We’re probably one of the few organizations who is fortunate enough to grapple with the question: what does it mean to be a Super Connector for a region? It’s a role we took on over a year ago because as a small team with limited resources, it makes most sense for us to leverage the power of relationships to drive our mission. Like Malcolm Gladwell’s “Connectors”, we are “people with a special gift for bringing the world together." We focus that gift exclusively on the SoCal region as we did on December 10 when we virtually gathered a diverse group of over 70 leaders for our second annual SoCal Ecosystem Leadership Forum.
Attendees of the professionally facilitated workshop represented communities from all over the region and a wide array of stakeholder groups (startup support orgs, corporates, academics, non-profits, governments, and investors) and industries. The common thread is that all have a vested interest in nurturing and supporting the startup ecosystem in SoCal and collectively tackling shared opportunities and challenges that impact our communities.
This year’s Leadership Forum focused on the themes of managing disruption and reframing it as an opportunity to innovate. 2020 was a challenging year that tested our collective agility, resilience, and optimism but overall, it appears we’ve become a stronger ecosystem and community as a result. For example, only 15% of the organizations attending the leadership forum reported they have been negatively impacted by the pandemic with most (62%) choosing “successful (but nervous)” on the pre-event survey. However, the pandemic has brought on unique challenges such as overcoming zoom fatigue (54%) and managing remote teams (35%). Overall, we heard that being disconnected from stakeholders, teams, and investors has put an immense strain on the important work of supporting entrepreneurship and actively promoting diversity within our communities.
The program featured a series of conversations of which a few snippets are included below. The first conversation with startup thought leader Brad Feld mostly focused on how startup communities are being impacted by the current pandemic and resulting crises. The second conversation provided actionable best practices for improving Diversity, Equity, and Inclusion in the region and was led by representatives from PledgeLA and its member organizations. Our lunch sponsor Mach49 presented how they help corporates disrupt themselves from the inside out with venturing strategies. After lunch we concluded the day with a discussion about activating SoCal’s brand through a regional campaign we’re launching early this year.
Conversation 1: Startup Communities with Brad Feld
Brad Feld helped us look deeply at the dynamics that drive our community and then extrapolated forward into the near and distant future. Here are some highlights:
- The pandemic has accelerated by five years many things that were already in motion -- some good (more flexible work from home arrangements) and some not as good (polarization around dealing with systemic racial inequality).
- As explained in his most recent book “The Startup Community Way”, a startup community is a ‘complex adaptive system’ where a multitude of inputs and outputs interact with unpredictable non-linear outcomes; we cannot control how a startup community evolves any more than we can force a child to be a specified type of adult.
- There’s much less pressure in general to be in Silicon Valley (or any big city) to be successful due to the democratization of entrepreneurship. Now even Silicon Valley people are working in far flung places and this trend will continue.
- Brad advises his companies to reduce or eliminate leased office space and encourages more flexible adoption of work from home for all roles.
- Work from home and distributed workforce “does not eliminate any of the dynamics of startup communities” because most vibrant communities are the ones “that have a lot of inputs from other places and outputs to other places”. If you have lots of movement in and out of your community that’s the best; stagnation in either direction (too much in or too much out) is not healthy.
- The idea of competition between communities is flawed. Better to continuously invest in your own ecosystem to get the benefits of it -- some of which are non-linear benefits that are hard to measure -- instead of looking at it as a win/lose game vs other communities.
- Parting words from Brad: “Use this very strange, and uncomfortable, and unique time to give yourself some space to re-evaluate what’s really important to you in whatever context is interesting. Take advantage of the dislocation versus resisting it and use that to motivate what’s going to happen next in your life.”
Conversation 2: Diversity Best Practices with PledgeLA
Discussion led by Calvin Selth (Annenberg Foundation), Jasson Crockett (City of LA) & PledgeLA representatives.
- The idea for PledgeLA (https://pledgela.org/about/) began nearly 10 years ago when a few SoCal investors approached the Annenberg Foundation about the lack of diversity in Silicon Valley and the desire to not replicate that detrimental climate in the LA region. Annenberg brought in the office of LA Mayor Eric Garcetti who saw alignment with the values and goals.
- The PledgeLA program has evolved into a voluntary pledge and survey taken by VCs and tech companies to track diversity and inclusion in the recruitment, retention, and advancement in their workforce, and for VCs specifically to track diversity within their investment portfolio.
- The definition of diversity goes beyond the ethnicity and gender of the founders but also includes socio-economic background, nationality, LGBTQ, and other often overlooked factors.
- A key element from day one was to include the tech and VC community in the creation of the survey process and metrics to maximize buy-in and transparency.
- Measurements are done year-over-year to identify regional trends and progress. They brought in a third-party to administer the survey and collect the data.
- Three key best practices for improving DEI at the organization level:
- Measurement: having the data to understand the staff, portfolio, and metrics over time. You can have staff surveys or collect it via Applicant Tracking Systems. The key is to agree on a set of target metrics and set up a mechanism to collect the data and review it at regular intervals.
- Leadership: a lot of orgs appoint a head of diversity but often that person is then siloed or isolated. While it’s good to have someone responsible, it requires broad buy-in and active leadership from the CEO on down to have those conversations and agree on a course of action.
- Relationships: the networks and relationships that VC and tech companies use to source talent and portfolio deal flow. Sometimes these networks make the difference in getting access to diverse candidates.
Breakout Group Leaders and Topics:
Carmen Palafox (2045 Fund) - Improving Diversity of Funders: Putting SoCal on the map for Women and Minority Led Funds (Measurement)
- Improving diversity of funders/investors has a big impact on the diversity of the founders receiving investment -- women VCs are more likely to invest in women founders, for example. Currently less than 5% of funds are led by women and less than 1% are Latina and Black Female GPs.
- Language: reframe to be more of a ‘shared prosperity’ issue vs ‘we need to allocate more money to Latinx and Black funders’.
Anna Barber (M13 / Techstars LA) - Busting the Pipeline Myth: How VCs Source Diverse Founders (Relationships)
- Investors (and anyone who sources Founders) often justify lack of diversity in their portfolios because they aren’t seeing the diversity in the deal flow pipeline; this group discussed ways to identify those sources of diverse candidates including changing your network management systems.
- Reframe the question of pipeline problem so it feels more amenable to solutions: maybe it’s not a pipeline problem but could it be a connectivity or mindset problem? That may allow for different approaches that address the problem in a different way.
- The sticky part is getting investors, LPs and all those up and down the chain to move beyond accepting they “should” (social pressure, etc) vs believing in the business benefit of investing in diverse founders and the evidence that returns are going to be better.
Jasson Crockett (City of LA) - How Local Government Can Play a Role (Leadership)
- What can local government do to support the private sector; where it can lead and where it can follow.
- Governments can intervene by convening people, marshaling capital or sourcing talent and finding ideas that can span across more than one of those areas.
- Opportunity Zones have been an underutilized tool for driving more inclusive economic development.
Miki Reynolds (Grid110) - How to Help Diverse Founders Thrive (Relationships)
- How do we enable founders to retain what makes them unique or diverse as they are pushed to be part of a ‘machine’ that requires them to go down a very homogeneous path and that rewards conformity to some ideals not aligned with what fits a mark of success for most companies.
- How do we educate founders…
- to identify the variety of funding sources that may be right for the type of company they’re trying to build;
- to demystify the types of opportunities that are available to them;
- to access the community and resources that are available to support them so they believe they can do it and it’s possible.
- to identify as entrepreneurs and to be part of that community.
Amir Ganaba (BCG)- RENEW’s Effort to Measure Racial Equity in the Private Sector (Leadership/Measurement)
- Discussed challenges faced by companies of all sizes in addressing DEI in a meaningful way not just for their employees but for the communities they operate in and to use their position in the community to be a public advocate.
- Getting companies to voluntarily expose where they’re at is difficult however it’s no longer an HR issue but a business issue -- it has to be part of the strategic plan with real dollars committed to making progress and internal business leaders aligned.
- Things get done when it gets linked back to business outcomes so they’ve showcased studies and examples where there is a positive impact.
- More info about RENEW: https://www.lamayor.org/RENEW
Calvin Selth (Annenberg Foundation) - Survey Says: PledgeLA’s Unique Approach to Data (Measurement)
- How they collect DEI data across a wide range of companies and organizations;
- How to keep it anonymous for the company and private for the individual.
Lunch presentation by Linda Yates, Founder and CEO Mach49, on "Managing disruption and leading the rebound"
Mach49 is a Growth Incubator for global brands -- they partner with clients to disrupt markets and create new growth opportunities through a strategic mix of incubations, corporate venturing and growth ecosystem creation. To learn more, visit www.mach49.com
- Companies are going out of business faster than before – life expectancy is 15 years now but used to be 75 years just fifty years ago and the trend is accelerating because of the challenges of going digital. VC’s have billions of dollars being deployed to build disruptive businesses. Now is the time for corporates to disrupt themselves and invest in innovation.
- ‘Disrupting inside out’ – how to create an internal incubation capability. 1) Ideation: prioritize internal ideas and/or seek external ideas (e.g. venture competitions); 2) Incubate: 12 weeks to launch a new venture with fundable operating/business plan that has been validated and leadership buy-in achieved. 3) Accelerate: build the business. Alternative to “build” is to buy, partner, invest, therefore it is important to be connected to the ecosystem in order to identify potential partnerships, investments, acquisitions, etc.
- Three reasons to do corporate venturing: 1) Optimize current business by leveraging speed, agility and innovation of startups, 2) Access adjacent and new markets using a portfolio approach by placing series of small bets 3) Create a channel to stay current on emerging trends
- Three models of Corporate Venturing: 1) Design, launch, and manage CVC fund, 2) Support executive investment committees, 3) partner with and leverage external startups.
Conversation 3: Integrating a regional brand platform with differentiated local and industry narratives
A discussion of the SoCal Innovation Brand work led by Megan Pilla, Chief Content Officer at Bulldog Drummond
- This is the continuation of a process started over two years ago, initially conceived to help the Alliance develop their brand that would encapsulate what is unique and compelling about the Southern California innovation ecosystem.
- To achieve what we want as a region, we need the right story to tell to the world.
- The current work is focused on translating the foundational SoCal Brand into a consistent story that the entire Region can tell by developing a common Tool Box from which every participant can pull as they become advocates.
- The Tool Box will be used by the leaders (and everyone) in the ecosystem to better amplify the message and weave it organically into their own marketing and brand. It is not intended to replace or homogenize the brand and diversity of the region’s vibrant innovation assets and communities.
- Our guiding principles for the brand and what the region is known for:
- Talk about the power we have to change the world
- Make convergence our superpower
- Be the most diverse center of innovation in the world
- Put a focus on specialties
- Leverage our history (and legacy of innovation)
- Tell individuals’ stories that connect
- Communicate the progress that we’re making
- The brand will focus on the collisions of ideas and people -- a place characterized by a confluence of inputs rather than a specific focus or listing of specific numbers of things. What the volume of collision points and ideas allows the region to achieve.
- The messaging: there are individual industries that are growing and innovating that collaborate and collide within a variety of locations that produce innovation that wouldn’t be possible anywhere else because they don’t have those conditions.
- This is intended to be, in part, a unified counter-narrative to misconceptions from those outside the region, and to help make sense of why we’re compelling as a region to do business.
- The Tool Box we’re building will include specific messaging and examples to address innovators and the VC community as well as provide space for users of the Tool Box to give examples from their region and list their assets within the framework of the SoCal culture narrative.
- It’s more powerful when the direct stakeholders within the community are using the tools versus top down from the Alliance or other orgs that don’t directly represent the communities.
- Part of the challenge is we all know what SoCal means but outsiders don’t. Difficult to describe LA, OC and SD as a single thing. The key to successful messaging is coming up with a common language and meanings.
Leadership Forum Conclusion
The disruption and upheaval experienced this year due to the cascade of complex systems in crisis has also presented immense opportunities for growth and shared prosperity for all.
Brad Feld encouraged us to sit in our current discomfort, learn from it, and come out the other side with a stronger, clearer path not encumbered by past concepts that may no longer serve our organizations and communities.
One of the critical paths for the region is to take a visible and active leadership position in addressing inequities in our ecosystem – what was working before actually wasn’t working for a lot of people who have now been heard and must be addressed with solutions. The superpower of our region is our inherent diversity in all of it’s facets and forms, voices and vocations. PledgeLA is a great example of a pragmatic framework with massive potential to make our tech ecosystem more valuable and equitable.
The SoCal innovation brand work being done by the Alliance on behalf of the region’s leadership will further articulate the ‘special sauce’ of our region and provide a shared set of tools and common language to help clarify and amplify why SoCal drives innovation like no other region in the world. Whether you are a corporation looking to stay one step ahead by disrupting yourself or an organization that has found unanticipated success from a pivot forced upon them or an investor sifting through a firehose of potential unicorns, it is clear that this is a crucial inflection point that should not be wasted.#AllianceBlog