Jan 2, 2019 · 34m · a16z
a16z Podcast | How Innovation Ecosystems Grow Around the Globe
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In this episode of the a16z Podcast, industry experts Annalise Saxenian, Brad Feld, and Chris Schroeder explore how tech innovation ecosystems form globally. They analyze why top-down government efforts to recreate Silicon Valley fail, emphasizing instead the power of bottom-up entrepreneurial networks, localized problem-solving, and global talent mobility.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
The host as informed peer 2.1 Guest teaching 2.9 Guest disagreement 1.8 The host pushing back 1.1
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:37 Brad rejects idealization of US governance
Brad humorously embraces the host's charge of naivete while directly rejecting the premise that American democracy is well-organized, pointing out how laws struggle to keep pace with innovation.
Hardest push from the host ▶ 17:59 Host calls out theoretical view of governmentThe host explicitly challenges the panel's perspective as naive, bringing up real-world friction like bribery, corruption, and arbitrary asset seizure in developing markets.
Biggest teaching moment ▶ 14:51 Brad dismantles top-down innovation mythBrad directly reframes the host's premise by explaining that top-down government efforts in the absence of bottom-up networks inevitably fail and cause economic stagnation.
The host holds their own ▶ 20:29 Host connects founder psychology to global contextsThe host showcases deep preparation by linking Chris's field conversations with Iranian students directly to Brad's published work on founder mental health and taboo topics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| Open Boundaries, Local Information Flow, and Replicating Silicon Valley | 0 | 2 | 1 | 0 | The host is silent throughout this segment as guests detail boundary opening and local network dynamics. Because there is no host speech, host-side metrics are 0. | |
| Regional Assets, Historical Context, and Long-Term Community Growth | 1 | 2 | 1 | 0 | Host asks a brief conversational question about non-natural regional assets. Brad and Annalise respond collaboratively, explaining historical context and long-term city development. | |
| Case Study: Emerging Markets, Sanctions, and Tech in Iran | 2 | 3 | 1 | 0 | Host sets up an inquiry on Iran using recent news on sanctions lifting. Guests educate the room on VPN usage, app stores, and diaspora dynamics in emerging markets. | |
| Imitation and Improvisation as Drivers of Innovation | 2 | 3 | 1 | 0 | Host frames the prompt using Annalise's research and Chris's concept of improvisation. Guests outline how imitation and local adaptation drive entrepreneurial flywheels. | |
| Bottom-Up Networks vs. Top-Down Government Control | 2 | 4 | 4 | 2 | Host raises whether rule of law requires top-down government intervention. Brad explicitly challenges the assumption, explaining that top-down control without bottom-up networks leads to stagnation. | |
| Legal Frameworks, Governance, and Adapting to Rapid Innovation | 3 | 4 | 4 | 5 | Host pushes back on idealizing government roles, citing developing world corruption and asset seizure. Brad counters by rejecting the premise that Western systems are smoothly organized. | |
| Cultural Mindsets, Founder Mental Health, and Global Entrepreneurial Culture | 4 | 2 | 1 | 1 | Host demonstrates strong guest research by referencing Chris's discussions with Iranian students and Brad's writings on founder mental health. Guests elaborate on shared global founder mentalities. | |
| Local Advantage vs. Global Scale in Tech Competition | 3 | 3 | 1 | 1 | Host introduces concrete examples like Amazon vs Flipkart and local eBay clones competing against global incumbents. Guests detail value chain complexities that preserve local advantages. |
Statements from this episode (21)
Saxenian: Top-down Silicon Valley clones fail due to isolated institutions
“Most places that have tried to create the next Silicon Valley have not succeeded largely because they focus on specific institutions in isolation without understanding that one of the most important dynamics is the opening of boundaries Between firms and finan…”
Schroeder: Iranian youth widely use American social networks and edtech platforms
“When I was in Iran a month ago, all the young people wanted to show me on their smart devices, not only how they were all on our social networks, which allows them to see each other as well as to see other parts of the world, all of them had access to Coursera…”
Feld: Replicating Silicon Valley is the wrong goal for other cities
“The notion of trying to create the next Silicon Valley is, is completely the wrong question. And it's a wrong question for lots of reasons. But most importantly, each different geographic region, any city in the world, has different natural resources.”
Feld: Every city on Earth originally formed as a startup
“Every single city on the planet was once a start-up.”
Saxenian: Israel's tech ecosystem was built on decades of military funding
“In Israel, they've been able to tap a lot of the military technology that has been funded for decades.”
Saxenian: India's tech industry bootstrapped from low-end IT outsourcing
“In India entrepreneurs have been able to sort of bootstrap from low end body shopping, sort of software programming into larger scale software development.”
Schroeder: Everyone he met in Iran had VPN access despite crackdowns
“Everyone I've met there of all ages have access to VPN. Every mobile phone I looked at had access to all the same things that we have access to.”
Saxenian: Iran's educated workforce and diaspora position its tech ecosystem well
“Iran has an incredibly highly educated population. Of course, it has been cut off in all sorts of ways, and there's also a huge, very successful Iranian diaspora, which I suspect will I know in Silicon Valley they've been dying to contribute back, so Iran is v…”
Saxenian: Every innovative tech cluster begins with imitation and improvisation
“Every industrial region, every innovative cluster that we've seen has started, you know, from imitation and improvisation.”
Feld: Top-down government efforts without bottom-up entrepreneurship produce stagnation
“When you have top-down in the absence of bottom-up entrepreneur, you know, entrepreneur-led phenomena, grassroots, whatever phrase you want to use, nothing really happens. You get this stagnation.”
Feld: Governments and universities must participate in startup networks, not control them
“Often, and especially, you know, in different parts of the economic cycle, you have top-down focus, and you have government start to try to organize what's going on in the startup community, or you have academia or university in the city try to become the cent…”
Saxenian: Public sector must support entrepreneurs as co-equals, not top-down planners
“I think that the ideal role for a public sector or even for a university or other institution in a region that's trying to be innovative is to talk to the people who are innovating and say, what's, what are the obstacles and what can we do to help support you?…”
Feld: American democracy is resilient because it is not well-structured
“I actually don't think that for example, an American democracy is a particularly well-organized or well-structured phenomenon. I think part of the reason it's so resilient is that it's not”
Feld: A 1990s Chinese deal effectively stripped away his company's ownership
“I've been on the receiving end, for example, of you know, deals that I did in the late nineties. You know, I'm thinking of one in particular with a Chinese company where, you know, the merger agreement came back entirely in Chinese. We really had no choice but…”
Feld: US tech companies struggle because laws lag behind innovation
“There's many, many companies that are struggling with this in lots of places in the U.S. Right now because the laws don't keep up with innovation.”
Schroeder: Global startup culture has become a permanent shared language
“People, they come at problems the same way, they're undaunted in the same way, they're constantly looking for the next new idea in the same way, ah, they support each other in the same way, they think about culture in very similar ways, ah, it really is a ling…”
Saxenian: Local tech imitators gain an edge by tailoring to regional needs
“Often what you see, and you see this in China and other places, is that the local imitators who get a first start actually innovate in directions that are more appropriate for the local constituency.”
Schroeder: Global social platforms dominate worldwide, but e-commerce requires local adaptations
“The LinkedIn of India is LinkedIn. The Facebook of India is fundamentally Facebook. The Twitter of India is fundamentally LinkedIn. This is not true in e-commerce.”
Feld: Complex value chains create stronger local startup advantages
“It's, the more complex the value chain is between the end customer and the supplier of the product or the manufacture of the product. And the more complex that is, the bigger the local advantage.”
Schroeder: Current tech talent is the most geographically mobile in history
“This is the most mobile generation in history. And when I say mobile in this case, I don't mean phones or smart devices. I mean, they will move to where talent is.”
Schroeder: Silicon Valley thrives primarily on talent network effects
“One of the things that we didn't quite touch on about Silicon Valley here, and it's odd to me that people often don't focus about it, which is just simply the network effect of talent that's there, that the more better, the more the excellent people are there,…”