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At the age of 81, Dr Bill Miller has spent much of his career inside the ever-evolving success story that is Silicon Valley. He has been Provost and Professor Emeritus at Stanford University, specialising in fields as various as engineering, computer science, international studies, neuroscience and nanotechnology. He has also founded prominent venture funds and personally invested in 27 startup companies, for 12 “successes” (including three “home runs”). No one is more qualified to comment on what is required to create a winning commercial habitat.Silicon Valley is not about technology.
Vacuum tubes, semi-conductors, computers, software, the internet – none of these things started in Silicon Valley. What Silicon Valley is good at is taking ideas, doing some innovation to turn them into products and then turning those products into successful businesses. Silicon Valley has what we often refer to as an excellent habitat – the economic, social and political environment that fosters innovation and entrepreneurship.
Australia’s economic future lies beyond exporting commodities.
Right now, Australia is very fortunate because of the boom in commodities (fed largely from demand from China). But it’s not the kind of prosperity that lasts forever. If you want to participate in real global economic growth, you have to be involved in the high-tech, knowledge-intensive economy.
The world is flat.
Global innovation does not occur in one place anymore. It occurs through networks. Thomas Friedman said that “the world is flat”. The world is not flat, it’s a waffle. It’s a bunch of peaks of excellence at different places that need to be connected through networks for innovation to grow.
Many ingredients are required to create a vibrant technology cluster.
I would not try to start a new, entrepreneurial, high-tech region without having a research institute or university in that region. You need favourable government policies – tax, intellectual property and security laws. You also need a results-oriented meritocracy, where people are rewarded by what they can do, not by who they know. You need a flexible and mobile workforce. If you’re going to start companies, people need to have the willingness and flexibility to move out and work in these new ventures. Self-interest is critical to commercial success.
Risk should be always present, but never prohibitive.
You need a climate that rewards risk-taking and tolerates failure. Most people in Silicon Valley start a couple of companies that fail before they start one that succeeds. It’s OK to fail, just don’t do it too often.
Entrepreneurs make the best VCs.
The VC community needs to understand how to help new companies. At Kleiner Perkins Caufield & Byers, one of the most successful US venture capital companies, each partner has been either a practicing engineer or a practicing scientist in industry. They come from industry, not from financial services, so they know how to help those companies get started. Every startup company is going to run into obstacles and they need that kind of help. A venture capital company that can bring to the investee company wisdom and experience becomes very valuable.
Get the broadest education possible.
When I was doing my PhD, I had a very eclectic professor who encouraged me to take courses outside the physics department. So I took courses in classics, earth science, logic, economics, computing. A US business school did a study on graduates who became entrepreneurs over about 20 years. They discovered that the graduates with the broadest education made the best entrepreneurs. I recommend that people not be too narrow.
You don’t have to be young to be an entrepreneur.
You can be an old entrepreneur – it’s OK. I started a company just a few days before my 78th birthday – it’s now three years old. If you missed your chance when you were young, you still have a chance when you are old. Don’t give up!
This was an edited version of a keynote address and Q&A session Dr Bill Miller delivered to a SlatteryIT luncheon in Melbourne on 14 February, 2007.
Edited by Paul Ryan.
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