Sunday, 3 September 2017

Review: The Innovation Blindspot

Baird's book is a timely and important one as the startup investing sector has made some high profile mistakes recently.

His contention is this is a pattern recognition problem with VCs. VCs aren't doing enough to encourage genuinely innovative entrepreneurs because they don't meet venture capital's criteria for success like:
  • Being white and male
  • Knowing the right people
  • Living in Silicon Valley
  • Solving problems recognisable to the VC's own lifestyle
and that kind of groupthink is causing them to miss out on the best ideas.

More worryingly, it can also reduce investors' chances of making a successful investment. For example, Baird's Village Capital found that companies with female founders outperform male ones by 20+ per cent in terms of revenue earned and jobs created.

Baird's argument becomes compelling as he describes case study after case study where non-traditional founders, social enterprises and non-Silicon valley startup locations have performed better than the average.

He also offers some excellent tips on how to combat your own pattern recognition biases to focus on impact investing. One, that is relevant for my own work in leading a startup-in-residence programme for a UK charity,  is to recruit makers and entrepreneurs onto your evaluation team. We stumbled upon this combination of including both women and entrepreneurs on our judging panel, but after reading this book I've made sure it is written it into our selection criteria.

I can also imagine making use of the VIRAL framework, and it has inspired a few more ideas on how we can encourage a startup ecosystem which aligns to my non-profit's work.

Verdict: Hugely thought-provoking

If you want to do know more, please visit the book's accompanying website,

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