San Diego’s Innovation Establishment Faces Its Own Innovators’ Dilemma
Can San Diego re-invent itself as a capital of innovation?
San Diego established itself as an innovation hub decades ago—understanding early on the importance of technology clusters in creating a critical mass of self-sustaining innovation. Today it is still renowned as a hotbed for hundreds of life sciences startups (We Are the Wildcatters) and as the home of Qualcomm (NASDAQ: QCOM) the world’s largest wireless chipmaker.
But whatever happened to San Diego’s prowess in software startups as the revolution in Internet software, app development, and software as a service went viral in Silicon Valley and places like New York and Boulder, CO?
The way Brant Cooper tells it, the venerable organizations that are most directly responsible for promoting innovation and entrepreneurship in San Diego are themselves suffering from The Innovator’s Dilemma.
In a provocative blog post, Cooper writes that San Diego’s innovation establishment—the legacy groups like Connect, CommNexus, Tech Coast Angels, San Diego Venture Group, and Software San Diego—are so tied to outdated values and organizational norms that they are failing a key sector of the tech entrepreneurs and innovators they were created to serve. Citing Brad Feld, a prominent tech investor and author of Startup Communities: Building an Entrepreneurial Ecosystem in Your City, Cooper argues that San Diego’s innovation establishment is led by the “old white guys” who just don’t get it. As he puts it:
San Diego is dominated by the old school; by people who were instrumental in diversifying San Diego’s economy 20 years ago, by former C-level executives of large, successful companies, and yes, even by some people who actually started and grew new businesses once upon a time. Great people, I’m sure. Many wish to ‘give back,’ want to see San Diego grow economically, and would like to contribute their expertise.
Unfortunately, the legacy institutions that serve as the vehicles for their contributions are anachronistic, decidedly old-school, and arguably more harmful to San Diego than beneficial.
Cooper quips that his dark secret is that he’s also an old guy. He is 49, “a happy papa,” and co-author (with Patrick Vlaskovits) of The Lean Entrepreneur, a book about the lean startup methodology and how visionary entrepreneurs can use new ventures to innovate, create new products, and disrupt markets. He returned to San Diego (where he grew up) in 2007, after spending 18 years in the Bay Area, where he attended U.C. Davis and worked at a series of tech startups.
After settling in suburban Encinitas, Cooper set out to join the innovation scene in San Diego. He joined Connect, the San Diego Venture Group, and the local chapter of the MIT Enterprise Forum to help mentor entrepreneurs. But he became disillusioned by the caliber of the programs they offered, and by their use of “vanity metrics” (how many startups have graduated or total amount of venture capital raised) instead of evaluating their programs more honestly—and transparently.
The success San Diego achieved in the 1990s spawned multiple nonprofit groups focused on different sectors of innovation. But as the decade wore on, Cooper argues that the local innovation groups began to compete for the limited supply of sponsorship dollars needed to meet their own nonprofit payroll. The sponsors became the customers, and as he puts it, “The entrepreneurs are chased underground, running from endless attempts to monetize them by both the organizations and event sponsors and attendees!”
His disenchantment led him to San Diego Tech Founders, a virtual meetup organization where he has sought to promote the lean startup model and such concepts as viral coefficient, gamification, mobile monetization strategies, and crowdsourcing funding. (At least 220 people have registered to attend a presentation by Brad Feld at a meetup hosted tomorrow evening by the San Diego Tech Founders.)
Cooper’s post, Success and Failure—San Diego Startup Community, has prompted a flurry of responses on his own blog and on San Diego Tech Founders’ Facebook page. The comments include an extended rebuttal from Mark Bowles, a co-founder of San Diego-based EcoATM, who tells Cooper, “You are a much-needed mentor and point of view here in San Diego, but I think collaboration with these existing organization is a better way to accelerate the whole thing.”
If nothing else, he has provoked a worthwhile discussion about San Diego’s startup ecosystem. In the end, though, the question is the same as it was at the beginning: Can San Diego re-invent itself as a capital for innovation?