NSL Blog

The NEXT Silicon Valley is not a place it's a platform

December 17, 2011

It wont be the banks, and it wont be the VC’s – so WHAT’s NEXT for the funding of innovative and entrepreneurial companies – that small spark which fires nascent, embryonic companies into life? How do we fast track those companies to maturity? As right now faced with the increasing speed it seems of the decay of an old industrial system all countries need more startups.

Part of the solution lies within what has been an emerging trend the evolution of the funding of startup’s via micro-funding, in fact the regulation development in the US, is a clear indicator of the scale and growth of this emerging trend. More importantly micro-funding has been proven to be beneficial in many ways – mitigating risk, but also democratising the power of financial capital. And of course it comes down to power – who has it and who does not. I am not saying “away with the banks or VC’s”, but what I am saying is that there exists other highly viable models, which should become part of the overall  financial eco-system.

Why? Because commerce serves society, society and the people that make society supply the labour and capacity for oganisational fidelity. As we have seen our current system has let us down very badly – so we are faced with a design challenge. If NOT THAT – THEN WHAT?

People learning to get what they need from each other

Grow Venture Community is part of that story and represents an evolution how start-ups are going to be funded in the future. There is a growing recognition of a dysfunctionality within our money supply system, and that applies as much to venture financing as it does to banking. So what’s next is defined by what we want.

And why should that matter to the ordinary man and woman in the street – because, we are faced a real challenge as we decouple from our industrial society – whose going to be making and creating the companies for the future? The answer lies with the innovators and the entrepreneurs (the 99%), not with (as Business Insider argues) with the rich.

HOW to?

GrowVC has asked the following questions, HOW do we create the right conditions to unleash innovation? What if the next silicon valley was not a place but a platform? Who has the right to invest? Who has the right to be an entrepreneur? Where does knowledge reside in what to invest in and what not? What is risk and what is not?

GrowVC came to the view that the Human Operating System we are currently co-creating in which networked communications becomes the connective tissue by which we can re-organise to create  in entirely different ways could equally be applied to investing. The founders believed that everyone could be and should be investing in start-ups. And why not?

Human nature is not like a machine

People embrace what they create, we know that identity, belonging and accountability are forged when we participate in the creation and building of things/stuff/culture. My belief is that the idea of democratising financial capital could offer real long term value for society. Better wealth distribution, an acceleration and increase in the number of companies funded, a different type of engagement with investors and shareholders that could become the checks and balances that our society so desperately needs and a new organisational model which is more inclusive, lighter, sustainable, adaptive. Not unlike the work LEGO has been doing. It too has innovated in how companies are organised, how it motivates and facilitates great thinking, how that is sustainable and how that has social benefits too.

Its what you might call the collaborative enterprise

#Openness is resilience

The default setting  is human, inclusive, participatory, open, representative of – I believe – a new moral economy – and that economy is built upon the principle of Opennness. To expand upon that thought taken from the book: the concept of being open facilitates a new organisational, social and commercial capability. And it plays a key role in helping participatory cultures to function properly, as part of a new operating system where mutuality and the sharing of knowledge, information, data and resources can accelerate innovation and redistribute wealth and provide for a better world. It is inclusive by design, and its by-product is organisational and social cohesion. In designing for a more sustainable world, we must seek mutual gain and mutual benefit.

There is a significant body of evidence that shows us that participatory, open, socially orientated connected platforms – can be built cheaply, operate differently to conventional models of organisation – which can outperform these large siloed incumbents. Just ask Steve Ballmer about the co-creation of shared software.

GrowVC believes an important part of that mission is to make the platform and ecosystem open to all parties to develop services and businesses on top of the technical and legal framework which has been created. GrowVC’s vision is that they want to see 3rd parties able to run successful business by utilizing the GrowVC platform and tools.

To date the Grow Venture Community and micro funding network has grown to over 11,000 entrepreneurs, investors and experts from 200 different countries. Its platforms exist in Chinese, German and Portuguese. Funds of up to $2/3m have been raised.

Grow is running a partner programme in 70 US American campus’s which I suggest we will see evolve rapidly over time.

The power of the network

This networks model enables and supports innovation and entrepreneurship at a global scale. This is in fact the economy of scope – the globally networked society in startup crowdfunding. Combine that with the changing landscape concerning the regulation
of equity in the crowdfunding for startups… and we are midwives to a new and better way of in this instance, the funding of innovation and startup’s.

The network as they say is mightier than the node.

From a No Straight Lines perspective what lessons can we draw?

1. There are truly more viable alternatives to funding.
2. These represent a literacy and design capability that is aware of new legal frameworks, new technologies (allowing the company to run lean), how to design around the needs of humanity as much as the supposed separate needs of business.
3. Could these insights be applied to other organisations? The answer is – yes.

No Straight Lines: breakthrough Innovation programmes: click here for more information No Straight Lines Store.

 

Further reading: [1] The Origin of wealth, [2] The Wealth of Networks, [3] Remix: Making art and commerce thrive in the hybrid economy, [4] Out of Control: The new biology of machines, [5] Crowdsourcing: How the power of the crowd is driving the future of business [6] The Network Society: A cross-cultural perspective