011!