The Startup Ecosystem

Fred Wilson, of Union Square Ventures in New York, is one of the more prolific Venture Capital bloggers going around. I frequently enjoy his posts on 'A VC', where he covers a range of topics. One that caught my eye recently, was one on Startup Ecosystems.

There has been a lot of talk at the moment around the driving NZ's knowledge economy, in particluar a discussion paper from the New Zealand Institute, and a report on a recent workshop, 'Improving translation of publicly funded research for economic benefit' led by NZ Chief Science Advisor, Sir Peter Gluckman.

In this report, Sir Peter states that we must recognise that the issues we face (there are many - see the report!) are not exclusive to NZ, that other countries have the same ones, no system is perfect, some do it better, some do it worse, but we are a long way behind.

To quote Fred verbatim from his post "Startup Ecosystems Take Time":

"I think it is good to think about decades when you think about the development of new startup hotbeds.

In the first decade, you are largely making it up, copying what works elsewhere, the VCs and entrepreneurs are largely doing it for the first time, and while you can have successes, they are mixed with a lot of failures. That was 1995 to 2005 in New York City and 1965 to 1975 in Silicon Valley.

In the second decade, you start to get it right. The entrepreneurs are doing it for the second or third time. The infrastructure has developed (lawyers, VCs, recruiters). And it is easier to get talented employees to do a startup. This is where we are in New York City now and is where Silicon Valley was from 1975 to 1985.

In the third decade, the ecosystem is fully formed and producing great companies. That is where Silicon Valley has been from the mid 80s on."

According to this analogy, it took Silicon Valley 25 years to mature. If you consider New Zealand has seen declining economic prosperity since the 70's, then that "first decade" has actually been something like four for us! Lets hope 2010 is the year we start getting it right...

The Boy Who Harnessed the Wind

William Kamkwamba is from Malawi. At the age of 14 he was forced to abandon his schooling because his family could no longer afford to pay his tuition after struggling through one of Malawi's worst famines. Not wanting to miss out, William followed his friends school notes, and read from his villages library. After reading a book called "Explaining Physics" where he learnt about electricity, and seeing the dynamo on his fathers friends bicycle, a photograph of a windmill in another book gave William the idea to construct a windmill for his home.

He did this using, wait for it....a broken bicycle frame, a rusted shock absorber for a shaft, a tractor fan for a rotor, ball bearings, and melted down PVC pipes for blades. He rigged it all up on a frame made of gum tree wood, fired it up, and held a glowing light bulb in his hands. Not too bad for a 14-year old boy. Since then he has made a number of improvements, including a car battery to store electricity, a circuit breaker made from nails and speaker magnets, and hand made light switches. He installed lights in all the rooms of his family's home, and has since added a solar panel on the roof. Seeing the benefits this made to his family, he extended his know-how to his whole village, of which every home now has a solar panel and battery for energy storage. The town now has a wind-powered pump for irrigation, and a pump powered well!

His book "The Boy Who Harnessed the Wind" was one of Amazon.com's top science books of 2009, he has spoken at many conferences, including the prestigious TED conference, has started a blog, and has recently returned to school at the African Leadership Academy in Johannesburg where he is studying with the dream of starting his own company to install windmills across Africa.

To gain this knowledge from nothing and to go from building a single windmill, to powering your whole village, to taking the first step towards creating a whole industry in your region is truly remarkable. It shows what can be achieved with some ingenuity and determination. We have that in bucket loads in this country - there is no reason why people, companies, and governments can't do the same here.