Do you feel inundated with calls to innovate, innovate, innovate? The assumption is that first-mover innovation is key to success, especially in ventures and business. Is this true?
One area that has seen a lot of attempts at innovation is K-12 education. One example is AltSchool, a company started by a successful tech-entrepreneur, Max Ventilla, who decided that his children were not getting a great education in Silicon Valley, and decided to start the “right kind” of school to enhance their innovation skills. This new private school, with annual fees of $26,000, was started with a social mission that is also promoted by Gates and Zuckerberg – to promote “learner-centric learning” for success in the 21st century. The school and its vision are running into problems, and students are leaving.
The school has raised more than $174 million, which is astounding for a startup anywhere except maybe in Silicon Valley. Investors include Mark Zuckerberg (Facebook), Peter Thiel (Facebook investor), Laurene Powell Jobs (widow of Steve Jobs), and Marc Andreessen (Netscape). Bill Gates, who has promoted educational innovation but seems not to have funded this venture, is now admitting that educational innovation is not easy (CNBC interview with Becky Quick, 5/6/19). But his thinking may have influenced this startup.
What can we learn from this?
#1. There is a lot of money burning a hole in Silicon Valley pockets and it is easier to get this money if you are an insider with a vision to change the world. Ventilla became an insider thanks to his software startup that he sold to Google for 5x the investment. After the sale, he wanted to change the world like the founder of Theranos. And that’s what Silicon Valley’s unicorn-entrepreneur-financiers want to hear when they invest – a world-changing vision to do good and do well. Seek money from them if you have credibility in those circles and can spout your world-changing vision.
#2. Traditional proof of venture potential is not needed. To get VC, entrepreneurs normally need to have already developed a great technology (Genentech), or proven their unicorn-strategy (eBay), or demonstrated unicorn-leadership (Bezos). But a Silicon Valley insider with a great social vision does not seem to need real proof and credibility regarding the technology or strategy, or a track record in the field. Ventilla seems to have been able to raise capital due to his vision in education (based on his opinion about his own children’s education), and his track record in a technology venture. Similarly, what did investors see in Elizabeth Holmes of Theranos?
#3. Innovation is placed on a pedestal by these unicorn-entrepreneurs and by many corporations, universities, and governments. But here’s the irony – the unicorn-entrepreneurs funding this venture mostly succeeded not with first-mover innovations, but by imitating and skilled execution:
- Gates knew computers from his high school days because his school had a personal computer when few schools did. After starting Microsoft, he found that IBM needed an operating system for its new PC. Gates bought one and licensed it to IBM. Where is the “innovation” in that?
- Zuckerberg developed apps in high school. When he got to Harvard, he found some students who had an idea for linking students with each other. They hired Zuckerberg to write the app. He appropriated the idea and built Facebook. He then acquired Instagram and WhatsApp. Where is the “innovation” in that?
- Marc Andreessen did not develop the first browser. He had programming skills, and imitated and improved on the other browsers to create the first commercially successful one with Jim Clark.
- Steve Jobs, arguably the greatest entrepreneur of the last 50 years, knew that he was appropriating others’ ideas. He boasted about it by repeating Picasso’s saying that “good artists copy; great artists steal – and we have always been shameless about stealing great ideas." He did that for the iPod, the iPad, and the iPhone. To him, imitation was acceptable if you “improved” others’ innovations, which he did with his unique skills.
Many unicorn-entrepreneurs imitated and improved, which fits with the finding that 89% of first movers don’t dominate. To imitate and improve, entrepreneurs need skills. Why do unicorn-entrepreneurs, such as Gates and Zuckerberg, preach what they did not practice? Why are they funding a private school to teach innovation when they succeeded by having the right skills in emerging industries? Why are they misleading the next generation?
MY TAKE: When they evaluate investment opportunities, what do these unicorn-entrepreneurs look for? According to the article, Ventilla read two dozen books on education before starting the schools. Wow! 24! And what did Elizabeth Holmes, the founder of Theranos, know about blood? Gates, when asked about his foundation’s investments in education, answered that “progress has been slow, surprisingly slow.” There is nothing surprising about this. When unicorn-entrepreneurs come up with grandiose theories without expertise in the field, is it time for someone to tell these emperors that they are naked? These unicorn-entrepreneurs succeeded because they had the skills to dominate their emerging industries. Emerging technologies and industries of the 21st Century call for new skills. Why don’t we focus on teaching those skills, along with unicorn-entrepreneur execution skills to take off without VC?
Innovation without execution skills makes others wealthy – ask Zuckerberg.
