Day 2 had us traveling the Bay Area to meet with several organizations living the Silicon Valley lifestyle. First up was Google, a place I've visited many times but which always has something new to offer. Part of the "new" this time was a rude tour guide, a software engineer who had obvious disdain for us business students - my favorite quote was "People will a lot of times write code up here on the board... but you guys wouldn't know anything about that." (I suppose his attitude gives validation to my earlier thoughts on MBAs.) But some good insights into Google's innovation-related incentive system came out as well: One important piece is the practice of holding people accountable for goals beyond their control. Suppose you're in a cost center, like development support, but your bonus hinges on a profit center's, like Android's, revenue. What are you going to spend your spare time on? Another piece, of which the managers we talked with were particularly proud, was that employee performance is measured by impact, not effort. In other words, evaluation is based on how many people you get excited about something, not how hard you work. Does that encourage entrepreneurial activity? I'm not convinced on that point, but it certainly encourages a focus of existing entrepreneurial activity on things that matter to lots of people.
Our next stop was Sonicwall, a B2B company that provides top-notch firewall hardware, software, and services to (primarily) small businesses. We met with members of their executive team to hear about working in a high-growth environment. The key, one of the executives told us, to entering a new market is to not look at what competitors are doing, but to instead imagine you have nothing to do with the market and simply solve the customer's problem. His favorite line of thinking was to imagine how LL Bean would enter the aviation market. I remember hearing something very similar from Aaron Patzer, founder of Mint.com, when he spoke to all Intuit employees shortly after the acquisition of Mint by Intuit. When speaking about the beginnings of the company, Patzer focused on the fact that he completely ignored what Quicken was offering and simply thought through what the average person wanted to see about their finances.
We finished off the day at Plug and Play Tech Center in Sunnyvale, the world's largest business incubator. The tour took us through mazes of cube farms grouped into themes by nationality, alma mater, and sometimes subject matter (like "mobile app development"). The unique decor found in each nook and cranny of the place made me feel that this was a truly creative space fit for entrepreneurs. When our host explained how Plug and Play works, I was surprised to hear that it does not see itself as an incubator - it's a real estate firm. It offers rental office space to entrepreneurs, and the relationship can end at that. Of course, it also invests in some of its patrons (about 1/5 of them) and provides services like mentoring and introductions to VCs, but all of that is a la carte. After the tour we heard from a panel of entrepreneurs housed in Plug and Play itself, who gave us advice on starting and running a business in the Valley. One valuable nugget that came out from the panel was the belief that when you're starting a business, you have to look at your community as if you're on a playground: everybody might as well be your friend, regardless of experience, age, title, and so on. Another nugget: If you're relying on secondary research to start a business, you might as well build nothing and just give up. You must conduct primary research to really understand a new market.
The end of the day brought us a cocktail reception in a Plug and Play cafeteria with dozens of Kelley School of Business alumni in the Valley, and headlined by Art Norins, founder and CEO of Nor1, Plug and Play's largest client at something like 120 employees. Back in October, Art spoke to us in Bloomington about the founding of his company and about networking in the Valley, so it was a bit of a reunion for us. This time he addressed the challenges with rapid growth, as Nor1 has expanded from just 70 employees when we saw him five months ago.
Armed with piles of SWAG from the day (I was particularly fond of my Android keychain flashlight), we boarded the bus for the trek back to Berkeley, where we would close out the conference the next day.
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