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Branching Out: A New School of Thought on Innovation

Donna Harris

Cofounder & Co-CEO, 1776

Have you ever met a startup? I ask that question whenever I give a talk in front of a large group, as I did last week at the MedStar Institute for Innovation forum, and typically, only a few hands go up.

The reality is that every single one of us has met a startup. For instance, entrepreneur Henry Ford founded a startup in 1903 with $28,000 in cash. Today, his Ford Motor Company is ninth on the Fortune 500 list and brings in $145 billion in revenue. Walmart started in 1962 when entrepreneur Sam Walton opened a single store in Rogers, AR. Just 50 years later, Walton’s startup tops the Fortune 500 list at nearly $500 billion in revenue worldwide. Not to mention Facebook, Levi Strauss, Starbucks, Amazon, Marriott…

Startups that have managed to scale riddle our everyday lives. Yet, when we think of what a startup looks like, we usually think of techies — likely scruffy guys in California wearing t-shirts and shorts — coding away to build the next mobile app.

In fact, having a conversation about startups without the words “Silicon Valley” being uttered is nearly impossible. Since the 1940’s, Silicon Valley has been the de facto global epicenter for high-growth startups. In 2006, the Valley area was at its peak and represented nearly one-third of all venture capital invested globally. Today, 27 percent of all invested capital goes to Valley-based companies. The generally accepted norm has long been that entrepreneurs must head to Silicon Valley to successfully build their companies.

While the Silicon Valley mentality still rings true,  it’s less true today than it was yesterday, and it will be far less true in the years to come. Since the turn of the last century, three things have laid the foundation to irrevocably change the innovation landscape.

First: The Cloud. Beginning in the early 2000s, after the bubble burst, there was a technological sea of change. Companies that used to need to buy hardware and software and pay for expensive rack space and hosting services now could simply subscribe to the services they needed and store all information in the cloud. For startups, the shift to cloud computing eliminated literally millions of dollars of hardware and hosting costs. Entrepreneurs can now launch new companies from anywhere at a fraction of the pre-bubble costs. What used to require a major infusion of venture capital now only requires a bit of local seed money.

Second: Social Collaboration. In 2004, Facebook launched, and Twitter followed in 2006. The two gave rise to open social collaboration platforms, creating peer-to-peer models that directly connect the sources of content (or products) to the consumer (or customers).

Third: Mobile. In 2007, the iPhone came to market, and the App Store came online in 2008. Today, over 1.7 billion people own smartphones and carry the entire Internet around in their pockets — and they have millions of apps that they can download at the touch of a button.

You can see the impacts of social collaboration and mobile powerfully in industries such as media, where content producers can now connect directly with their audiences, completely upending the traditional models of news, music, books, and retail. Or in manufacturing, where platforms like Etsy help creators monetize their services without having to go through the usual channels or middlemen. And in services such as travel, hotels, and taxis, companies like Uber are disrupting long-held industry models.

Such success stories embolden entrepreneurs to begin looking at every single industry through new eyes. Beyond tackling consumer conveniences, entrepreneurs are asking, “What more can the digital revolution do?”

We live in a world where over 3 billion people live on less than $2.50 a day. Where over 250 million of the world’s 650 million school-aged kids are unable to read, write, or calculate basic mathematics. Where 780 million people lack access to clean water, and 3.4 million die every year from water-related diseases. People are asking themselves, “Isn’t there more to the digital revolution than Instagram and Pinterest?”

The good news is that people everywhere now see entrepreneurship as a way to help and change the world for the better. Startups like Silverside Detectors in Boston, She Fighter in Jordan, and Local Roots Farms in Washington, D.C. are all working to solve the world’s toughest and most pressing issues. These entrepreneurs see themselves as citizens of the planet and not just citizens of their own countries — and they don’t live in just Silicon Valley.

Rather, these startups are fulfilling the notion that is most vital to successful innovation today: collaboration is the key to global startup success. We must come together to socialize our innovative ideas, mentor budding entrepreneurs wherever they are from, and be driving forces of the revolution we need.

People often associate Silicon Valley with its Redwood forests. Redwoods are tall, strong, and majestic, but the true model to aspire to is actually the Redwood’s neighbor, the Pando tree. The world’s heaviest of living organisms and among the oldest, Pando trees are not separate at all but rather one massive underground root system holding each other up. Innovators, partners, and investors must mimic the Pando’s ingenious root system and work together to impact the world for the better today.

The time has come to retire the mindset that startups can only succeed in Silicon Valley and to build harmonious networks around the world to enable entrepreneurs to work together in solving the biggest, most troubling, and important problems.

Donna Harris

Cofounder & Co-CEO, 1776

Donna is cofounder and co-CEO of 1776, a global incubator and seed fund that works to accelerate innovation to solve complex challenges. Under her leadership 1776 has grown from a…