Intel's Big Build-Out In My Home State of Ohio Spurs the Growth of a Silicon Heartland

In a game changer, Intel is investing $20 billion on a new chip manufacturing hub on 1,000 acres near Columbus, the first semiconductor fab in the Midwest, and is hiring 3,000 employees. 

The silicon chipmaker's bold investment will draw more high-tech employment to central Ohio and spur the development of a Silicon Valley in the Heartland. Already, Google, Facebook and Amazon operate  data centers here, in this New Albany rural suburb of Ohio's capital city. My hometown of Lancaster, just 30 miles southeast, has attracted Google too.  

These investments come as Silicon Valley continues to decentralize. With this move toward the interior of the U.S., the old images of Rust Belt and cow towns could fade fast.  

The emergence of America's Heartland as a tech center comes at a crucial time for the U.S. as it fights back China's rise, deals with supply chain shortages, and jobs lost to lower-cost centers in Asia and Mexico. 

The arrival of Intel to the Midwest signals another Silicon territory, like Silicon Beach, Silicon Alley and Silicon Dragon. Call this Silicon Heartland.

Over the next decade, Intel plans to spend as much as $100 billion in eight factories spanning 10,000 acres of farmland. The Silicon Valley-based giant also intends to partner with local universities to foster new talent. This build out will spur the growth of an already budding tech ecosystem in central Ohio.   

Heartland America has been eager to develop new jobs, and has looked to technology and startups as sources. Now budding tech centers are gaining momentum, feeding upon the region's strong universities and research centers, and digitization of traditional businesses in insurance, healthcare and manufacturing. 

A growing number of talented millennials have been drawn away from the coasts and into the center of the country. The attraction is increased job opportunities in more inland startups and emerging businesses. Other factors driving this trend are lower cost of living and the ability to work remotely.  

Columbus is in the forefront of Midwestern clusters that are forming far away from long dominant Silicon Valley. CBus, as it's known, is emerging as the biggest of the once-sleepy giants. The population has surged 15 percent to nearly 900,000 over the past decade, the largest increase of any major Midwestern city. 

The metro's tech cluster is fueled by the arrival of venture firm Drive Capital and its Silicon Valley style. Drive Capital, set up by two former Sequoia Capital partners from California, has invested in dozens of tech startups in 10 years, and is building businesses for the future from healthcare to insurance to robotics. Further sparks come from spinouts at Ohio State University, startup studios Rev1 Ventures and Converge Ventures, and inventions at world-leading research outfit Battelle Memorial Institute, creator of vehicle cruise control and the bar code.    

Ohio Governor Mike DeWine -- and other Midwestern states -- have been angling for a chunk of this new distributed Silicon Valley. The Buckeye state has allocated billions to develop urban innovation districts in Columbus as well as Cincinnati and Cleveland. The goal? Create thousands of jobs in high-tech, healthcare and smart manufacturing, and educate students in science and technology fields. Now, this Intel facility is touted as the single, largest investment in the state's history, and boosts Ohio's economy that suffered when the steel mills and auto factories left. 

The San Francisco Bay Area continues to be the epicenter of venture capital, attracting half of VC spending nationwide. But the sands are shifting. Investment in Silicon Valley startups recently declined to below 30 percent nationwide for the first time in 10 years. Meanwhile, venture deals in the Midwest have quadrupled over the past decade. 

Unicorn-valued startups, high-ticket acquisitions, and IPOs have popped up in Columbus as well as tech clusters in Pittsburgh, Indianapolis, and Detroit. Each city leverages its strengths in technology to specialize. For instance, Pittsburgh is a hub for autonomous driving. Indianapolis is strong in software as a service. Detroit is into advanced manufacturing and electric vehicles.  

Over the past 50 years, Silicon Valley saw its orchards transformed into high-tech parks. Now, central Ohio is starting to see its fertile pastures changed to data-driven centers. It will take some time for the culture to change for more of a risk-taking nature that is common in the Valley.  As an early spotter of major tech innovation trends such as in China with Silicon Dragon, I'm convinced that a Silicon Heartland will show its power.  

Endless Frontiers Can Combat China's Tech Rise

 

Twelve years ago, my book Silicon Dragon cautioned that China could win the tech race. Now the U.S. has finally woken up to this threat. The U.S. is moving in the right direction with the largest national increase in science, technology and manufacturing in generations. It's a build back better plan, and with European allies coming aboard, this bold plan counters China's Belt and Road initiative and five-year economic plans. 

China has been gaining on the U.S. for years. State-led blueprints have advanced China as a powerful innovation nation in important world-changing tech sectors. The Chinese have moved from copying innovations in the West to crafting their own inventions. Leading edge technologies for electric vehicles, smart phones, robotics, biotech, finance, retail and more have been adopted very swiftly in China’s digitally savvy market.

Chinese tech titans Baidu, ByteDance, Alibaba and Tencent have emerged as powerful counterweights to Facebook, Amazon, Netflix and Google, which have struggled or been blocked in China.  China’s BAT, as they’re called, have out-innovated the West in many game-changing consumer and business technologies that rely on artificial intelligence. They’ve bulked up internationally too, investing heavily in Southeast Asia and Africa, and previously in America’s Silicon Valleys before a U.S. crackdown on foreign (read China) ownership of sensitive technologies.  Moreover, China has been pumping money into building its semiconductor capabilities. The world’s second-largest economy has its own ambitions for space technology and quantum computing too.  

And as anyone who has traveled to China knows, the country’s modern infrastructure beats our nation’s decaying bridges, highways and airports. There is no Rust Belt in China like our abandoned factories and depleted downtowns in Middle America. China was starting from scratch. No need to rebuild former industrial cities.  Just build for the future is what China has been doing.

Several worrisome indicators point to a shift in power. China surpassed the U.S. in 2019 in the number of patent applications to the World Intellectual Property Organization, and increased that lead in 2020 to a 25 percent share globally, bypassing the U.S. at 21.5 percent.  Moreover, China is catching up to the U.S. lead in global research and development.  The U.S. has a 25 percent share of global R&D spending while the PRC weighs in with 23 percent and growing strongly, according to the National Science Board.  The National Venture Capital Association finds that America’s share of global venture dollars has dropped from 83 percent in 2004 to 51 percent today, with China as the biggest gainer. China’s ByteDance, the maker of TikTok, is the world’s most valued unicorn at $140 billion.

By passing the Endless Frontier Act, the government will fund cutting-edge science to combat China’s increasing challenge to America’s technology prowess. More U.S. technology innovation will be commercialized to retain our global leadership well into the mid-century. The $250 billion bill increases investment in critical scientific and tech fields, funds R&D and manufacturing of key technologies, and creates 10 regional technology hubs.

With this urgently needed funding, the middle of the country could recover from a long downward spiral of lost jobs. A growing number of inland innovation districts stand to prosper. Specialized strongholds such as biotech in Cleveland and robotics in Pittsburgh already have emerged with state funding and local resources such as the Cleveland Clinic and Carnegie Mellon University.

More national funding and venture capital investment is needed to boost our Heartland markets. Two-thirds of startup investing goes to three coastal states (California, New York and Boston). Meanwhile, seven core states of the Rest Belt and Great Lakes capture only about six percent of venture spending nationwide. This gap needs to be closed.

The well-named Endless Frontier Act will send more resources to down-and-out places that need support the most. It will help the USA reclaim its might.  As I pointed out in my pivotal book in 2008, whoever wins the race to the technologies of the future will be the global economic leader.

By Rebecca A. Fannin the author of Silicon Dragon (2008) and Tech Titans of China (2019).

Ask A VC in US-China Tech Cross-currents: Wei Jiang, CatchLight Capital

 

For this 32^nd episode of Ask a VC Anything, our featured guest was CatchLight Capital Partners founding partner, Wei Jiang. In this wide-ranging discussion with Silicon Dragon’s Rebecca Fannin, we covered the early days of Alibaba and Ebay in China, Wei’s insights into the growing tech rift between the U.S. and China, and how CatchLight is in the thick of U.S.-China tech investing.  
See video replay of our April 28, 2021 show. 

 Laying the Ground
Tighter restrictions on foreign investment in the U.S. led to the creation of CatchLight. As a start, the firm absorbed 12 tech startups in the U.S. portfolio of Chinese VC firm ZhenFund, which is no longer actively investing in America.  CatchLight also has raised a fund to invest in emerging technology companies in the U.S., and those Chinese-invested U.S. companies impacted by the regulations.

U.S.-China Cross-currents
CatchLight’s new fund primarily handles secondary transactions, delving into restructuring cap tables for portfolios with Chinese venture investors. This should keep him plenty busy. Wei  noted that the Rhodium Group estimates that close to 3000 U.S. tech startups have Chinese investors, and the technology sector represents the lion’s share of investment in the U.S. from Chinese funds.  

Focal points
CatchLight typically acquires assets in a bundle but also does primary investments. Having raised an initial $30 million fund, Wei is targeting investment in U.S. companies, primarily those that can leverage his social capital and experience in China. He doesn’t expect to invest in China. Wei predicts more restrictions will be coming for Chinese venture investors in the U.S. 

Big Successes and Hot Areas
Wei has one unicorn in his portfolio, and he says two are on the way. One of CatchLight’s stand-out investments is Dandelion Energy, a fast-scaling U.S. home geothermal energy startup that provides heating and cooling as an alternative. Wei drilled deep into what will be the hottest sectors in the coming years: traditional ecommerce as well as newer social, community, and neighborhood ecommerce. Other areas are education, social, mobile payments, and short form videos.

eBay v. Alibaba - 2000’s
When Wei was VP of Category Management at eBay from 2004-2006, eBay was the giant with a hefty amount of capital and Alibaba was small and nimble. Alibaba ultimately won the market, while eBay stumbled. Wei notes that US companies have gained experience in the Chinese market, and pointed to Uber and Airbnb as examples of China launches with fewer errors.

 

Bio: 
Wei is an early-stage venture partner in Silicon Valley. He has built successful startups in both Silicon Valley and China. Wei has held senior executive positions at leading technology companies including Google, eBay, Intuit, and GE.
His venture fund, CatchLight Capital Partners, is focused on cross-border investment opportunities in tech startups. One of its specialties is to restructure companies’ cap tables to avoid compliance issues.
In mid-2019, he founded Momentor Ventures, an early-stage fund helping entrepreneurs from Silicon Valley and beyond, with a focus on cross-border advising and connecting Xooglers and Stanford grads.
Previously, Wei was a venture partner at ZhenFund for three years until the end of 2019. From 2010-2016, he was also a CMO at Google China.
Wei has a BA in Information Systems from Peking University, his MBA from the William E. Simon Graduate School of Business Administration, and his MS in Medical Statics from University of Rochester. 

Contributed by Mike Weiss

Silicon Global Online: Ask A VC: Candice Brackeen, Lightship Capital

 

For this 31^st episode of Ask a VC Anything, our featured guest was Lightship Capital founder and General Partner, Candice Brackeen. In this conversation with Silicon Dragon’s Rebecca Fannin, we covered Lightship’s selection process and successes, why she made her fund so inclusive, and if the rust belt cities can transition to tech. Here's the video replay of the show with Candice.  

 

Selection Process

Lightship Capital has an inbound and an outbound strategy. For the inbound, everybody comes to Lightship Capital, including their website and online show, Twitch Pitch. On the outbound side, Lightship is sourcing deals with co-investment partners. The firm also has accelerators in Detroit, Cincinnati, and Tulsa. Lightship is a seed and Series A fund and is usually looking for companies approaching $100,000 in monthly revenue. Brackeen notes that for industries like AI, that revenue number is less attainable for a seed investment. It is most relevant in sectors like consumer-packaged goods where proving the model is easier.

 

Lightship’s Winners

 Brackeen was proud to talk about some of her winners. She referenced Healthy Roots Dolls, a startup that helps young black girls better love their hair. They recently sold out on Target.com. Then there’s Proov, a progesterone ovulation test, the first urine diagnostic test for women to test for progesterone levels when struggling with fertility. Proov got FDA approval last year. After starting out in only select Target stores, the company is now launching nationwide. Another one of Lightship’s successes is Kare Mobile, a mobile dentistry company. They were just one van when they went through Lightship’s programming in Cincinnati. Kare is now in ten markets around the country and looking to expand. Kare Mobile is doing a pilot in Detroit right now with Ford Motor Company and Delta Dental giving away a $150,000 mobile dentistry van to an up-and-coming dentist in the area! Brackeen’s last example of investment successes is Haute Hijab, America’s only hijab company for modest dressing Muslim women.

 

Diverse Fund

Although Brackeen is a Black VC, she is not only looking for black founders. She notes that although around 85% of the U.S. is not white men, that’s where most of the funding has gone. She feels confident that by focusing on this 85%, she is in a good position. Brackeen is looking to fund women, people of color, and many other historically underserved groups. Brackeen says she believes we will start seeing more women and people of color closing significantly larger and larger funds. She thinks over the next 10-20 years, these diverse funds will be the ones that are innovating and leading the way, and the ones that don’t diversify will get left behind.

 

Problems with Storytelling

One of the biggest problems in the Midwest, according to Brackeen, is with bragging about their successes. She’s convinced that midwestern states can attract talent and investment just like the coasts, but she notes that entrepreneurs from smaller inland cities need to be taught to tell their story effectively and to dream big.

 

Cincinnati, Brackeen’s Silicon Valley

Brackeen grew up in the economically depressed Toledo, Ohio. She describes the wonder of seeing the skyline and professional sports teams of Cincinnati in contrast with her hometown. So for her, on a relative basis, she calls Cincinnati her San Francisco. Brackeen notes that big-time innovation is happening in the city. Look no further than Procter & Gamble, as well as Kroger. Just because these aren’t B2B SaaS companies, doesn’t mean big things aren’t happening. 

 

Bio: 

Candice Brackeen and her husband, Brian Brackeen, run Cincinnati-based Lightship Capital, a rare venture-capital firm managed by black partners. Lightship has just raised a $50 million fund to invest in minority-led founders in the Midwest and has backed eight startups. Brackeen previously ran the Hillman Accelerator, coaching and mentoring founders, and earlier in her career, she founded her own tech startup in the Heartland.  While the venture capital industry is competing to get into hot deals in Silicon Valley, she is convinced that good returns are coming in overlooked businesses outside the mainstream.  Brackeen has a BA in Economics from the University of Cincinnati.

-- Summarized by Silicon Dragon contributor Mike Weiss

Silicon Global Online: Ask Cap'n Hoff About Surviving A Startup

For this 29^th episode of Ask a VC Anything, our featured guest was Founders Space founder and CEO Steve Hoffman (Capt’n Hoff). In this discussion with Silicon Dragon’s Rebecca Fannin, we covered Hoffman’s constantly changing career path, his views on bootstrapping and giving away equity, and how the largely global business at Founders Space has adapted to Covid-19. See Silicon Dragon video of the show with Steve and Rebecca.

What Thrills Capt'n Hoff?

Hoffman has been an angel investor, an LP, serial entrepreneur, game developer, author, and a TV executive before creating Founders Space. He notes, “I’ve had more careers than cats have lives,” but of all of his experiences, he is most passionate about what he’s doing right now. Hoffman is the CEO of Founders Space, a global startup incubator and accelerator with over 50 partners in 22 countries. Before Covid-19, Hoffman was travelling 70% of the time, between countries, and he actually narrowly missed being in Wuhan for a book signing where the original outbreak of Covid-19 happened.

He is an early-stage investor, so companies that he invests in sometimes don’t have revenue, or even users. He puts a large emphasis on the team. Smart people that are open to ideas and exploration will make up a great team. Hoffman is based in Silicon Valley, and Founders Space has five incubators in China.

 

What’s Hot in China

Hoffman mostly invests in software because it’s easier to scale, retain customers, and monetize. Sometimes they’ll invest in hardware with a strong software complement.  Hoffman continues to be impressed by everything eCommerce and social related coming out of China. Citing the growing buying power of the middle class, established companies like Alibaba, TikTok, WeChat (Tencent), and Pinduoduo are on the cutting edge of their respective industries with massive potential for years to come. Hoffman also notes that cleantech is well-backed by the Chinese government. He adds that it might be easier to be a startup in the industry under the new Biden administration than the previous one. Hoffman remains positive on China in almost every tech sector.

 

Still Bullish on Silicon Valley

Positive views about Silicon Valley remaining the gold standard of tech hubs has been waning.  But Hoffman doesn’t see its status at the top of the food chain changing any time soon. “People like to be in proximity to other people with ideas, and money, and with talent. They have an abundance of that in Silicon Valley now.” He does list Austin, Miami, New York, and Boston as up-and-coming tech hubs, each with their own specialties. Hoffman notes, “the reason cities are big is because ambitious people tend to gravitate towards the geographic place where they can maximize their opportunity.”

 Bootstrapping
With the rough estimate that 95% of startups will fail, Hoffman urges entrepreneurs to think twice about taking money from friends or family. Hoffman also warns to take the hints from the market, “if one of these educated angels will not give you money, there’s something wrong with your business”. If you are going to bootstrap, make sure it can be done with a small team of people, and just their time and talent. Although it isn’t the most common, successes like Mailchimp and Salesforce were bootstrapped startups in the beginning. Hoffman also bootstrapped his first startup. 

Equity
Hoffman acknowledges that the way equity in a company is handled differs depending on where you are in the world. For example, in China, it is expected that the CEO and Chairman keep most of the equity. However, in the U.S., there is a much larger percent of equity given to investors and employees. Hoffman feels strongly that, “whatever culture you’re in, you need to reward people in relationship to their expectations, if you want to retain them.” He believes that one employee can be worth, two, three or even five times a mediocre one! If you have someone that you know is that good, pay up to keep them. Sometimes that means giving them equity.

Bio:
Steven Hoffman, or Capt’n Hoff as he's called in Silicon Valley, is the chairman and CEO of Founders Space (FoundersSpace.com), one of the world's leading incubators and accelerators. He’s also an angel investor, limited partner at August Capital, serial entrepreneur, and author of several entrepreneurial books, including his upcoming title, Surviving A Startup.
A former Hollywood TV development executive and founder of two venture-backed gaming and entertainment apps in Silicon Valley, Hoffman went on to launch Founders Space, with the mission to educate and accelerate entrepreneurs. Founders Space has become one of the top startup accelerators in the world, training startup founders and corporate executives in the art of innovation.
Hoffman has a bachelor’s degree in Electrical Computer Engineering from University of California, Santa Barbara as well as a master’s degree in Cinema Television from University of Southern California.

by Silicon Dragon contributor Mike Weiss

Silicon Dragon Global Online: Ask NLVCs Anything!

For this 28^th episode of Ask a VC Anything, our featured guests were VCs Jeffrey Lee and Fiona Yu, both with Northern Light Venture Capital (NLVC).  In a wide-ranging conversation with Silicon Dragon’s Rebecca Fannin, we honed in on NLVC’s investment approach, its successful portfolio companies in China and Korea, and the firm’s focus on healthcare investing, particularly in China. We also covered how Covid is impacting the VC firm’s dealflow. 
See Silicon Dragon channel on YouTube for a replay of the session. 

 

 An Entrepreneur’s VC
“We are super passionate about early-stage, we don’t fear the lack of revenue, we don’t fear the lack of incorporation,” said Lee, during our fireside chat, outlining NLVC’s investment focus. “You really want to be the people behind the stars, the stars are the entrepreneurs,” he added, echoing another plank of the firm’s strategy, shaped initially by NLVC founder Feng Deng. 
As an example, one of the firm’s top deals was China’s group buying superapp Meituan. Founded by CEO Wang Xing, Meituan jumped in as the 3^rd or 4^th player to capitalize on China’s group-buying craze. It was a fourth startup for Xing, who was known as the cloner of other Internet business ideas.
Lee chronicles that at times, NLVC didn’t know if Meituan would make it to their next stage. But today, in a sign of what’s possible in China tech and venture, Meituan is a public company trading for more than $250 billion.
Background on Meituan and its founder can be found in Rebecca Fannin’s book, Tech Titans of China.  

 

Hot Healthcare In China
Seeing exciting trends in China healthcare, NLVC began enhancing its healthcare investment in the sector five years ago. One-third of the firm’s portfolio deals are in healthcare. Across the firm’s 30 medtech portfolio companies, only 20 percent have FDA approval. To partner Yu based in Shanghai, this signals that investors in China are up to taking more risk on early-stage healthcare investments. While the firm typically avoids deals that involve such controversial issues as personal data collection and genomics, the NLVC partners both view the China/Hong Kong healthcare market, and overall economies, as stronger than that of the U.S. right now.

 

Post 90s Deals
The firm is keen on investments in deals positioned for the “Post 90s,” referring to an urban generation born between 1990 and 1999. In a rundown of post 90s online shopping leaders in China, Yu noted: Alibaba is still the biggest engine to buy things, JD is the biggest for grocery, while Kuaishou, a Chinese equivalent to TikTok, offers a buying option on a social media platform.

Korea Tech
The VC firm’s Korean portfolio company Picky is an example of a post 90s generation play. Jumping on the mega-trend of K-Beauty, Picky is a mobile-first content platform providing customers with authentic information in the $250 billion global beauty space.
To capitalize on the growing opportunity in Korean tech, the firm is looking to raise a Korea-specific fund. 

 

Groundbreaker Female VC
Yu is NLVC’s first female investment partner. She has overseen 16 deals over the past seven years, stemming from her start as an intern, to an associate, all the way to her newly minted partner title. Although China is regarded as having more female VC’s on average than the U.S., Yu is aware of the impact she can make on the industry, particularly considering her expertise in healthcare investing in China.

 

Dealflow: In Person Meetings Still Count
With the adoption of Zoom, Lee points out that it’s now easier for the firm to get initial and follow-on meetings from referrals. Yu remarks that China entrepreneurs and VC’s have had to get extra comfortable conducting business over WeChat and Zoom, but she notes that China’s quicker response to Covid-19 leaves open the possibility for in-person meetings. She believes that face-to-face meetings cannot be completely replaced with Zoom calls.

The pandemic caused several portfolio companies to pivot. An example within NLVC’s portfolio is Coyote, which is focused on breakthrough innovations in molecular diagnostics that brings complex clinical testing directly to the patient. Coyote created 30-minute point-of-contact Covid-19 tests with equipment the size of a carry-on bag. The tests were accessible at airports, hotels, and other public places to quickly test large numbers of people.

 

Bios:

Jeffrey Lee has been involved in technology venture capital and entrepreneurship for 20 years with a primary focus on North Asia. He is a Managing Director at Northern Light Venture Capital, an early-stage technology fund focusing on opportunities in China, which he co-founded in 2005 with Feng Dent. At NLVC, Jeffrey chairs the investment committee and oversees strategic planning, investor relations, and value-add activities for the portfolio.
Previously, Jeffrey worked in strategic and product marketing at Agilent Technologies Wireless Semiconductor Division, the predecessor of Broadcom Limited (NASDAQ: AVGO), working on front-end RF components for high-speed wireless networks. This opportunity stemmed from running business development at Wavics Inc., a venture-backed startup developing advanced GaAs wireless components that was acquired by Agilent.
Earlier in his career, Jeff co-founded an early-stage venture fund focused on South Korea, Newton Technology Partners. Jeff began his career in TMT corporate advisory at Salomon Smith Barney and Jardine Fleming, a Hong Kong-UK based merchant bank.
Jeffrey received an AB in economics from Harvard University and an MBA from the Wharton School of the University of Pennsylvania.

Fiona Yu joined Northern Light Venture Capital in 2014, bringing her 10-plus years of experience and understanding of the healthcare industry, as well as strategic consulting skill set to the firm. Prior to NLVC, Fiona worked for Johnson & Johnson for more than seven years. She also worked in Monitor Deloitte, serving local and multi-national healthcare companies on strategic consulting.
Fiona holds a BS degree from Beijing University of Aeronautics and Astronautics, and an MBA from Duke University.

Summarized by Silicon Dragon contributor Mike Weiss

Silicon Dragon Global: Ask Tech Titan Brad Smith Anything! Lessons In Leadership

 

For this edition of Ask a Tech Titan Anything, our featured guest was Brad Smith, executive chairman at Intuit and co-founder of The Wing 2 Wing Foundation. Our conversation covered Smith’s leadership principles for success, design thinking, and his view of  the four disruptive technologies of the future.

Key Takeaways: Online conversation with Brad Smith and Rebecca Fannin, host of Silicon Global Online, January 28, 2021.
See video replay here. 

 

Leadership Principles
Smith remarked that he has never written a line of code in his life, but he has been successful as a company leader by setting a grand challenge and creating a space for employees to do their best work. Here’s how Smith defines leadership:

·       Ability Leadership is a learned trait, everyone can be a leader.

·       Inspire is about winning the heart. When people are passionate about their work, they do amazing things for their customers.

·       Others A leader’s orientation is not about themselves but is in service to others in the organization.

·       Shared Objectives Think about the greater good, not just things in a particular area or team.

 

Design Thinking and Experimentation Culture

At Intuit, design thinking is taught to all 11,000 employees through a formula called Design for Delight. On any given day, some 1,800 experiments are going on throughout Intuit.

Design thinking is about learning by doing and eliminating the false notion that you can research your way to a great business, he said, pointing to its basic elements:

·       Deep customer empathy – It’s about direct observation and analyzing data to get underneath the “why?” and to develop a solution for customer problems.

·       Go broad to go narrow – Taken from the Toyota system in Japan, come up with seven completely different ways to solve a problem to eliminate “group think.”

·       Rapid experiments with real customers – Teams develop a hypothesis with a measurable metric, create an experiment that can get to market in 48 hours or less, and then come back with real data to determine if their metric held up or not.

 

Down Time
Smith highlighted an experimentation culture at Intuit. Modeled after Google’s 20% policy, all Intuit employees are given 10% unstructured time to run experiments for new problem-solving ideas. As CEO, Smith funded all winning experiments for 90 days to get them to the next stage of their business.

 

Four Disruptive Technologies
Smith sees four disruptive technologies that will be catalysts for the future. He outlined the skills needed to succeed with these technologies will be in cybersecurity, data privacy, and data stewardship principles.  
            AI (machine learning, knowledge engineering, and natural language processing)
            Biotechnology (pharmaceutical, environmental, agriculture)
            Internet of Things and edge computing
            5G

Digitization for All
You don’t have to be an engineer to be a part of the digital economy. Digitization will shape all companies into becoming technology companies.

Almost Heaven
“Everything I’ve ever been able to achieve is because of you,” Smith remarked in talking about his home state of West Virginia. He also praised his alma mater, Marshall University and its mantra, “We Are Marshall.”  Smith is investing in his home state and in the university to bring about an entrepreneurial culture. 

Eyes on China
Although Intuit isn’t in China as a company, Smith looks to China as a source of inspiration for new ideas. He said China is producing results that cannot be ignored and the U.S. needs to recognize what’s happening and use these learnings to continue to make strides in innovation. A decade ago, in his travels to Asia, Smith would see Silicon Valley ideas being replicated. Now in Asia, especially in China, he sees design thinking being applied to create their own big successes.

5 P’s

Smith crystalized his learnings for leadership success:

Potential  – A manager coaches performance. A leader inspires.

Purpose – A mission or shared goal gets everybody thinking about “looking out the windshield instead of down at the dashboard."

People – Team players are worth more than great players

Playbook – A methodology or playbook is needed so everybody in the organization can be taught it and be expected to apply it daily.

Pay it Forward – Take what you found and leave it better than you found it, whether it’s your company or your community.

  

Bio: 

Brad D. Smith is Intuit's executive chairman and is chairman of Nordstorm's board of directors as well as a board director of SurveyMonkey. Smith led Intuit’s transformation from a North American desktop software company to a global, cloud-based product and platform company. During his 11 years as Intuit’s CEO, he nearly doubled the company’s revenue and increased its stock price more than 500% while Intuit received several awards for best places to work. In 2018, he co-founded The Wing 2 Wing Foundation with his wife, Alys. The organization’s goal is to advance the great equalizers of education and entrepreneurship in underserved regions. Smith received his BA in marketing from Marshall University in 1986, followed by his MA in leadership development from Aquinas College in 1991. He resides in Menlo Park, CA. 

Summary by Silicon Dragon contributor Mike Weiss