Description
With this detailed elucidation in regard to far from silicon valley the entrepreneurial gap in emerging markets.
FAR FROM
SILICON VALLEY:
The Entrepreneurial
Gap in Emerging
Markets
A Lauder Institute Global Knowledge Lab Project
2 3
2 3
Dear Reader,
W
e are a team
whose paths coincided back in 2012 at the University of
Pennsylvania where we began the W
harton/Lauder dual-degree m
aster’s
program
. As part of this program
we were tasked with form
ing groups with
a com
m
on interest on an internationally relevant hot topic. It was a shared
curiosity for what generates thriving innovative and entrepreneurial eco-
system
s that brought us together. It’s been a wonderful journey ever since.
Early on in our discussions it becam
e clear that we could focus on
only a few cities and would need to carefully choose interesting regions
to inform
our understanding. W
e spent days researching the big players
across the globe; som
e cities stood out for having long histories of support-
ing entrepreneurs and investing in innovation. Other cities were hard to
ignore as they were gaining unprecedented m
om
entum
in entrepreneurship
and innovation .
Beijing, Bangalore, Santiago and Nairobi form
ed the com
bination
we were looking for. W
e believe that these four cities illustrate not only how
different regions around the world are approaching entrepreneurship but
also what different stages of the entrepreneurial ecosystem
can look like. W
e
traveled to each, m
et with incredible people, and becam
e all the m
ore passion-
ate about the topic and excited for what the future holds.
As you read this report, please note that unlike cooking or chem
istry,
entrepreneurial and innovative ecosystem
s can’t be created with a recipe or
form
ula; nonetheless, we identified six factors that m
ake an im
portant dif-
ference. These six factors are intended as a guiding fram
ework for thinking
about the creation of an ecosystem
that drives innovation.
W
e hope you find the inform
ation as valuable and enjoyable as we did.
Happy reading,
The Team
Content
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12 22
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4 5
4 5
Melissa C. Blohm
Prior to pursuing her MBA/MA Melissa spent 6 years working
as a Human Capital Consultant. There, she focused on global
implementation of technology and process solutions. Melissa
has a passion for international business challenges and has lived
and worked in Venezuela, the United States, Australia and Peru.
Melissa is in the process of establishing her own business that will
take technology hardware products to Africa. Her interest in being
a part of this project came from her strong belief that innovative
and entrepreneurial thinking in emerging markets is the key to
solving the world’s biggest challenges. Melissa is ?uent in Spanish.
David Cummins
David has always had an interest in venture capital and entre-
preneurship. Prior to Wharton, he was a member of the Draper
Fisher Jurvetson (DFJ) Growth Fund in Silicon Valley. There, he
invested in expansion-stage technology companies in the US and
China, most notably Tesla (Nasdaq: TSLA), AdMob (acquired by
Google for $750 million), and Okbuy (the “Zappos of China”).
He left DFJ to return to his entrepreneurial roots. He co-founded
Enterupt and raised $400,000 from early Skype investor, Tim
Draper. Enterupt built products in the online reputation and travel
marketplace spaces used by thousands of people. David is ?uent
in Mandarin Chinese.
Vinay Narayan
Vinay is passionate about consumer technology. He spent the
summer of 2013 helping scale a global program at eBay in Silicon
Valley. Prior to business school he worked in operational roles
across diverse industries. He has worked in India for a pre-IPO
education start-up, for the mobile marketing team at Nokia and
for the business development team at J&J, where he focused on
growing the ocular medical device category. Vinay is ?uent in
Hindi.
Dalton J. Wright
Prior to Wharton, Dalton was on the founding team of Mexico’s
leading venture capital fund, Alta Ventures Mexico, which raised
$70M to accelerate entrepreneurship in Latin America. He ?rst
gained experience in venture capital in Utah, helping build Kick-
start Seed Fund into the most active seed investor in the region.
Dalton loves entrepreneurship and co-founded a media technol-
ogy company during college which raised angel investment and
was sold to new partners. After graduating from Wharton/Lauder
he will be returning to Utah as a partner in Kickstart Seed Fund III.
Dalton is ?uent in Spanish.
Ye Ella Lu
Design Assistant
Ella has interdisciplinary design experience in graphic, product,
exhibition and architectural design. She has always had a passion
for using design to implement social changes. She has work expe-
rience in the business development department of the Solomon
R. Guggenheim Museum in New York, architecture ofces in
Shanghai, Hong Kong, and the Netherlands.
Xitong (Kacie) Nie
Research Assistant
Kacie is a sophomore at Penn, majoring in Systems Engineering
and Finance. On campus, she is the president of Global China
Connection and the social chair of International Council on
Systems Engineering at Penn. Last summer, she interned at the
investment banking division of a securities ?rm in China where
she worked on M&A deals in healthcare and hospitality. She looks
forward to embarking on a career in ?nance.
Yinyin Wu
During the summer of 2013, Yinyin worked in the account man-
agement group of PIMCO in New York City. Prior to Wharton,
Yinyin spent 5 years working at Credit Suisse, in New York and
San Francisco, where she advised corporates on liability manage-
ment transactions and technology companies on ?nancing and
M&A opportunities. Yinyin developed an interest in technological
innovation during her time living in Silicon Valley and working
with technology companies at varying stages of maturity. Yinyin is
?uent in Mandarin Chinese.
The Team
Professor Regina Abrami
Advisor
• Ph.D. in Political Science, University of California, Berkeley
• Senior Lecturer in Political Science, Senior Fellow in the Man-
agement Department, Wharton School
• Director of the Global Program at the Lauder Institute of Man-
agement and International Studies
• Previous faculty of Harvard Business School
Professor Mauro Guillén
Advisor
• Ph.D. Sociology, Yale University
• Ph.D. Political Economy, University of Oviedo
• Director of the Joseph H. Lauder Institute of Management
Studies at Penn
• Dr. Felix Zandman Endowed Professorship in International
Management at the Wharton School
• Secondary appointment as Professor of Sociology in the
Department of Sociology of the University of Pennsylvania
Executive Summary
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
community
&
culture
government
&
regulation
universities
&
education
funding
&
capital
INCUBATORS
&
ACCELERATORS
high impact
entrepreneurs
i
n
n
o
va
t
i
o
n
6 7
Overview
High-impact entrepreneurship and ecosystems for innovation are important to the ongoing and future
economic development of developed and emerging market economies alike, but what is innovation? For
the purpose of this report, we de?ne innovation as a product, service, or process invention that creates
signi?cant economic value when applied to a market opportunity.
The natural question that follows is: how does a country go about creating an ecosystem for innovation?
Experts, academics, investors, entrepreneurs and industry participants each have unique viewpoints as to
the critical elements required to stimulate and sustain high impact entrepreneurship and thriving innova-
tion ecosystems. We will summarize and highlight some of these viewpoints from global thought leaders
in more detail in this report.
Performance Criteria Factors
Based on our own research, we identi?ed six factor groups that we believe are critical actors that drive the
creation of successful high-impact entrepreneurship and innovation ecosystems. The six factors that we
considered are listed below. Later in this report, we will de?ne each respective group in more detail.
1. High Impact Entrepreneurs
2. Community & Culture
3. Government & Regulation
4. Universities & Education
5. Incubators & Accelerators
6. Funding & Capital Sources
SANTIAGO
N
A
IR
O
B
I
BANGALORE
B
E
IJ
IN
G
de?cient
nascent
evolving
excellent
world class
Culture
&
Community
Government
&
Regulation
University
&
Education
Funding
&
Capital
Incubators
&
Accelerators
High Impact
Entrepreneurs
6 7
Ecosystem Scorecard
In this report, we focus our analysis on four ecosystems that are geographically diverse and are currently at
diferent stages of development. These ecosystems include, Beijing, Bangalore, Santiago and Nairobi. We
traveled to each of these geographies in an efort to gather data, collect information and conduct primary
interviews with entrepreneurs, government ofcials, investors, corporate players and multiple other indus-
try participants. Below is a summary of how each of these respective ecosystems is performing relative to
our six-element checklist. In this report, we provide additional data, insight, performance analysis and our
speci?c suggested areas of improvement for each respective ecosystem.
Going Forward
During the course of our research it became all the more evident that innovative ecosystems are
critical to the creation of thriving and sustainable economic growth. At the same time, the world of
innovation and entrepreneurship is quickly changing. Silicon Valley is a good example of success, but
it is no longer the only model or success story. In trying to create this ecosystem, each country, city
and community must adjust for its own characteristics and idiosyncrasies. Government support, such
as through visa programs, access to permits, IP protection, and contract enforcement are a must, but
without the involvement and commitment from all six factor groups success is unlikely.
Ultimately, the best ecosystems ofer the entrepreneur access to large markets, capital, mentors, cus-
tomers, educated employees, resources, and IP protection. Based on the geographies that we studied,
each comes up short in some respects and room remains for improvement. Those who can build ideas
and businesses quickly while overcoming the challenges that exist will be the ones who succeed.
8
pools of private capital allocated to high-risk, high-re-
turn equity investments in emerging technology
companies. Venture capital has fueled much of the
world's technological advances including
microprocessors, computing, software,
telecommunications, medical devices,
biotech, clean energy, social
networking, big data and more.
Strategic
Buyers
IPO Growth/
Private
Equity
Crowdfunding:
An emerging source of capital
for startups that consists of
aggregated small contributions
from many individuals.
Venture
Capital
Angels Seed Friends,
Family
& Fools
Founder
Liquidity/Exit
Expansion
Development
Start-up
Idea
FUNDING SOURCES
BUSINESS
STAGES
multiple millions
thousands
FINANCIAL
VALUE
Accelerators
funding & Capital
incubators & accelerators
Key Terms and How We De?ne Them
We have provided the following de?nitions and frameworks to establish a common language by
which we may evaluate, compare and discuss entrepreneurial ecosystems around the world. While no
two ecosystems are identical and these de?nitions vary somewhat from region to region, the follow-
ing represents a useful starting point to understand the structure of a “typical” entrepreneurial ecosys-
tem.
pools of private capital allocated to high-risk, high-re-
turn equity investments in emerging technology
companies. Venture capital has fueled much of the
world's technological advances including
microprocessors, computing, software,
telecommunications, medical devices,
biotech, clean energy, social
networking, big data and more.
Strategic
Buyers
IPO Growth/
Private
Equity
Crowdfunding:
An emerging source of capital
for startups that consists of
aggregated small contributions
from many individuals.
Venture
Capital
Angels Seed Friends,
Family
& Fools
Founder
Liquidity/Exit
Expansion
Development
Start-up
Idea
FUNDING SOURCES
BUSINESS
STAGES
multiple millions
thousands
FINANCIAL
VALUE
Accelerators
Given the wide variation that exists between (and even within) ecosystems regarding these terminologies, we have avoided
speci?c ?gures such as investment amounts and company valuations. A venture investment in one market may look more like
a seed round in another. For the purposes of this study we have attempted to normalize the concepts based on the stage of a
company from inception through a liquidity event.
8 9
Time: longer
Money: fee-based
Cohort: rolling basis
Focus: various types & industries
Example: StartX
Incubators
Accelerators
Both ofer:
Time: shorter, condensed
Money: equity-based
Cohort: batches or groups
Focus: high growth, often tech
Example: Y-Combinator
Ofce Space
Mentorship
Early Stage Support Services
Key Terms and How We De?ne Them
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
community
& culture
government
& regulation
universities &
education
funding
& capital
INCUBATORS
& ACCELERATORS
high impact
entrepreneurs
i
n
n
o
va
t
i
o
n
Entities that provide support to very
early-stage companies including office
space, internet access, mentoring,
networking, accounting and legal
services. The primary difference
between an incubator and accelerator
is the business model they pursue;
incubators tend to accept a variety of
startups and charge a monthly fee for
services while accelerators seek only
high-growth potential companies
and share risk by making small
equity-linked invest-
ments.
A multitude of private and public sources by which
entrepreneurs can obtain funding. Angel investors, seed
funds and venture funds allocate capital to high-risk,
high-return equity investments in emerging
companies. In addition to capital, investors offer
relationships, guidance and services to
portfolio companies in an effort to increase
valuations and generate returns through
acquisition or IPO. Successful
venture funds are an indicator
of a healthy entrepre-
neurial ecosystem.
Private and public institutions of higher education that
build networks of skilled people including engineers,
scientists, designers and businesspeople from around
the world. This diversity of talent and experience
enables the cross-pollination of ideas necessary
for innovation. Research universities also
house advanced labs with scholars who
produce breakthrough inventions that
can be commercialized through
technology transfer to
startup companies.
Effective government policy that
reduces barriers to entrepreneur-
ship and encourages innovation,
investment and new venture
formation. Successful ecosystems
tend to have laws that guarantee
property rights, enforce business
contracts, protect intellectual
property and incentivize
investment while avoiding
bureaucratic friction or making
direct investment decisions.
Engaged people building trusted,
informal networks with established
norms that encourage collaboration,
sharing, learning, research, exploration,
risk-taking and entrepreneurship. Culture is the
elusive, intangible element that causes entrepre-
neurial ecosystems to thrive when other necessary
ingredients are present. Visionary entrepreneurs in
the emerging ecosystem are usually the
organizers of the community and
drivers of its culture.
An entire ecosystem built to support
entrepreneurs as they attempt to solve large,
pressing problems through innovative, scalable
technologies and business models. Entrepreneurs in
thriving ecosystems create new industries, disrupt
incumbent enterprises and generate new growth that
results in high-paying jobs for skilled workers, an elevated
standard of living in the region and creative solutions that
advance what is possible in the world.
There is a different type of entrepreneurship often
referred to as “needs-based” entrepreneurship.
This report does not address this
type of entrepreneur-
ship.
What do we mean by innovation?
The study of innovation has produced dozens of defnitions. Sub categories can
include disruptive, breakthrough and incremental innovation as well as prod-
uct, process and business model innovation. For the purpose of this study we
have defned innovation as a product, service or process invention that creates
signifcant economic value when applied to a market opportunity.
We believe there are six factors that drive the creation of
successful innovative and entrepreneurial environments.
8 9
What Some Experts Say...
Paul Graham
Entrepreneur, technolo-
gist, investor, & founder
of Y-Combinator
• The people, not the buildings, make Silicon Valley. A ?rst-rate university in a city where nerds and
investors want to live is the organic way to attract the right kind of people to build an innovation ecosystem.
• Entrepreneurs are hackers. Hackers are makers, not just engineers and scientists. People who break rules are
the source of American’s wealth and power. Determination, ?exibility, imagination, and strong friendship
are the key attributes of entrepreneurs.
• A society in which people can do and say what they want will also tend to be one in which the most
efcient solutions win, rather than those sponsored by the most in?uential people.
• Within the US, there are no technology hubs without frst-rate universities. So if you want to make a Silicon Valley,
the university has to be a magnet, drawing the best people from thousands of miles away.
• Start-up investors tend to have a lot of experience themselves in the technology business. This helps them pick
the right startups, and means they can supply advice and connections as well as money.
• Y-Combinator is a start-up boot-camp that serves as a quality ?lter and provides entrepreneurs with seed
funding, one-on-one mentorship from experienced entrepreneurs, investor introductions, and a high-quality sup-
portive alumni community.
For sources, see bibliography items 33-36.
Daniel Isenberg
Prof. of entrepreneurship at
Harvard, Columbia, and Bab-
son, advisor, investor, author
& entrepreneur
• Leaders are the entrepreneurs who lead the com-
munity, and Feeders are the support system that
are comprised of the government, universities, investors,
mentors, service providers and large companies. The
entrepreneurial community needs grass-roots activities
started by entrepreneurs that bring together the players.
• The main cultural attributes that are essential to Silicon
Valley are - Give before you get, (“pay it forward” cul-
ture.) Everyone is a mentor, so share your knowledge
and give back. Embrace weirdness.
• Entrepreneurs need to be committed to their
region for the long term (20+ years), the community and
its leaders must be inclusive, play a non-zero sum game,
be mentorship-driven and be comfortable experimenting
and failing fast.
• Top-down government driven clusters are not the most
efective. There is a disconnect between entrepre-
neurs and governments, such that entrepreneurs are
self-aware and bottoms up while governments are un-
aware and macro-focused.
• Schools like MIT and Stanford are “outward facing”
research universities that act as community cata-
lysts, a magnet for entrepreneurial talent for the region,
teachers, and a pipeline for talent back into the region.
Their research ofers a continual stream of new
technologies to be commercialized.
• Accelerators (such as Tech Stars) should be men-
tor driven. Entrepreneurs learn best from other entre-
preneurs.
For sources, see bibliography items 56-58.
Brad Feld
Entrepreneur, investor,
author & co-founder of Tech
Stars
10 11
• Governments often focus on reforming “legal, bureaucratic and regulatory frameworks” or on building
expensive technology clusters, however launching ecosystems requires a more holistic approach.
• Public leaders should “stop emulating Silicon Valley” and instead “shape the ecosystem around
local conditions.” The ambition to become another Silicon Valley sets governments up for “frustration and
failure” while they should be focused on their own unique strengths and opportunities.
• Public eforts must “engage the private sector from the start” and have a clear exit strategy as
the ecosystem becomes viable. “Only the private sector has the motivation and perspective to develop
self-sustaining, pro?t-driven markets.”
• Instead of spreading out resources broadly, governments should focus on “growth-oriented entre-
preneurs (not necessarily tech) who address large potential markets.”
• Don’t “?ood high-potential entrepreneurs with easy money” when they need to be tough and
resourceful. There is “scant support that expensive incubator programs contribute commensurately to
entrepreneurship.”
• “Get a big win on the board” and “over-celebrate the success.” This has a “stimulating efect on the
ecosystem by igniting the imagination of the public and inspiring imitators.”
• Although difcult, governments must “tackle cultural change head-on” to “alter social norms about
entrepreneurship.” Shifts can be made in as little as a decade and media eforts can help shape attitudes.
For sources, see bibliography items 41.
• “Silicon Valley’s informal social relationships supports experimentation and cre-
ates a more ?exible regional network-based industrial system that promotes collec-
tive learning, encourages risk taking, embraces failure, and enables information to
spread quickly.”
• “Entrepreneurs are measured by what they are currently doing. The stigma of
failure is depersonalized, so entrepreneurs are free to challenge the status quo,
break with tradition, and innovate in areas where most say it cannot be done.”
• “The US Government channeled resources to universities (e.g. MIT, Stan-
ford) to develop technologies for the Second WW and Cold War. These resources
were the seeds of developing an innovation ecosystem.”
• “Stanford forged a close working relationship between the engineering school
and local technical ?rms. The formation of the Stanford Industrial Park in 1951 pro-
vided a mechanism for transferring technology from university laboratories to
the nearby commercial ?rms.”
• “Venture capital replaced military contracts as the main source of capital.
Many VCs were previously successful entrepreneurs who brought operating experi-
ence, technical expertise, contacts, & capital to Silicon Valley.”
For sources, see bibliography items 54-55.
Annalee Saxenian
Prof. and Dean of the
UC Berkeley School
of Information
10 11
• Governments often focus on reforming “legal, bureaucratic and regulatory frameworks” or on building
expensive technology clusters, however launching ecosystems requires a more holistic approach.
• Public leaders should “stop emulating Silicon Valley” and instead “shape the ecosystem around
local conditions.” The ambition to become another Silicon Valley sets governments up for “frustration and
failure” while they should be focused on their own unique strengths and opportunities.
• Public eforts must “engage the private sector from the start” and have a clear exit strategy as
the ecosystem becomes viable. “Only the private sector has the motivation and perspective to develop
self-sustaining, pro?t-driven markets.”
• Instead of spreading out resources broadly, governments should focus on “growth-oriented entre-
preneurs (not necessarily tech) who address large potential markets.”
• Don’t “?ood high-potential entrepreneurs with easy money” when they need to be tough and
resourceful. There is “scant support that expensive incubator programs contribute commensurately to
entrepreneurship.”
• “Get a big win on the board” and “over-celebrate the success.” This has a “stimulating efect on the
ecosystem by igniting the imagination of the public and inspiring imitators.”
• Although difcult, governments must “tackle cultural change head-on” to “alter social norms about
entrepreneurship.” Shifts can be made in as little as a decade and media eforts can help shape attitudes.
For sources, see bibliography items 41.
Checklist for Creating Entrepreneurial Environments
Culture & Community
An innovation ecosystem that is based on communities and cultures
that encourage risk-taking, embrace failure, promote collective learning,
engage in information sharing, and openly provide mentorship.
High Impact Entrepreneurs
People with pioneering spirits who are willing and able to challenge the
status quo, possess imagination, experiment with seemingly crazy ideas,
and are unafraid of failure are critical for innovation ecosystems.
Government & Regulation
Governments that help cultivate innovation ecosystems by making it
easy to start/close a business, enabling domestic and foreign talent to
?ow freely, being an early customer of young start-ups, and providing
legal infrastructure that promotes IP protection and a fair playing ?eld.
Universities & Education
Universities that attract the best talent globally and develop working re-
lationships with local technology companies that help to commercialize
university R&D. No technology hubs exist without ?rst-rate universities.
Funding & Capital
Investors who are former technology entrepreneurs and operators and
can provide young startups with contacts, advice, technical understand-
ing, and capital. A large number and variety of investors across the
funding continuum is necessary.
Incubators & Accelerators
Incubators and accelerators that serve as quality ?lters, provide young
companies with a small amount of capital and, more importantly, that
provide seasoned mentorship.
Factors Qualities
12
Snapshot of High Impact Entrepreneurship Globally
12 13
brazil
chile
united states
sao paulo
santiago
san francisco
europe
london
south africa
cape town
5
incubators &
accelerators
313.9 million population
1.5%
GDP growth
$50,000
per capita income
$11.2 billion
venture investment
>1,000
active angel investors
20
incubators &
accelerators
254 million internet users
San Francisco
san
tiago
17.5 million population
4.6%
GDP growth
$10-15 million
venture investment
>30 active
angel investors
4
incubators &
accelerators
11 million internet users
$15,000
per capita income
sao paulo
201 million population
2.4%
GDP growth
$11,000
per capita income
>100
active angel investors
4 incubators &
accelerators,
7 coworking spaces
89 million internet users
0.3%
GDP growth
$33,000
per capita income
$1.8 billion venture investment
>60 active
angel investors
17
incubators &
accelerators
504 million internet users
london
49 million population
3%
GDP growth
$7,500
per capita income
$30-35 million
venture investment
20 active angel investors
14 million internet users
591 startups
4465 startups
>300 startups
336 startups
60 startups
739 million population
new york
$1 billion venture investment
Snapshot of High Impact Entrepreneurship Globally
new Delhi
12 13
49 million population
3%
GDP growth
$7,500
per capita income
14 million internet users
cape town
1.4 billion population
7.1%
GDP growth
$6,000
per capita income
$1.5 billion
venture investment
200 active angel
investors
5
incubators &
accelerators
>1000 startups
386 startups
>500 startups
50 startups
568 million internet users
china
israel
india
kenya
beijing
tel aviv
bangalore
nairobi
beijing
shanghai
mumbai
1.2 billion population
3.2%
GDP growth
$1,500
per capita income
> $300 million
venture investment
32 active angel investors
20
private
incubators &
accelerators
152 million internet users
bangalore
43.2 million population
5.7%
GDP growth
$1,000
per capita income
very few
active angel investors
10
incubators &
accelerators
14 million internet users
Cities this report focuses on
Other notable innovative and entrepreneurial cities
For sources of data see bibliography items 37, 38, 39, 40
nairobi
$3-5 million venture investment
7.9 million population
3.6%
GDP growth
$31,000
per capita income
$1 billion venture investment
15 active angel investors
5.8 million internet users
15 incubators &
accelerators,
9 coworking spaces
tel aviv
funding
& capital
INCUBATORS
& ACCELERATORS
i
n
n
o
v
Beijing’s Innovation Ecosystem Forges Ahead
Beijing is the most developed innovation ecosystem out of the four that we analyzed, boast-
ing sufcient available investment capital, a sizeable addressable market, a large pool of
talent, and a supportive government. In order for Beijing’s innovation ecosystem to
continue its development, the ecosystem still needs increased mentorship by experi-
enced entrepreneurs, improved community transparency and information sharing,
more angel investors, closer relationships between universities, R&D, and local
startups, less taboo around failure, and continued education reform.
Approximately 50-60% of the frst generation of
high impact entrepreneurs in China received edu-
cation and/or work experience in Silicon Valley. More
recently, entrepreneurs tend to be born, raised, and edu-
cated in China. Given the intense competitive nature of the
Internet industry, investors seek to invest in entrepreneurs
who have 3-10 years of work experience and domain
expertise, a stark contrast to the US where many
Internet entrepreneurs are university
students or recent graduates.
Beijing’s incubators and accelerators
are fragmented and tend to produce
lower quality companies than their
US counterparts. This is largely driven
by the fact that many incubators and
accelerators lack the relevant collab-
orative communities and experienced
mentorship of Silicon Valley accelera-
tors such as Y-Combinator. As a result,
many incubators and accelerators
tend to attract companies primarily
looking for capital, as opposed to
mentorship and strategic guidance.
China is the 2nd largest venture market in the world at
~20% of the size of the US. $3.7B was invested in 202
deals in 2012 and $6.3B was invested in 362 deals in
2011. The frst 10 years of the VC industry was dom-
inated by Silicon Valley venture funds. Over the past
5-7 years an increasing number of domestic Chi-
nese venture funds have been raised. China only
has about ~300 hundred angel investors,
compared to 30,000 in the US. Most
investment activity occurs in the
mobile, ecommerce, gaming,
content, cloud, and educa-
tion industries.
14 15
“We haven’t funded a single company coming
out of an accelerator due to the low quality.”
–Mickey Du, Innovation Works
2014 2004 1994 1984
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Zhongguancun, “China’s Silicon Valley” is established in Beijing
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up incubator, Innovation Works, is launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
1984 1988 1998 2000 2003
Venture Fund: Innovation Works (IW)
was was founded in 2009 by Dr. Kai-Fu Lee.
Dr. Lee was previously the head of
Google China. IW started as an incubator but evolved into
a venture capital fund. Today, IW has more than $500M in
assets under management and has invested in more than
60 startups. IW provides its entrepreneurs with funding
and value-added services.
Seed Fund: ZhenFund was founded
in 2006 by Xu Xiaoping. Mr. Xu was a
co-founder of New Oriental (NYSE: EDU), China’s largest
education company. Mr. Xu has made over 80 angel
investments before teaming up with Sequoia on ZhenFund
2.0. ZhenFund has made 60 seed investments to date
and plans to invest in 80-100 companies from 2012-2014.
ZhenFund’s average investment size is $300k.
Angel: Lei Jun is one of China’s most
proli?c technology entrepreneurs and
in?uential angel investors. He most
recently founded Xiaomi, a low-cost smartphone provider
valued at more than $10B. Lei Jun has made countless
angel investments in companies such as YY (Nasdaq: YY),
UCWeb and Vancl.
2004
beijing
high impact
entrepreneurs
v
community
&
culture
government
& regulation
universities &
education
-
.
Historically China has
had to wrestle with widespread fear of
failure, a general mistrust of others, lack of
experienced mentors, little market transpar-
ency, limited open collaboration and a lack of
data-driven decision-making processes. The “if you
win, I lose” mentality is still widespread. The above-
mentioned soft elements of an innovation ecosystem
are the critical factors of Silicon Valley’s
success. Beijing’s ecosystem would be
well-served to continue im-
provements in all of
these areas.
The Chinese government has made
efforts to stimulate high-impact en-
trepreneurs for 20 years. These ef-
forts started by building high-tech
parks in Beijing 15 years ago. More
recently, local governments have
started becoming Limited Partners
in venture funds and cooperating
with VCs to invest directly in startups.
Policies aimed at continuing education
reform, enhancing IP protection, and
lowering the costs of starting
businesses will greatly ben-
eft the evolution of
Beijing’s eco-
system.
According to estimates, China produces 70% more engineer-
ing graduates than the U.S., but less than 20% of China’s
engineering graduates are globally employable. China’s top
engineering school, Tsinghua University, does produce
world-class talent and is located close to Zhong-
guancun, China’s Silicon Valley, in Beijing. The
government must strike a delicate balance
between continued education reform and
being equitable to all. Easier university
technology commercialization and
closer relationships with local
startups would be a step in
the right direction.
Yanhong “Robin” Li was born in China and educated at the
University at Bufalo. He previously worked at Infoseek in Sili-
con Valley. Robin co-founded Baidu (the “Google of China”) in
2000. Today Baidu has a market capitalization of $56B. Robin
is one of the richest people in China with a net worth
of $6.9B.
Yun “Jack” Ma was born in China. Jack founded Alibaba Group
in 1999, which includes Taobao (the “eBay of China”) and Alipay
(the “PayPal of China”). Taobao controls 80% of the ecommerce
market in China. Taobao is estimated to be worth $100B and is
expected to IPO in 2014. Jack Ma has a net worth of $3.4B.
Huateng “Pony” Ma was born and educated in China. In 1998, Pony co-found-
ed Tencent, China’s largest gaming, social networking, and communications
site. Tencent has a market capitalization of $100B, making it more valuable
than McDonalds. Pony is the 4th richest person in China with a net worth
of $6.8B.
Tencent is China’s largest online
media and entertainment company
Taobao is an ecommerce juggernaut Baidu dominates Chinese search
14 15
2014 2004 1994 1984
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Zhongguancun, “China’s Silicon Valley” is established in Beijing
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up incubator, Innovation Works, is launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
2004 2005 2009 2010 2013 2014
“In Silicon Valley, failure is accepted as part of the learning
process for an entrepreneur. In China, failure is viewed more
as a stigma, but this is slowly changing for the better.”
–David Lin, Microsoft Accelerator
“There is too little knowledge dissemination to date in China.
We hope this changes, but it will take time.”
–Chinese VC
“The key to working with the government is to develop the
relationship and trust…and not to lose their money.”
–Chinese VC
“Conventional Chinese education has a disproportionate focus on
‘what’s the right answer’ and not enough attention is paid to ‘how do
you get to the right answer.’”
–Rui Ma, 500 Startups
beijing
Beijing’s Entrepreneurial Ecosystem Today
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
excellent
de?cient world
class
excellent
16
Factors for Creating Entrepreneurial Environments
Culture & Community
Beijing’s startup ecosystem still lacks a widespread community that
embraces open information sharing, no-strings-attached mentorship,
cross-company collaboration, and collective learning. A “if you win, I
lose” mentality persists. While the taboo of failure is slowly fading, a
culture of embracing failure as a necessary path to innovation has yet to
be fully adopted.
High Impact Entrepreneurs
Chinese entrepreneurs are arguably somewhere between excellent and
world class. Not only have they shown an ability to scale large successful
businesses (e.g. Taobao, Baidu), but they have also shown an ability to
compete against foreign competitors in China (e.g. Google, eBay). Chi-
nese entrepreneurs are rapidly moving beyond simply copying foreign
business models to developing their own models and scaling companies
beyond China.
Government & Regulation
While the government’s initial attempts to stimulate high-impact entre-
preneurship by developing high-tech parks was met with limited success,
the government has played a key role in attracting foreign capital, open-
ing China’s Internet market up to competition, providing investment
capital to domestic VCs and startup companies and ofering incentives
to young companies.
Funding & Capital
Beijing’s venture capital infrastructure is well developed. The ?uid and
relatively easy access to investment capital has been a key component
in helping entrepreneurs to fuel their growing companies. While 90% of
investor exits to date have been via IPOs, the M&A ecosystem in China
has started to provide investors with additional exit avenues, which, in
turn, is creating a virtuous investment cycle.
Incubators & Accelerators
The primary purpose of incubators and accelerators in Silicon Valley is
to provide their entrepreneurs and companies with access to seasoned
entrepreneurs who are willing to mentor, collaborate, and share their ex-
periences with young entrepreneurs. While this mentor-driven commu-
nity is a key element of the fabric of Silicon Valley, it has yet to take hold
in a major way in Beijing.
Universities & Education
The world’s most innovative and productive startup ecosystems are
located near ?rst-rate universities. China’s premiere technical universi-
ty, Tsinghua University, ranks #50 globally. In contrast, Harvard, MIT,
Stanford, Caltech, and Berkeley each rank in the top 10 globally and are
located near innovation hubs. Chinese universities lag far behind their
US counterparts when it comes to attracting the best foreign students
and faculty, equipping students with practical industry-ready skills, and
facilitating the interaction between university R&D activities and the
surrounding commercial enterprises.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
17
Recommendations for the Future
Culture & Community: Beijing should strive to cultivate a startup community based on mentorship, collaboration
and collective learning. The secret to a thriving startup ecosystem is the people, not the physical infrastructure. Successful
Chinese entrepreneurs are best-positioned to drive this initiative in a no-strings-attached manner by openly sharing their
experiences, mentoring young entrepreneurs, advising immature startups, and investing some of their wealth back into the
ecosystem. Over time, this will result in a pay-it-forward culture where information spreads rapidly, resources are used ef-
ciently, collective knowledge is leveraged and innovation occurs.
High Impact Entrepreneurs: The wealth generated by large-scale exits should be
spread among as many employees as possible. While stock options are still a new phenomenon in
Beijing, entrepreneurs should ensure that company stock options are granted to every employee.
That way, when large-scale exits occur, as many people as possible get rich. By doing this, more
of the wealth created by successes is likely to be reinvested back into the ecosystem in the form
of new products built, technology developed, companies started and jobs created.
Government & Regulation: While the government’s initial attempts to stimulate high-impact entrepreneurship by
developing high-tech parks was met with limited success, the government has played a key role in attracting foreign capital,
opening China’s Internet market up to competition and providing investment capital to domestic VCs and startup compa-
nies. We think the government has room for improvement on IP protection and making it easier for entrepreneurs to start
and close young businesses.
Universities & Education: Beijing universities should actively recruit the best technical professors and students
globally and incentivize them to teach and receive their educations in China. Better professors are likely to attract higher
caliber students, which will produce better R&D. Additionally, universities should actively seek to work more closely with the
startup community and identify opportunities to commercialize university-developed R&D. These eforts will likely increase
the number of high impact ventures that are developed and launched at Chinese universities, which will then attract more
talented faculty and students, creating a virtuous cycle.
Incubators & Accelerators: Beijing incubators and accelerators should reposition their primary value-add as provid-
ing strategic mentorship and guidance as opposed to merely supplying investment capital. Developing a more open commu-
nity based on shared learning and mentorship will better enable incubators and accelerators to attract mentors with relevant
experience who share these values. Most companies in Beijing fail due to operational and strategic mistakes rather than a lack
of capital. Mentorship, rather than capital, is one of the largest voids in Beijing’s startup ecosystem today.
beijing
Beijing is the most well-developed startup ecosystem that we analyzed. It includes a large domestic market, a vast domestic
talent pool, wide access to investment capital and a deep understanding of Chinese consumers. However, challenges remain. We
have identi?ed a number of speci?c areas of improvement that will bene?t the continued evolution of Beijing’s startup ecosys-
tem.
Incubator: Startup Village is a public-private
partnership with India’s Department of Sci-
ence and Technology in the southern Indian
state of Kerala. It was created to incubate 1000 startups over 10
years. Most companies incubated are from college campuses.
Accelerator: GSF Accelerator was established
in 2011 by former Reliance Entertainment
CEO, Rajesh Sawhney. It follows a Y-Combina-
tor-like cohort system and provides companies with seed capital
($27,000 for 8% equity), mentorship, product development, and
help raising additional capital. GSF acknowledges that its approach
must be adapted to India’s markets in order to remain relevant.
Angel: Rajan Anandan is a prolifc angel investor in Internet, mobile
and SaaS start-ups. He is the current VP of Google India, and his in-
vestments include Capillary Technologies, SocialBlood, and StepOut.
He invests $10,000-$50,000 per company and is well respected for
his domain expertise.
Seed Fund: Blume Ventures was co-founded
by Wharton alum Karthik Reddy. Blume man-
ages $20M and invests $100,000-300,000 in
pre-Series A companies across the Internet, mobile and digital me-
dia spaces.
funding
& capital
INCUBATORS
& ACCELERATORS
high impact
entrepreneurship
i
n
n
o
v
Bangalore’s Innovation Ecosystem Begins to Evolve
Bangalore is the second largest startup ecosystem that we analyzed. Bangalore has
a large pool of technical talent, a growing network of VCs and angel investors, a
supportive state government and a generation of entrepreneurs who are increas-
ingly willing to take risks earlier in their careers. However, challenges remain,
including the taboo of failure in Indian society, a limited exit environment,
willing but inefcient government support of startups and an investing
community that often views their relationships with startups merely
as ?nancial transactions as opposed to partnerships.
Indian entrepreneurs are comprised of frst-time
entrepreneurs with 3-10 years of full-time work
experience (60%), serial entrepreneurs (15%), developers
(10%), internationally educated Indian returnees (10%), and
student entrepreneurs (5%). Indian startup entrepreneurs tend
to be more technical but lack the “hacker” mentality of their
US counterparts. Over the past 10 years, Indian entrepre-
neurs have started 10-20% of new ventures in Silicon
Valley. Unsurprisingly, returnees are the most
attractive entrepreneur segment to
early-stage investors.
The new wave of incubators and accel-
erators was started two years ago and is
markedly different from older incuba-
tors that have existed in elite colleges
for many years. They provide startups
with active mentoring and technical
guidance as startups prepare to raise
capital. The incubators and accelerators
are market-oriented and privately funded.
Most incubators and accelerators have
global ambitions for their cohorts, despite
India’s sizeable domestic market. Leading
accelerators include GSF Accelera-
tor (Delhi), Microsoft Accel-
erator (Bangalore) and
Start-up Village
(Kochi).
More than $1B was invested in Indian startup
companies in 2012. Accelerators and incubators
invest $20,000-50,000, seed funds and angel groups invest
$100,000-1M, and early-stage VC funds invest $1-10M.
India’s limited exits and small multiples paid by ac-
quirers has driven the explosion of incubators and
accelerators, many of which are providing capital
at more equitable terms. India’s diffcult exit
environment is the biggest negative factor
impacting the ecosystem. This has
caused some experienced entre-
preneurs to diversify by starting
accelerators, as opposed to
starting new ventures.
18 19
“58% of incubator and accelerator-backed startups die in the ?rst 18
months of operation”-Mukund Rajan, Microsoft Accelerator
“We want to seed companies that will have a global footprint”
-Rajesh Sawhney, GSF Accelerator
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Five more IITs launched in Madras, Kanpur, Delhi and Bombay
First national incubator in Indian Institute of Technology,Mumbai
The World Bank and ICICI Bank fund more than 50 SMEs
First Indian Institute of Technology (IIT)
launched in Kharagpur
Vishnu Varshney is selected to run the Gujarat Venture Fund
The Indian Angel Network is established
Blume Ventures, India’s ?rst seed fund, is launched
Travel site, Makemytrip, IPOs on the Nasdaq
(worth $600M today)
GSF Superangels launches an accelerator
Startup Village aims to incubate 1,000 startups over 10 years
Local search company, JustDial, IPOs in Bombay
Government launches 10,000 startups initiative
Naspers acquires ticketing portal, Redbus, for $130M
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Baidu goes public on the Nasdaq
(worth $55B today)
1950 1960 1980 1990 1995 2006 2009 2010 2011 2012 2013
1950
1960s 1980s 1990 1999
bangalore
v
Bangalore’s Innovation Ecosystem Begins to Evolve
Indian entrepreneurs are comprised of frst-time
entrepreneurs with 3-10 years of full-time work
experience (60%), serial entrepreneurs (15%), developers
(10%), internationally educated Indian returnees (10%), and
student entrepreneurs (5%). Indian startup entrepreneurs tend
to be more technical but lack the “hacker” mentality of their
US counterparts. Over the past 10 years, Indian entrepre-
neurs have started 10-20% of new ventures in Silicon
Valley. Unsurprisingly, returnees are the most
attractive entrepreneur segment to
early-stage investors.
community
& culture
government
& regulation
universities &
education
a
t
i
o
n
-
.
The vast majority of India’s
middle class continues to
remain risk averse and failure is still
taboo in Indian society. However, risk
appetites are slowly increasing among young
professionals with 3-10 years of professional
experience. Successful returnees and Indian en-
trepreneurs are showing signs of a willingness to
share their experiences and mentor
the next generation of
Indian entrepre-
neurs.
The earliest government effort to
provide venture capital to the small
enterprise sector occurred in the ‘80s.
In 2013 the government launched an
initiative called “10,000 Startups” to
provide startups with $25,000 worth
of products and services. Government
restrictions on foreign investment in
and ownership of local companies has
hurt the ecosystem. Most government
offcials don’t understand the Internet,
which is one reason why regula-
tions remain hazy around
things like ecommerce.
India’s Department of Science and Technology has
traditionally provided funding to over 100 accredited uni-
versities to incubate technology startups. India’s most
elite technical and management universities have active
incubator programs. However, while technically sav-
vy, many of the startups at university incubators
lack the mentoring and fnancial support
necessary to commercialize. The role of
Indian universities in helping bright,
enterprising students start and
scale new businesses remains
limited.
18 19
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Five more IITs launched in Madras, Kanpur, Delhi and Bombay
First national incubator in Indian Institute of Technology,Mumbai
The World Bank and ICICI Bank fund more than 50 SMEs
First Indian Institute of Technology (IIT)
launched in Kharagpur
Vishnu Varshney is selected to run the Gujarat Venture Fund
The Indian Angel Network is established
Blume Ventures, India’s ?rst seed fund, is launched
Travel site, Makemytrip, IPOs on the Nasdaq
(worth $600M today)
GSF Superangels launches an accelerator
Startup Village aims to incubate 1,000 startups over 10 years
Local search company, JustDial, IPOs in Bombay
Government launches 10,000 startups initiative
Naspers acquires ticketing portal, Redbus, for $130M
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Baidu goes public on the Nasdaq
(worth $55B today)
1950 1960 1980 1990 1995 2006 2009 2010 2011 2012 2013
bangalore
2011 2009 2010 2006 2012 2013
Mr. Bikchandani was educated at the Indian
Institute of Management in Ahmedabad. He
co-founded InfoEdge, a provider of salary survey reports. Sub-
sequently, he started Naukri.com, India’s ?rst and now largest
domestic online job portal. Naukri went public in 2006 on the
Bombay Stock Exchange, raising $34M at $160M valua-
tion, making it one of India’s ?rst Internet IPOs.
Deep Kalra is an alumnus of the Indian
Institute of Management, Ahmedabad.
Prior to becoming an entrepreneur he worked as a VP at
GE in India. Mr. Kalra founded MakeMyTrip.com, In-
dia’s largest online travel site, in 2000. The compa-
ny launched in India in 2005 and went public
in the US (NASDAQ: MMYT) in 2010.
MakeMyTrip has a market value of
$600M today.
Sanjeev Bikchandani
Sabeer Bhatia
Phanindra Sama
Mr. Bhatia was educated in India and at Stanford. He
brie?y worked for Apple early in his career. Mr. Bhatia
co-founded Hotmail in 1996. He achieved celebri-
ty status in India when he sold Hotmail to Microsoft in 1998 for
$400M in stock. He has a personal net worth of over $100M.
In 2006, Phanin-
dra Sama co-found-
ed redBus, an Indian travel booking
site. In 2013, redBus was acquired by
South Africa-based Internet group
Naspers and Chinese Internet giant
Tencent, for an estimated $125M.
This acquisition is hailed as an im-
portant exit milestone for Indian
VCs.
Deep Kalra
“It is unfair to compare the start-up ecosystems in Bangalore and Silicon
Valley- their realities are diferent.”
-Indian VC
“The risk/reward pro?le for smart people to do startups isn’t there given the
limited exit environment. The alternative to a startup is a $100k/year steady
job.” -Mukund Rajan, Microsoft Accelerator
“It is important to understand ‘what’ the policy is today and ‘how do I efec-
tively operate within the context of the system, because changing policy is
hard.” -Indian VC
“The Indian Government hurts more than it helps the startup ecosystem, but
they have largely stayed out of the way.”
–Indian VC
“The Indian start-up ecosystem is still missing quality mentoring and capital in the
$100,000-$300,000 investment range”
-Indian Seed Investor
Bangalore’s Entrepreneurial Ecosystem Today
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
evolving
20
Factors for Creating Entrepreneurial Environments
The vast majority of India’s young technical and managerial talent
belongs to a risk-averse middle class that favors career stability over
potential professional risk at startups. The startup community still has
room for improvement in cultivating mentorship, increasing ecosystem
collaboration and enhancing partner-centric relationships with investors.
High Impact Entrepreneurs
Indian entrepreneurs possess world-class technical talent and managerial
capabilities. They are generally highly educated, motivated and have
global ambitions for their startups. Indian entrepreneurs could bene?t
from placing more emphasis on achieving domestic success initially
before seeking to expand their businesses globally.
Government & Regulation
The Indian government has initiated large-scale eforts to provide capi-
tal to entrepreneurs. These eforts are often inefcient, partly driven by
the government’s inability to identify the best entrepreneurs and accel-
erators to support. The government has struggled to encourage tech-
nology entrepreneurship outside IT services. Regulations have made
it difcult for angel investors to operate, hindered the ability of foreign
capital to ?ow into India, and discouraged the investment and M&A
activities of foreign companies in India.
Funding & Capital
Many of India’s venture capitalists lack the startup experience and
mentorship capabilities that are critical to startups. The limited exit en-
vironment in India has compelled some Indian investors to place overly
onerous terms on entrepreneurs and attempt to ?ip their stakes to other
investors in an efort to make their fund economics viable. While slowly
changing, there are far too many inexperienced former investment
bankers and corporate executives acting as investors.
Incubators & Accelerators
Privately funded incubators and accelerators in India are relatively new to
the ecosystem and have greatly increased access to early stage mento-
ring and capital for promising startups. The best accelerators are run by
professionals with successful operating track records. Accelerators are
tailoring the Silicon Valley model to ?t the Indian market to efciently
identify, nurture and scale young companies.
Universities & Education
The earliest incubators in India at elite engineering and management
colleges yielded few commercial successes. The interface between
university R&D and commercial enterprises lags far behind that of the
US. Low quality faculty, outdated curricula and weak market interest in
student-initiated ventures plague the future of entrepreneurship emerg-
ing from India’s higher education institutes.
Culture & Community
de?cient world
class
evolving
de?cient world
class
excellent
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
21
Looking to the Future
Culture & Community: Bangalore needs to strive to create an environment conducive to risk-taking and an atti-
tude more tolerant of failure. India needs more successful Indian entrepreneurs who can be role models for new startups and
provide mentoring and capital. Successful Indian entrepreneurs should lead the way for promoting entrepreneurship in the
country. Greater knowledge sharing and shared learning among startups and investors will yield more successful outcomes.
Government & Regulation: The Indian Government needs to partner more efectively with leading incubators and
accelerators to identify quality startups that can be ?nanced. It needs to create and enforce stringent laws around IP protec-
tion, provide tax incentives to early stage companies and their investors, relax restrictions on foreign investment and acquisi-
tions and increase broadband connectivity throughout the country.
Universities & Education: Indian engineering and management colleges need to invest in hiring and retaining
world class faculty who conduct research that has greater relevance to industry in the areas of computer science, electrical
engineering and management ?elds. Universities need to enhance collaborations between university R&D and incubation
activities and Bangalore’s broader technology ecosystem. Additionally, the elite institutes in India stand to gain from tapping
into the vast pool of global and domestic alumni who can act as role models and mentors to improve the quality of startups
incubated in universities.
Incubators & Accelerators: Applicant quality has been a major struggle for India’s incubators and accelerators to
date. Incentivizing experienced entrepreneurs to participate in the initial ?ltering and subsequent mentoring processes will
help to attract higher quality entrepreneurs and improve the quality of companies. Incubators and accelerators should also
assist their companies in negotiating investment terms that are in the best long-term interest of the companies.
Bangalore has a rapidly evolving innovation ecosystem that is market-driven, possesses a large network of educated technol-
ogy-savvy entrepreneurs and boasts a growing network of investors. Bangalore still faces structural challenges that hinder the
consistent creation of large successful companies that we see in Silicon Valley and even Beijing. There are a number of steps that
can be taken to improve the state of Bangalore’s innovation ecosystem:
High Impact Entrepreneurs: Indian entrepreneurs need to focus on building inno-
vative products and services tailored to the Indian market. There is a need for active involve-
ment of successful entrepreneurs to advise and ?nance startups as they scale. This will create
an environment where large exits are possible through IPOs. Improved regulations around
foreign investments and acquisitions will likely increase the number of exits through M&A.
bangalore
funding
& capital
INCUBATORS
& ACCELERATORS
i
n
n
o
v
Santiago’s Ecosystem Rumbles to Life
Santiago is beginning to see the fruits of its
ecosystem development efforts with initial exits in
sectors such as data services (AxonAxis by Equifax
in 2010), local online advertising (Zappedy by Groupon
in 2011), mobile social gaming (Atakama Labs by DeNA in
2011) and clean energy (Solar Chile by First Solar in 2013),
although the ecosystem is still awaiting a marquee “homerun.”
Recent venture funding of web-based startups such as Safer-
Taxi ($4.2M) and ComparaOnline ($16M) point to
increased early-stage investment activity while
the exit market for Latam technol-
ogy companies continues
to mature.
In addition to Startup Chile, others have
recently launched seed accelerator pro-
grams including Fundación Chile, Wayra
(Telefonica) and Social Lab, a social impact
program. Nearly 30 CORFO-backed incu-
bators dot the landscape and co-working
spaces for startups are becoming more
common. While this activity signals a
burst of interest in entrepreneurship, time
will tell if these programs are effective
at producing investable startups with
big market potential and how they will
evolve as the ecosystem matures and
becomes returns-driven rather than
subsidy-driven.
LAVCA has named Chile the #1 environment for VC in Latin
American for a consecutive 8 years due to the country’s “IP
protection, judicial transparency and perceived corruption.”
CORFO has matched private capital by a ratio of 3:1 to
raise an estimated $450M for early stage investments,
but much of this capital has gone to later stage growth
investments while a capital gap still exists at the early
stage. New accelerators, seed funds and angel
groups are attempting to fll this void, however
the shortage of high-growth homegrown
startups and limited exit activity has
constrained investment.
high impact
entrepreneurs
22 23
1998 1939 1967 1976
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
CORFO established to promote economic growth
CONICYT founded to develop
Chilean science and technology
Fundación Chile founded
with ITT (US telecom)
Endeavor launches ?rst satellite ofce
Octantis angel network invests
$1.2M but has poor returns
Chile Global Angels launches angel network
Chile joins Patent Cooperation Treaty
Startup Chile is launched
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Insurance startup ComparaOnline raises $16M
SocialLab accelerator raises $2M for social impact startups
Nazca Ventures launches $6M micro-VC fund
Government introduces
35% R&D tax credit
Baidu goes public on the Nasdaq
(worth $55B today)
1939 1967 1976 1998 2003 2009 2010 2012 2013
Angels Seed Accelerators
Angels Seed Accelerators
Angels Seed Accelerators
Angels: The frst angel group Octantis was organized in
2003 and bet $1.2M on local startups but failed to gen-
erate returns. In general, angel networks struggle without
strong seed and venture investors in the ecosystem to
provide investment leadership and follow-on funding,
which was the case in Santiago at the time. Since then,
Chile Global Angels formed in 2009 and its 27 angels have
made 12 investments to date and generated one exit.
Other small angel clubs have formed in association with
different universities.
Seed Accelerators: While Startup Chile offers $40K
grants to participants, other groups such as Fundación
Chile, Wayra (Telefonica) and some universities have
launched seed accelerators that take equity in participat-
ing startups and establish market terms for early-stage
companies. Another accelerator, Social Lab, helps launch
social impact companies, which have now raised $2M in
capital. Each of these accelerators appears to be moti-
vated primarily by strategic objectives and secondarily
by returns, which underscores the early nature of the
ecosystem and uncertainty regarding its ability to sustain
itself from value creation and liquidity events alone.
Seed Funds: There are very few, if any, traditional seed
funds in Chile and “seed capital” is often used to refer to
small grants or investments offered through incubators
or accelerators. This presents the capital gap that exists
between $100K and $1M in initial funding, with most
venture funds preferring to invest larger amounts in more
developed companies. Most recently Nazca Ventures
raised $6M (larger if matched by CORFO) to provide
smaller early stage investments that may resemble tradi-
tional seed deals.
In early 2010 a massive 8.8-magnitude earthquake rocked the coast of Chile and afected
over 1M people while destroying some 350,000 homes and claiming hundreds of lives.
The country was in the middle of a transition of power for the ?rst time in 20 years and
many must have wondered what the future would hold for Chile. Out of crisis
and adversity can spring new opportunities and willingness to collaborate,
and for some, a particularly audacious vision emerged: that Chile would
bounce back stronger than ever with Santiago as the leading innova-
tion hub in Latin America.
santiago
v
community
&
culture
government
& regulation
universities &
education
-
.
Chilean society, still divided from the
Pinochet era, has a mixed view of the
laissez-faire economic policies of the
period’s “Chicago Boys.” Following the
transition to democracy, the center-left
political party, which ruled for 20
years, maintained a free-trade strategy
as Chile became a regional economic
leader. In 2010, the conservative party
took power and made interventions to
encourage a new culture of entrepre-
neurship, with most ecosystem de-
velopment efforts backed by
state agencies CORFO
and CONACYT.
Santiago has no fagship research institution and its system of
higher education is fragmented across small, mostly private
universities. Access to education is a hotly debated political
issue with recent demonstrations against the school system
and calls for public, affordable college for all. R&D spending is
an anemic 0.4% of GDP and the government has moved to
increase spending, incentivize public and private R&D
through tax credits and sponsor universities-based
incubators and accelerators. In 2009 Chile joined
the PCT and turned focus to patent fling and
technology commercialization.
When Startup Chile launched in 2010, the
average Chilean’s extended social network
was limited compared to that of other
Latin Americans, owing perhaps to Santiago’s
removed geographical location and a conservative
business culture based on close relationships and
family ties. While Santiago’s economy was strong, its
entrepreneurial culture was weak, with society and
parents pushing talented young graduates toward large
stable corporations while discouraging risk-tak-
ing, disruptive thinking and entrepre-
neurship. Startup Chile and
others are working to
change that.
22 23
Fundación Chile was founded in 1974 as a $200M
public private partnership with ITT (US telecom) and now
BHP Billiton (global mining) to support innovation tech-
nology adoption in Chilean industries. The organization is
credited with helping launch Chile’s salmon and solar indus-
tries and operates a venture fund and seed accelerator program with exited
investments in data services, clean energy and agritech. These efforts support
the ecosystem by providing market terms and reduced transaction costs for
early-stage fnancings.
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
CORFO established to promote economic growth
CONICYT founded to develop
Chilean science and technology
Fundación Chile founded
with ITT (US telecom)
Endeavor launches ?rst satellite ofce
Octantis angel network invests
$1.2M but has poor returns
Chile Global Angels launches angel network
Chile joins Patent Cooperation Treaty
Startup Chile is launched
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Insurance startup ComparaOnline raises $16M
SocialLab accelerator raises $2M for social impact startups
Nazca Ventures launches $6M micro-VC fund
Government introduces
35% R&D tax credit
Baidu goes public on the Nasdaq
(worth $55B today)
1939 1967 1976 1998 2003 2009 2010 2012 2013
2003 2009 2010 2012 2013
Startup Chile (SUP) is a government-sponsored accelerator that offers a visa and $40K in
non-dilutive funding to international entrepreneurs (and now local entrepreneurs) to spend 6
months in Santiago working on a startup and supporting the local entrepreneurial ecosystem
by teaching classes, mentoring locals and participating in conferences, hack-a-thons and meet-
ups. The purpose of Startup Chile is to create a local culture of entrepreneurship with a net-
work of international entrepreneurs. Several SUP participants have raised additional private
capital and at least two have already been acquired. of Chile
“What took us from a low income to a middle income country will not take
us from a middle to high income country”
- Andrés Pesce
VP of Business Development and Investment, Fundación Chile
“The great thing about these days is that you can challenge the in-
cumbents with the same rules and in their own ?eld”
- Nicolas Shea
Founder of Start-up Chile and Cumplo
Corfo is Chile’s Economic Development Agency
that has existed since 1939 to promote industry
and growth. During the 1990s the agency in-
creased its focus on innovation, R&D, tech
transfer and investment and is now the public backbone of the entre-
preneurial ecosystem. CORFO supports accelerators (most notably
Startup Chile) and dozens of incubators by subsidizing operations and
providing grants for startups. In 2006, CORFO began matching funds
up to 3X for early-stage venture frms and in 2012 a 35% tax credit
was announced to incentive private R&D spending.
santiago
Santiago’s Ecosystem Rumbles to Life
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
excellent
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
nascent
24
Factors for Creating Entrepreneurial Environments
Culture & Community
Santiago is still in the early stages of building a vibrant startup community. His-
torical cultural barriers have included the perception of entrepreneurship as less
prestigious and of lower economic value for those with top talent, while some
young people, politically opposed to big business, tend to include new venture
activity in their negative opinion. Startup Chile’s efort to catalyze a culture of
entrepreneurship has raised awareness and support for startups and has added
Santiago to the global startup map, but the outcome is yet to be determined.
High Impact Entrepreneurs
There is not yet a robust track record of high impact entrepreneurship in Santi-
ago, although a handful of local startups have been acquired in recent years as
well as a couple of ventures launched by international founders at Startup Chile.
Without a previous generation of successful, high-growth entrepreneurs, the
ecosystem lacks the robust mentor networks and experienced angel investors to
guide young founders, although connections with international entrepreneurs
help bridge the gap.
Government & Regulation
The Chilean government, through agencies CORFO and CONICYT, has
been the ubiquitous presence in the ecosystem with innovation and entrepre-
neurship a top priority. Its groundbreaking Startup Chile program has been
copied by many other aspiring ecosystems, including in Brazil, and the gov-
ernment’s supportive policies have attracted international research centers and
entrepreneurs, incentivized new fund formation, reduced barriers to starting a
business and reformed bankruptcy laws.
Funding & Capital
Santiago has the most developed venture capital market in Latin America with
new funds forming in recent years to ?ll gaps in the capital spectrum, particu-
larly at the early stage. In 2013 CORFO announced $90M in matching capital
for 6 new early stage funds, 3 with foreign capital. Local angel, seed and venture
investors are currently funding startups in Santiago and abroad, while regional
Latin American funds have led some of Chile’s largest venture rounds in recent
months.
Incubators & Accelerators
Through dozens of incubators, a variety of accelerator programs and growing
co-working spaces, Santiago is creating opportunities for networking, mentor-
ship and collaboration. International programs like Wayra and 500 Startups have
accepted Chilean founders while local accelerators at Fundación Chile, Social
Lab and Startup Chile have pursued very diferent missions including ?nancial
returns, social impact and cultural change. The sustainability of these programs
in the long term is unknown.
Universities & Education
Santiago claims two universities in the top 10 in Latin America (University of
Chile and Ponti?cal Catholic University) however neither is consistently ranked
among the top 400 global research institutions. Progress has been made to
incentivize research and development, PCT patent ?ling and technology
transfer, but venture funding of university-based technologies has been limited.
Politically, the highly privatized university system and lack of access to higher
education for many is a hotly debated issue in current discourse.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
25
Recommendations for the Future
Culture & Community: Santiago should continue its efort to import foreign entrepreneurs but needs to do a
better job of attracting those who will put down roots and help build the community for years to come. The country should
strengthen ties with diaspora Chileans and entice entrepreneurial and highly educated returnees to come back and help build
the ecosystem with their experience and international networks. Entrepreneurship must be celebrated on both sides of the
political isle and eforts should be made to involve disruptive, counter-culture members of society in the ecosystem. Startups
must be seen as a way to efect societal change and to solve big problems and not just as a means of making money. Chil-
eans must become more collaborative and risk-tolerant.
High Impact Entrepreneurs: Entrepreneurs in Santiago have yet to achieve a “homerun” exit
and critics of the ecosystem point to the abundance of mobile application start-ups and the relative
paucity of basic science and IP-driven companies. Santiago should continue to encourage entrepre-
neurs to develop capital efcient products (such as mobile applications) but needs to also develop
its core innovation capacity to generate truly disruptive companies. Santiago should work to attract
more seasoned entrepreneurs beyond the relatively inexperienced participants in Startup Chile and
should expand exchange programs with other leading international tech hubs to help locals gain
experience and build networks abroad. A ?rst generation of successful, internationally-connected
entrepreneurs could provide mentorship to young entrepreneurs and inspire risk- averse talent to
consider a start-up as a viable if not superior alternative to traditional employment.
Government & Regulation: The government has played a central role in developing Santiago’s ecosystem but
needs to have its own exit plan in place to allow the private sector to thrive. Chile is preparing to return power to the cen-
ter-left political party and the country’s leaders, regardless of political afliation, need to protect the successful innovation
programs from disruptive political cycles. Entrepreneurship must transcend political lines and a long-term commitment must
be made to innovation, R&D and a supportive business environment. While it may be tempting to spread scarce resources
equitably across programs, Santiago should concentrate its resources on high-impact programs and players. Programs to spur
entrepreneurship need to be focused on core innovation and not just “window-dressing” to put Santiago on the map.
Universities and Education: Santiago must resolve its current crisis in higher education by rebalancing quality
and access across all segments of society. A component of this solution should include the transformative potential of
massive open online courses to help close the gap between private and public schools. Santiago must become a magnet
for top regional and international students by improving research capabilities (particularly in core innovation areas such
as clean tech, astronomy and mining), by providing ?nancial aid to gifted students and by diferentiating itself from other
Latin American hubs by focusing on advantages in physical security and quality of life. Finally, Santiago must support a
?agship research institution that can produce breakthrough IP and compete for top scientists and engineers from around
the world.
Santiago is an emerging entrepreneurial ecosystem in one of the richest, most competitive nations in Latin America and is transitioning to an
innovation economy. The ecosystem has bene?ted from substantial government support in recent years and is beginning to show its potential
with more startup activity, early-stage investment, research spending and international awareness than ever before. Moving forward, Santiago
will be challenged to develop its own core productive assets and areas of investigation that will drive the city’s innovation engine. The country
needs to increase investment in research and development. Other challenges include its relative geographic isolation, small domestic market,
deep political fractures and competition for regional superiority from other Latin American ecosystems in Brazil, Colombia and Mexico.
santiago
funding
& capital
INCUBATORS
& ACCELERATORS
Nairobi’s Fledgling Innovation Ecosystem
Amongst the cities that we traveled to, Nairobi had the youngest and least developed innovation ecosys-
tem. Initial signs of organized high impact entrepreneurship and investment can be traced back to only a
mere ?ve years ago. Today, there appears to be notable interest from foreign investors not only
in Nairobi but also in many cities across East Africa. But the innovation and entrepre-
neurial ecosystem faces its share of challenges such as a small domestic market
that is narrowly focused on mobile technology. Local opinion on the status
and quality of all six factors varied widely but one thing that people seem
to agree with is that time is still needed in order to allow for growth of
the ecosystem. The hope is that government support for innova-
tion will increase, cultural biases against entrepreneurs will wither
away, technology penetration will continue to grow, and that
all these elements will attract investors and lead to the right
deals.
Safaricom’s introduction of mobile
payment system M-Pesa in 2007 was critical
for the creation of an innovation ecosystem in
Nairobi. This mobile payments platform would be the
foundation for many Kenyan startups going forward (e.g.
Sematime, Kopo Kopo). 31% of Kenyan GDP is now transact-
ed through mobile payments (Forbes) and 74% of adults in Kenya
are M-Pesa customers. This ecosystem is supported by many
international investors and entrepreneurs. However,
entrepreneurship remains challenging for local Ken-
yans, as many opt for the fnancial security
of a corporate job versus taking
equity in a startup.
Nairobi has begun to develop a cohort of
incubators and accelerators. They are a mix
of co-working spaces, mentorship programs,
entrepreneurial communities, and true
accelerators. This network is loosely struc-
tured and overlapping, are usually funded
by investors abroad, and typically have an
industry focus (mobile technology, ener-
gy). Some, like Invested Development, are
socially oriented, investing in companies
that have potential to lift many Kenyans
out of poverty and improve their stan-
dard of living. Others, like Savannah Fund,
are more oriented towards the bottom
line. Some, such as 88 mph, are
true accelerators making
real equity bets.
Early stage investors in Nairobi comment that there is no
shortage of capital. Yet, they continue to struggle to fnd
the right entrepreneurial talent and companies to invest
in. There are 25+ early stage frms (and this number is
growing!) who invest at the early stage, funding a range
of sizes from less than $20,000 to $2 million. However,
the community has still indicated that a funding gap
exists at the idea to product level (sub-$20,000),
as some entrepreneurs lack the personal
capital (or “friends and family round”)
to self-fund, and also at the $50,000
- $200,000 level. A common
area of focus for investors
is mobile technology.
“The necessary business acumen is not there. There are plenty of brilliant young coders
who can build a beautiful product but do not have the training nor experience to bring it
to market. There is a gap between idea and growth phases of young companies.”
–Nancy Wang, Innovation 4 Africa
A number of Incubators and Accelerators have recently
popped up in Nairobi, some of these include:
“East Africa is attracting a signi?cant amount of investment. The region is one of Africa’s
fastest growing economic hubs.” –Kenneth Macharia, Acumen Fund
“Our focus is not IT, its social enterprise.” –Founder and CEO of prominent Kenyan start-up accelerator and investment ?rm
m:lab
Growth Africa
88mph iHub
nailab
Invested Development
Innovation 4 Africa
iLab Africa
Acumen Fund
high impact
entrepreneurs
26 27
2014 2004
1994
1984
M-Pesa launched in Kenya by Safaricom
BarCamp Nairobi began to attracting entrepreneurs
Ushumidi founded by Erik Hersman
88mph accelerator founded by Danish investor Kresten Buch
Savannah Fund launched as $10mm accelerator for high growth tech startups
iHub, the ?rst incubator/tech-hub, is founded
iLab Africa is established
Invested Development, an early stage impact investment ?rm, is founded
2007 2008 2009
KENYA
2010
Nairobi’s Fledgling Innovation Ecosystem
“Our focus is not IT, its social enterprise.” –Founder and CEO of prominent Kenyan start-up accelerator and investment ?rm
community
&
culture
government
& regulation
universities &
education
-
.
The entrepreneurial community in
Nairobi is small and bears a large inter-
national infuence. The investor community
is largely comprised of “outsiders”: they are
visibly male, young, and white. Many of them
came to Africa to make a difference and are deeply
engaged with the social impact mission. There is
a cultural dichotomy for the Kenyan entrepreneur.
Kenyans are very entrepreneurial by nature of their
environment. However, pursuing entrepreneurship as a
career is still diffcult for new Kenyan graduates who
attended university based on the support of
the broader communities and opt
to take a corporate job with
stable cash fows.
Reviews on government involvement in
innovation are mixed. Some investors
are concerned with corruption and
bureaucracy – citing visa issues and
ease of obtaining permits in particular.
According to the World Bank’s Doing
Business 2014 index, Kenya’s ranking
has fallen and in 2014 ranks 129 out
of 189 countries overall. However, the
government has the right intentions. In
2008, it implemented Kenya Vision 2030,
a long-term development plan
whose goal is to transform
the country into a newly
industrializing, middle
income country.
Universities have begun to get involved in entrepreneurship.
However, real challenge in the education space is the lack
of interaction between MBA and technology programs.
Because these programs do not usually overlap,
there is a gap between the two felds - both of
which are required to start, build, and develop
successful businesses. In addition, due to
the lack of successful predecessors,
there are few mentors available to
support and educate entrepre-
neurs.
26 27
2014 2004
1994
1984
M-Pesa launched in Kenya by Safaricom
BarCamp Nairobi began to attracting entrepreneurs
Ushumidi founded by Erik Hersman
88mph accelerator founded by Danish investor Kresten Buch
Savannah Fund launched as $10mm accelerator for high growth tech startups
iHub, the ?rst incubator/tech-hub, is founded
iLab Africa is established
Invested Development, an early stage impact investment ?rm, is founded
The Konza Techno City - A Brilliant Plan or a Planned Disaster?
Kenya’s government recently launched a $15bn initiative, the Konza Techo City project, an IT city to be
built 37 miles outside of Nairobi. Konza is part of Kenya Vision 2030 and will have a science park, con-
vention center, shopping malls, hotels, international schools, and more.
The government expects Konza to create as much as 20,000 new IT jobs, as well as spur
trade and investment in Kenya. Konza’s focus will be on business process outsourcing,
software development, data centers, call centers, and more.
This plan has been met with mixed reviews, but largely skepticism and concerns
that this is more a political play than a truly economic one. While political
parties on all sides are supportive, citizens seem more hesitant.
“It’s a massive scam” (Konza Techno City)
– prominent player in the Nairobi entrepreneurial environment
KENYA
2010 2011 2012
“I think they are quite destructive.” (in regards to grants given by
government) “It hurts the ecosystem.”
–Nancy Wang, Innovation 4 Africa
“[Businesses] are very tedious to set up, it takes many days.”
–Investment Analyst at Nairobi investment ?rm
iLab Africa is a research center under the Faculty of Inno-
vation Technology at Strathmore University in Kenya. iLab
Africa was created in order to drive research, innovations
and entrepreneurship. Its primary focus is on using mobile
technology to deliver solutions. While iLab does not pro-
vide funding, it provides workspace, advisory services, and
connections with Venture Capital ?rms.
Nairobi’s Fledgling Innovation Ecosystem
world
class
de?cient
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
evolving
de?cient world
class
nascent
28
Factors for Creating Entrepreneurial Environments
Culture & Community
Nairobi’s startup ecosystem is still in a ?edgling state with early eforts to build
a community of local and foreign entrepreneurs, innovators and investors. A
small, close-knit community of predominately foreign talent is forming and
tends to be oriented toward social impact in its startup and investment focus.
Native Kenyans are also participating in the emerging community, however
work is needed to create a culture of collaboration and shared risk-taking in
what has historically been an ethnically divided society.
High Impact Entrepreneurs
Given the nascent status of high-impact entrepreneurship in sub-Saharan Afri-
ca, an experienced ?rst-generation of homegrown entrepreneurs and mentors is
still in the making. Kenyan students feel a strong obligation to provide ongoing
?nancial support to their home communities upon graduation, with most young
talent pursuing corporate or government employment. While technical talent
does exist in Nairobi, it is often not balanced with business acumen and knowl-
edge of startup methods.
Government & Regulation
The government has recently made eforts to stimulate the long-term econom-
ic development of the country through Kenya Vision 2030 and other initiatives
aimed at youth entrepreneurship but results remain to be seen. Kenya’s ease of
doing business ranking by the World Bank continues to decline in recent years
while bureaucracy creates unnecessary friction for new companies. Foreigners
complain of the long wait times, fees and paperwork required to obtain a visa or
to open a business.
Funding & Capital
Given the tepid investment environment in the rest of the world, there is a sig-
ni?cant amount of foreign money chasing East Africa. Over the past few years,
various early stage investment ?rms have set up shop in Nairobi – some with
higher social purposes and others purely pro?t-driven. These ?rms fund the
spectrum of investment stages, although some funding gaps remain. However,
there have been no prominent exits via IPO or M&A, due to the still evolving
stages of Kenya’s entrepreneurship journey.
Incubators & Accelerators
The early innovation ecosystem in Nairobi was spurred by the founding of the
iHub umbrella in 2009 to ofer co-working space, networking and mentorship
for local and foreign innovators. iHub founder Erik Hersman also launched
m:lab, a mobile-focused incubator and a research arm which publishes reports
on the state of innovation in Africa. Others have since launched seed accelera-
tors and there is now a platform for budding entrepreneurs to seek mentorship
and capital in a supportive environment.
Universities & Education
Kenyan universities are starting to build platforms to support entrepreneurship,
research and development and technology transfer. At Strathmore University,
professors had limited time to spend on research so it created iLab, a research
and innovation center, and iBiz, a business incubation center for student-led
startups. Kenyatta University launched the Chandaria Business Innovation &
Incubation Center in 2011 to support both KU students and other Kenyans in
their entrepreneurial endeavors.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
KENYA
29
Recommendations for the Future
Culture & Community: The idea of being a job creator instead of a job seeker very much falls in line with the Kenya
Vision 2030 goals. If gifted students within technology and business can ?nd each other and be free of the ?nancial and cul-
tural constraints that otherwise demand them to take corporate jobs, strong and innovative startups with high success poten-
tial will begin to emerge. This mentality must by further promoted and bred within the national identity to truly efect change
at the grassroots level where graduating students make career decisions. Kenya Vision 2030 is a promising starting point.
Government & Regulation: Kenya’s rank in the World Bank’s Doing Business 2014 report has fallen from the pre-
vious year, overall and in particular categories. Kenya can reduce bureaucracy by improving access to permits, registration,
and credit, reducing lead times to obtain the aforementioned, creating easy access to visas for entrepreneurs and investors,
providing tax and other economic incentives to startups, providing business and technology training for entrepreneurs, and
providing better enforcement of contracts (IP and otherwise). These changes will motivate entrepreneurs to see Nairobi as a
friendly environment for the creation of jobs through entrepreneurship.
Universities & Education: Universities can take on a more active role in designing joint technology and business
programs that are ultimately meant to breed a class of well-educated entrepreneurs with computing prowess and business
savvy. Additionally, the continued creation of platforms that emphasize entrepreneurship as a career and give the foundation
for launch is critical. Many successful entrepreneurs develop their ideas and meet their business collaborators in educational
settings and Kenya must capitalize on its own academic programs.
Nairobi is the least developed startup ecosystem in our analysis, having really only started a few years ago and consisting now of a small
community. Prominent exits have not yet occurred and will likely require at least a few more years before a ?rst generation of successful entre-
preneurs can emerge. Kenyans are by nature and circumstance very entrepreneurial people, however the vision is often limited to achieving a
certain quality of life as opposed to efecting big disruptive change. The creation of a successful entrepreneurial ecosystem faces some sig-
ni?cant challenges, including: a limited domestic market that is further restricted by internet and smartphone penetration rates, cultural factors
pushing new grads to be job seekers instead of job creators, limited overlap in technical and business training, and bureaucratic government
policies that fail to promote long-term incentives for entrepreneurship. Last but not least, time is certainly needed for this community to climb
to a higher state of maturation.
We have identi?ed a number of speci?c areas of improvement that will bene?t the continued evolution of Nairobi’s startup ecosystem.
High Impact Entrepreneurs: The sophistication level of entrepreneurs needs to be
raised through better technology and business training in universities, as well as mentorship from
experienced players in the East African innovation scene. This “chicken-or-egg” problem will
likely requires a multiple year period to resolve itself. Entrepreneurs must be comfortable with the
risk-seeking nature of the business. This requires a fundamental cultural change throughout the
broader community that promotes risk tolerance as a basis of innovation.
Incubators and Accelerators: Although a number of incubators and accelerators exist on and around Ngong
Road in Nairobi, the presence of more locals is critical in Nairobi’s incubators and accelerators, an area currently dom-
inated by young, international talent that may not have the local know-how and experience to mentor budding Kenya
entrepreneurs. The chicken-or-egg problem again presents itself: great mentors with success building innovative startups
in East Africa are still lacking, yet they are greatly needed to help establish this ?rst-generation entrepreneurial class.
During our research, we have traveled to countries that cover the spectrum of economic development. What
we’ve found in each geography is that innovation ecosystems are critical to creating thriving and sustainable economic
growth for countries. Each of the countries we visited has been transformed in ways both big and small by entrepre-
neurship and the disruptive technologies created. While the recipe for success will vary by country, we have attempt-
ed to layout the elements that we believe to be critical for developing thriving high-impact entrepreneurship and a
thriving innovation ecosystem.
- Government & Regulation: A government’s support is one of the most critical factors towards creating a thriving
entrepreneurial ecosystem. Government must create a healthy and predictable environment that reduces friction for
entrepreneurs, investors, and academics. This entails building the necessary infrastructure for the ecosystem: easy visa
programs, access to permits, IP protection, contract enforcement, and more. However, governments should not be
making the investment decisions and capital allocation should be left up to the private sector. Governments should
be cautious that when it tries to overstep its public sector role; its spending can become wasteful. Small government
actions can have big efects on making a system easier to navigate, but it can’t necessarily change the culture of the
ecosystem on its own.
- Culture & Community: Regardless of geography, innovation ecosystems should work to cultivate communities
based on mentorship, collaboration and collective learning. This will help to create a virtuous cycle and pay-it-forward
culture where information spreads rapidly, resources are used efciently, collective knowledge is leveraged and innova-
tion occurs.
- Universities & Education: Universities should seek to work more closely with local startup communities and identi-
fy opportunities to commercialize university-developed R&D. Universities should make every efort possible to attract
world-class faculty, which should in turn result in higher quality students and better university-developed R&D.
- High-impact Entrepreneurship: Entrepreneurs need to have the right blend of training – technical know-how
as well as business acumen – to create successful startups. These entrepreneurs must have a strong risk-tolerance,
embrace failure, and see entrepreneurship as a prestigious career option.
- Funding & Capital: Investors across the continuum of funding stages are necessary. In particular, those who have
had experience building and running their own startups often make the best investors. They provide appropriate men-
torship and serve as a quality ?lter to identify the best and most viable startups.
- Incubators & Accelerators: Incubators and accelerators are meant to provide mentorship and knowledge transfer
from seasoned entrepreneurs as well as create collaboration among the diferent players within the system. Incubators
or accelerators that don’t serve as good quality ?lters can hinder startup companies that have great potential.
The world of innovation and entrepreneurship is changing. Each country, city and community can adjust for its
own characteristics and idiosyncrasies to thrive. Ultimately, the best ecosystems ofer the entrepreneur access to large
markets, capital, mentors, customers, educated employees, resources, and IP protection. Based on the geographies
that we studied, each comes up short in some respects and room remains for improvement. Those who can build
ideas and businesses quickly while overcoming the challenges that exist in each of these ecosystems will be the ones
who succeed.
The Future of Global Entrepreneurship
30 31
The Future of Global Entrepreneurship A Special Thanks to All...
China
Songbo Li
Mickey Du
Chris Evedmon
Anna Fang
Taylor Cox
David Lin
Rui Ma
Oliver Li
Qianqian Du
India
Rajesh Sawhney
Mukund Mohan
Gaurav Kachru
Pankaj Chandra
Varun Chawla
Abhishek Srivastava
Anurakt Jain
Vikram Chopra
Chile
Carolina Rossi
German Echecopar
Andrés Pesce
Alan Farcas
Cristobal Undurraga
Mauro Trigo
Nicolas Shea
Alan Ferszt
Matías Rojas
Guillermo Torrealba
Kenya
Jisas Lemasagari
Nancy Wang
Nikolai Barnwell
Kenneth Macharia
John Matogo
Erik Hersman
Tom Denton
This analysis was made possible through a series of interviews across the globe. A special thank you
to all those who took the time to share their insights with us.
30 31
Thank You
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32 33
doc_336690500.pdf
With this detailed elucidation in regard to far from silicon valley the entrepreneurial gap in emerging markets.
FAR FROM
SILICON VALLEY:
The Entrepreneurial
Gap in Emerging
Markets
A Lauder Institute Global Knowledge Lab Project
2 3
2 3
Dear Reader,
W
e are a team
whose paths coincided back in 2012 at the University of
Pennsylvania where we began the W
harton/Lauder dual-degree m
aster’s
program
. As part of this program
we were tasked with form
ing groups with
a com
m
on interest on an internationally relevant hot topic. It was a shared
curiosity for what generates thriving innovative and entrepreneurial eco-
system
s that brought us together. It’s been a wonderful journey ever since.
Early on in our discussions it becam
e clear that we could focus on
only a few cities and would need to carefully choose interesting regions
to inform
our understanding. W
e spent days researching the big players
across the globe; som
e cities stood out for having long histories of support-
ing entrepreneurs and investing in innovation. Other cities were hard to
ignore as they were gaining unprecedented m
om
entum
in entrepreneurship
and innovation .
Beijing, Bangalore, Santiago and Nairobi form
ed the com
bination
we were looking for. W
e believe that these four cities illustrate not only how
different regions around the world are approaching entrepreneurship but
also what different stages of the entrepreneurial ecosystem
can look like. W
e
traveled to each, m
et with incredible people, and becam
e all the m
ore passion-
ate about the topic and excited for what the future holds.
As you read this report, please note that unlike cooking or chem
istry,
entrepreneurial and innovative ecosystem
s can’t be created with a recipe or
form
ula; nonetheless, we identified six factors that m
ake an im
portant dif-
ference. These six factors are intended as a guiding fram
ework for thinking
about the creation of an ecosystem
that drives innovation.
W
e hope you find the inform
ation as valuable and enjoyable as we did.
Happy reading,
The Team
Content
6
10
18
30
26
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14
12 22
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K
e
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m
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p
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B
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n
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o
r
e
S
a
n
t
i
a
g
o
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a
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r
o
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T
h
e
F
u
t
u
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T
h
e
E
x
p
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r
t
s
4 5
4 5
Melissa C. Blohm
Prior to pursuing her MBA/MA Melissa spent 6 years working
as a Human Capital Consultant. There, she focused on global
implementation of technology and process solutions. Melissa
has a passion for international business challenges and has lived
and worked in Venezuela, the United States, Australia and Peru.
Melissa is in the process of establishing her own business that will
take technology hardware products to Africa. Her interest in being
a part of this project came from her strong belief that innovative
and entrepreneurial thinking in emerging markets is the key to
solving the world’s biggest challenges. Melissa is ?uent in Spanish.
David Cummins
David has always had an interest in venture capital and entre-
preneurship. Prior to Wharton, he was a member of the Draper
Fisher Jurvetson (DFJ) Growth Fund in Silicon Valley. There, he
invested in expansion-stage technology companies in the US and
China, most notably Tesla (Nasdaq: TSLA), AdMob (acquired by
Google for $750 million), and Okbuy (the “Zappos of China”).
He left DFJ to return to his entrepreneurial roots. He co-founded
Enterupt and raised $400,000 from early Skype investor, Tim
Draper. Enterupt built products in the online reputation and travel
marketplace spaces used by thousands of people. David is ?uent
in Mandarin Chinese.
Vinay Narayan
Vinay is passionate about consumer technology. He spent the
summer of 2013 helping scale a global program at eBay in Silicon
Valley. Prior to business school he worked in operational roles
across diverse industries. He has worked in India for a pre-IPO
education start-up, for the mobile marketing team at Nokia and
for the business development team at J&J, where he focused on
growing the ocular medical device category. Vinay is ?uent in
Hindi.
Dalton J. Wright
Prior to Wharton, Dalton was on the founding team of Mexico’s
leading venture capital fund, Alta Ventures Mexico, which raised
$70M to accelerate entrepreneurship in Latin America. He ?rst
gained experience in venture capital in Utah, helping build Kick-
start Seed Fund into the most active seed investor in the region.
Dalton loves entrepreneurship and co-founded a media technol-
ogy company during college which raised angel investment and
was sold to new partners. After graduating from Wharton/Lauder
he will be returning to Utah as a partner in Kickstart Seed Fund III.
Dalton is ?uent in Spanish.
Ye Ella Lu
Design Assistant
Ella has interdisciplinary design experience in graphic, product,
exhibition and architectural design. She has always had a passion
for using design to implement social changes. She has work expe-
rience in the business development department of the Solomon
R. Guggenheim Museum in New York, architecture ofces in
Shanghai, Hong Kong, and the Netherlands.
Xitong (Kacie) Nie
Research Assistant
Kacie is a sophomore at Penn, majoring in Systems Engineering
and Finance. On campus, she is the president of Global China
Connection and the social chair of International Council on
Systems Engineering at Penn. Last summer, she interned at the
investment banking division of a securities ?rm in China where
she worked on M&A deals in healthcare and hospitality. She looks
forward to embarking on a career in ?nance.
Yinyin Wu
During the summer of 2013, Yinyin worked in the account man-
agement group of PIMCO in New York City. Prior to Wharton,
Yinyin spent 5 years working at Credit Suisse, in New York and
San Francisco, where she advised corporates on liability manage-
ment transactions and technology companies on ?nancing and
M&A opportunities. Yinyin developed an interest in technological
innovation during her time living in Silicon Valley and working
with technology companies at varying stages of maturity. Yinyin is
?uent in Mandarin Chinese.
The Team
Professor Regina Abrami
Advisor
• Ph.D. in Political Science, University of California, Berkeley
• Senior Lecturer in Political Science, Senior Fellow in the Man-
agement Department, Wharton School
• Director of the Global Program at the Lauder Institute of Man-
agement and International Studies
• Previous faculty of Harvard Business School
Professor Mauro Guillén
Advisor
• Ph.D. Sociology, Yale University
• Ph.D. Political Economy, University of Oviedo
• Director of the Joseph H. Lauder Institute of Management
Studies at Penn
• Dr. Felix Zandman Endowed Professorship in International
Management at the Wharton School
• Secondary appointment as Professor of Sociology in the
Department of Sociology of the University of Pennsylvania
Executive Summary
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
community
&
culture
government
&
regulation
universities
&
education
funding
&
capital
INCUBATORS
&
ACCELERATORS
high impact
entrepreneurs
i
n
n
o
va
t
i
o
n
6 7
Overview
High-impact entrepreneurship and ecosystems for innovation are important to the ongoing and future
economic development of developed and emerging market economies alike, but what is innovation? For
the purpose of this report, we de?ne innovation as a product, service, or process invention that creates
signi?cant economic value when applied to a market opportunity.
The natural question that follows is: how does a country go about creating an ecosystem for innovation?
Experts, academics, investors, entrepreneurs and industry participants each have unique viewpoints as to
the critical elements required to stimulate and sustain high impact entrepreneurship and thriving innova-
tion ecosystems. We will summarize and highlight some of these viewpoints from global thought leaders
in more detail in this report.
Performance Criteria Factors
Based on our own research, we identi?ed six factor groups that we believe are critical actors that drive the
creation of successful high-impact entrepreneurship and innovation ecosystems. The six factors that we
considered are listed below. Later in this report, we will de?ne each respective group in more detail.
1. High Impact Entrepreneurs
2. Community & Culture
3. Government & Regulation
4. Universities & Education
5. Incubators & Accelerators
6. Funding & Capital Sources
SANTIAGO
N
A
IR
O
B
I
BANGALORE
B
E
IJ
IN
G
de?cient
nascent
evolving
excellent
world class
Culture
&
Community
Government
&
Regulation
University
&
Education
Funding
&
Capital
Incubators
&
Accelerators
High Impact
Entrepreneurs
6 7
Ecosystem Scorecard
In this report, we focus our analysis on four ecosystems that are geographically diverse and are currently at
diferent stages of development. These ecosystems include, Beijing, Bangalore, Santiago and Nairobi. We
traveled to each of these geographies in an efort to gather data, collect information and conduct primary
interviews with entrepreneurs, government ofcials, investors, corporate players and multiple other indus-
try participants. Below is a summary of how each of these respective ecosystems is performing relative to
our six-element checklist. In this report, we provide additional data, insight, performance analysis and our
speci?c suggested areas of improvement for each respective ecosystem.
Going Forward
During the course of our research it became all the more evident that innovative ecosystems are
critical to the creation of thriving and sustainable economic growth. At the same time, the world of
innovation and entrepreneurship is quickly changing. Silicon Valley is a good example of success, but
it is no longer the only model or success story. In trying to create this ecosystem, each country, city
and community must adjust for its own characteristics and idiosyncrasies. Government support, such
as through visa programs, access to permits, IP protection, and contract enforcement are a must, but
without the involvement and commitment from all six factor groups success is unlikely.
Ultimately, the best ecosystems ofer the entrepreneur access to large markets, capital, mentors, cus-
tomers, educated employees, resources, and IP protection. Based on the geographies that we studied,
each comes up short in some respects and room remains for improvement. Those who can build ideas
and businesses quickly while overcoming the challenges that exist will be the ones who succeed.
8
pools of private capital allocated to high-risk, high-re-
turn equity investments in emerging technology
companies. Venture capital has fueled much of the
world's technological advances including
microprocessors, computing, software,
telecommunications, medical devices,
biotech, clean energy, social
networking, big data and more.
Strategic
Buyers
IPO Growth/
Private
Equity
Crowdfunding:
An emerging source of capital
for startups that consists of
aggregated small contributions
from many individuals.
Venture
Capital
Angels Seed Friends,
Family
& Fools
Founder
Liquidity/Exit
Expansion
Development
Start-up
Idea
FUNDING SOURCES
BUSINESS
STAGES
multiple millions
thousands
FINANCIAL
VALUE
Accelerators
funding & Capital
incubators & accelerators
Key Terms and How We De?ne Them
We have provided the following de?nitions and frameworks to establish a common language by
which we may evaluate, compare and discuss entrepreneurial ecosystems around the world. While no
two ecosystems are identical and these de?nitions vary somewhat from region to region, the follow-
ing represents a useful starting point to understand the structure of a “typical” entrepreneurial ecosys-
tem.
pools of private capital allocated to high-risk, high-re-
turn equity investments in emerging technology
companies. Venture capital has fueled much of the
world's technological advances including
microprocessors, computing, software,
telecommunications, medical devices,
biotech, clean energy, social
networking, big data and more.
Strategic
Buyers
IPO Growth/
Private
Equity
Crowdfunding:
An emerging source of capital
for startups that consists of
aggregated small contributions
from many individuals.
Venture
Capital
Angels Seed Friends,
Family
& Fools
Founder
Liquidity/Exit
Expansion
Development
Start-up
Idea
FUNDING SOURCES
BUSINESS
STAGES
multiple millions
thousands
FINANCIAL
VALUE
Accelerators
Given the wide variation that exists between (and even within) ecosystems regarding these terminologies, we have avoided
speci?c ?gures such as investment amounts and company valuations. A venture investment in one market may look more like
a seed round in another. For the purposes of this study we have attempted to normalize the concepts based on the stage of a
company from inception through a liquidity event.
8 9
Time: longer
Money: fee-based
Cohort: rolling basis
Focus: various types & industries
Example: StartX
Incubators
Accelerators
Both ofer:
Time: shorter, condensed
Money: equity-based
Cohort: batches or groups
Focus: high growth, often tech
Example: Y-Combinator
Ofce Space
Mentorship
Early Stage Support Services
Key Terms and How We De?ne Them
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
crowdfunding
an emerging source of
capital for startups that
consists of aggregated small
contributions from many
individuals. Driven by
recent changes in U.S.
securities law to allow small
“unaccredited investors” to
purchase stock in private
companies, the emerging
crowdfunding market may
affect how startups raise
early-stage capital.
community
& culture
government
& regulation
universities &
education
funding
& capital
INCUBATORS
& ACCELERATORS
high impact
entrepreneurs
i
n
n
o
va
t
i
o
n
Entities that provide support to very
early-stage companies including office
space, internet access, mentoring,
networking, accounting and legal
services. The primary difference
between an incubator and accelerator
is the business model they pursue;
incubators tend to accept a variety of
startups and charge a monthly fee for
services while accelerators seek only
high-growth potential companies
and share risk by making small
equity-linked invest-
ments.
A multitude of private and public sources by which
entrepreneurs can obtain funding. Angel investors, seed
funds and venture funds allocate capital to high-risk,
high-return equity investments in emerging
companies. In addition to capital, investors offer
relationships, guidance and services to
portfolio companies in an effort to increase
valuations and generate returns through
acquisition or IPO. Successful
venture funds are an indicator
of a healthy entrepre-
neurial ecosystem.
Private and public institutions of higher education that
build networks of skilled people including engineers,
scientists, designers and businesspeople from around
the world. This diversity of talent and experience
enables the cross-pollination of ideas necessary
for innovation. Research universities also
house advanced labs with scholars who
produce breakthrough inventions that
can be commercialized through
technology transfer to
startup companies.
Effective government policy that
reduces barriers to entrepreneur-
ship and encourages innovation,
investment and new venture
formation. Successful ecosystems
tend to have laws that guarantee
property rights, enforce business
contracts, protect intellectual
property and incentivize
investment while avoiding
bureaucratic friction or making
direct investment decisions.
Engaged people building trusted,
informal networks with established
norms that encourage collaboration,
sharing, learning, research, exploration,
risk-taking and entrepreneurship. Culture is the
elusive, intangible element that causes entrepre-
neurial ecosystems to thrive when other necessary
ingredients are present. Visionary entrepreneurs in
the emerging ecosystem are usually the
organizers of the community and
drivers of its culture.
An entire ecosystem built to support
entrepreneurs as they attempt to solve large,
pressing problems through innovative, scalable
technologies and business models. Entrepreneurs in
thriving ecosystems create new industries, disrupt
incumbent enterprises and generate new growth that
results in high-paying jobs for skilled workers, an elevated
standard of living in the region and creative solutions that
advance what is possible in the world.
There is a different type of entrepreneurship often
referred to as “needs-based” entrepreneurship.
This report does not address this
type of entrepreneur-
ship.
What do we mean by innovation?
The study of innovation has produced dozens of defnitions. Sub categories can
include disruptive, breakthrough and incremental innovation as well as prod-
uct, process and business model innovation. For the purpose of this study we
have defned innovation as a product, service or process invention that creates
signifcant economic value when applied to a market opportunity.
We believe there are six factors that drive the creation of
successful innovative and entrepreneurial environments.
8 9
What Some Experts Say...
Paul Graham
Entrepreneur, technolo-
gist, investor, & founder
of Y-Combinator
• The people, not the buildings, make Silicon Valley. A ?rst-rate university in a city where nerds and
investors want to live is the organic way to attract the right kind of people to build an innovation ecosystem.
• Entrepreneurs are hackers. Hackers are makers, not just engineers and scientists. People who break rules are
the source of American’s wealth and power. Determination, ?exibility, imagination, and strong friendship
are the key attributes of entrepreneurs.
• A society in which people can do and say what they want will also tend to be one in which the most
efcient solutions win, rather than those sponsored by the most in?uential people.
• Within the US, there are no technology hubs without frst-rate universities. So if you want to make a Silicon Valley,
the university has to be a magnet, drawing the best people from thousands of miles away.
• Start-up investors tend to have a lot of experience themselves in the technology business. This helps them pick
the right startups, and means they can supply advice and connections as well as money.
• Y-Combinator is a start-up boot-camp that serves as a quality ?lter and provides entrepreneurs with seed
funding, one-on-one mentorship from experienced entrepreneurs, investor introductions, and a high-quality sup-
portive alumni community.
For sources, see bibliography items 33-36.
Daniel Isenberg
Prof. of entrepreneurship at
Harvard, Columbia, and Bab-
son, advisor, investor, author
& entrepreneur
• Leaders are the entrepreneurs who lead the com-
munity, and Feeders are the support system that
are comprised of the government, universities, investors,
mentors, service providers and large companies. The
entrepreneurial community needs grass-roots activities
started by entrepreneurs that bring together the players.
• The main cultural attributes that are essential to Silicon
Valley are - Give before you get, (“pay it forward” cul-
ture.) Everyone is a mentor, so share your knowledge
and give back. Embrace weirdness.
• Entrepreneurs need to be committed to their
region for the long term (20+ years), the community and
its leaders must be inclusive, play a non-zero sum game,
be mentorship-driven and be comfortable experimenting
and failing fast.
• Top-down government driven clusters are not the most
efective. There is a disconnect between entrepre-
neurs and governments, such that entrepreneurs are
self-aware and bottoms up while governments are un-
aware and macro-focused.
• Schools like MIT and Stanford are “outward facing”
research universities that act as community cata-
lysts, a magnet for entrepreneurial talent for the region,
teachers, and a pipeline for talent back into the region.
Their research ofers a continual stream of new
technologies to be commercialized.
• Accelerators (such as Tech Stars) should be men-
tor driven. Entrepreneurs learn best from other entre-
preneurs.
For sources, see bibliography items 56-58.
Brad Feld
Entrepreneur, investor,
author & co-founder of Tech
Stars
10 11
• Governments often focus on reforming “legal, bureaucratic and regulatory frameworks” or on building
expensive technology clusters, however launching ecosystems requires a more holistic approach.
• Public leaders should “stop emulating Silicon Valley” and instead “shape the ecosystem around
local conditions.” The ambition to become another Silicon Valley sets governments up for “frustration and
failure” while they should be focused on their own unique strengths and opportunities.
• Public eforts must “engage the private sector from the start” and have a clear exit strategy as
the ecosystem becomes viable. “Only the private sector has the motivation and perspective to develop
self-sustaining, pro?t-driven markets.”
• Instead of spreading out resources broadly, governments should focus on “growth-oriented entre-
preneurs (not necessarily tech) who address large potential markets.”
• Don’t “?ood high-potential entrepreneurs with easy money” when they need to be tough and
resourceful. There is “scant support that expensive incubator programs contribute commensurately to
entrepreneurship.”
• “Get a big win on the board” and “over-celebrate the success.” This has a “stimulating efect on the
ecosystem by igniting the imagination of the public and inspiring imitators.”
• Although difcult, governments must “tackle cultural change head-on” to “alter social norms about
entrepreneurship.” Shifts can be made in as little as a decade and media eforts can help shape attitudes.
For sources, see bibliography items 41.
• “Silicon Valley’s informal social relationships supports experimentation and cre-
ates a more ?exible regional network-based industrial system that promotes collec-
tive learning, encourages risk taking, embraces failure, and enables information to
spread quickly.”
• “Entrepreneurs are measured by what they are currently doing. The stigma of
failure is depersonalized, so entrepreneurs are free to challenge the status quo,
break with tradition, and innovate in areas where most say it cannot be done.”
• “The US Government channeled resources to universities (e.g. MIT, Stan-
ford) to develop technologies for the Second WW and Cold War. These resources
were the seeds of developing an innovation ecosystem.”
• “Stanford forged a close working relationship between the engineering school
and local technical ?rms. The formation of the Stanford Industrial Park in 1951 pro-
vided a mechanism for transferring technology from university laboratories to
the nearby commercial ?rms.”
• “Venture capital replaced military contracts as the main source of capital.
Many VCs were previously successful entrepreneurs who brought operating experi-
ence, technical expertise, contacts, & capital to Silicon Valley.”
For sources, see bibliography items 54-55.
Annalee Saxenian
Prof. and Dean of the
UC Berkeley School
of Information
10 11
• Governments often focus on reforming “legal, bureaucratic and regulatory frameworks” or on building
expensive technology clusters, however launching ecosystems requires a more holistic approach.
• Public leaders should “stop emulating Silicon Valley” and instead “shape the ecosystem around
local conditions.” The ambition to become another Silicon Valley sets governments up for “frustration and
failure” while they should be focused on their own unique strengths and opportunities.
• Public eforts must “engage the private sector from the start” and have a clear exit strategy as
the ecosystem becomes viable. “Only the private sector has the motivation and perspective to develop
self-sustaining, pro?t-driven markets.”
• Instead of spreading out resources broadly, governments should focus on “growth-oriented entre-
preneurs (not necessarily tech) who address large potential markets.”
• Don’t “?ood high-potential entrepreneurs with easy money” when they need to be tough and
resourceful. There is “scant support that expensive incubator programs contribute commensurately to
entrepreneurship.”
• “Get a big win on the board” and “over-celebrate the success.” This has a “stimulating efect on the
ecosystem by igniting the imagination of the public and inspiring imitators.”
• Although difcult, governments must “tackle cultural change head-on” to “alter social norms about
entrepreneurship.” Shifts can be made in as little as a decade and media eforts can help shape attitudes.
For sources, see bibliography items 41.
Checklist for Creating Entrepreneurial Environments
Culture & Community
An innovation ecosystem that is based on communities and cultures
that encourage risk-taking, embrace failure, promote collective learning,
engage in information sharing, and openly provide mentorship.
High Impact Entrepreneurs
People with pioneering spirits who are willing and able to challenge the
status quo, possess imagination, experiment with seemingly crazy ideas,
and are unafraid of failure are critical for innovation ecosystems.
Government & Regulation
Governments that help cultivate innovation ecosystems by making it
easy to start/close a business, enabling domestic and foreign talent to
?ow freely, being an early customer of young start-ups, and providing
legal infrastructure that promotes IP protection and a fair playing ?eld.
Universities & Education
Universities that attract the best talent globally and develop working re-
lationships with local technology companies that help to commercialize
university R&D. No technology hubs exist without ?rst-rate universities.
Funding & Capital
Investors who are former technology entrepreneurs and operators and
can provide young startups with contacts, advice, technical understand-
ing, and capital. A large number and variety of investors across the
funding continuum is necessary.
Incubators & Accelerators
Incubators and accelerators that serve as quality ?lters, provide young
companies with a small amount of capital and, more importantly, that
provide seasoned mentorship.
Factors Qualities
12
Snapshot of High Impact Entrepreneurship Globally
12 13
brazil
chile
united states
sao paulo
santiago
san francisco
europe
london
south africa
cape town
5
incubators &
accelerators
313.9 million population
1.5%
GDP growth
$50,000
per capita income
$11.2 billion
venture investment
>1,000
active angel investors
20
incubators &
accelerators
254 million internet users
San Francisco
san
tiago
17.5 million population
4.6%
GDP growth
$10-15 million
venture investment
>30 active
angel investors
4
incubators &
accelerators
11 million internet users
$15,000
per capita income
sao paulo
201 million population
2.4%
GDP growth
$11,000
per capita income
>100
active angel investors
4 incubators &
accelerators,
7 coworking spaces
89 million internet users
0.3%
GDP growth
$33,000
per capita income
$1.8 billion venture investment
>60 active
angel investors
17
incubators &
accelerators
504 million internet users
london
49 million population
3%
GDP growth
$7,500
per capita income
$30-35 million
venture investment
20 active angel investors
14 million internet users
591 startups
4465 startups
>300 startups
336 startups
60 startups
739 million population
new york
$1 billion venture investment
Snapshot of High Impact Entrepreneurship Globally
new Delhi
12 13
49 million population
3%
GDP growth
$7,500
per capita income
14 million internet users
cape town
1.4 billion population
7.1%
GDP growth
$6,000
per capita income
$1.5 billion
venture investment
200 active angel
investors
5
incubators &
accelerators
>1000 startups
386 startups
>500 startups
50 startups
568 million internet users
china
israel
india
kenya
beijing
tel aviv
bangalore
nairobi
beijing
shanghai
mumbai
1.2 billion population
3.2%
GDP growth
$1,500
per capita income
> $300 million
venture investment
32 active angel investors
20
private
incubators &
accelerators
152 million internet users
bangalore
43.2 million population
5.7%
GDP growth
$1,000
per capita income
very few
active angel investors
10
incubators &
accelerators
14 million internet users
Cities this report focuses on
Other notable innovative and entrepreneurial cities
For sources of data see bibliography items 37, 38, 39, 40
nairobi
$3-5 million venture investment
7.9 million population
3.6%
GDP growth
$31,000
per capita income
$1 billion venture investment
15 active angel investors
5.8 million internet users
15 incubators &
accelerators,
9 coworking spaces
tel aviv
funding
& capital
INCUBATORS
& ACCELERATORS
i
n
n
o
v
Beijing’s Innovation Ecosystem Forges Ahead
Beijing is the most developed innovation ecosystem out of the four that we analyzed, boast-
ing sufcient available investment capital, a sizeable addressable market, a large pool of
talent, and a supportive government. In order for Beijing’s innovation ecosystem to
continue its development, the ecosystem still needs increased mentorship by experi-
enced entrepreneurs, improved community transparency and information sharing,
more angel investors, closer relationships between universities, R&D, and local
startups, less taboo around failure, and continued education reform.
Approximately 50-60% of the frst generation of
high impact entrepreneurs in China received edu-
cation and/or work experience in Silicon Valley. More
recently, entrepreneurs tend to be born, raised, and edu-
cated in China. Given the intense competitive nature of the
Internet industry, investors seek to invest in entrepreneurs
who have 3-10 years of work experience and domain
expertise, a stark contrast to the US where many
Internet entrepreneurs are university
students or recent graduates.
Beijing’s incubators and accelerators
are fragmented and tend to produce
lower quality companies than their
US counterparts. This is largely driven
by the fact that many incubators and
accelerators lack the relevant collab-
orative communities and experienced
mentorship of Silicon Valley accelera-
tors such as Y-Combinator. As a result,
many incubators and accelerators
tend to attract companies primarily
looking for capital, as opposed to
mentorship and strategic guidance.
China is the 2nd largest venture market in the world at
~20% of the size of the US. $3.7B was invested in 202
deals in 2012 and $6.3B was invested in 362 deals in
2011. The frst 10 years of the VC industry was dom-
inated by Silicon Valley venture funds. Over the past
5-7 years an increasing number of domestic Chi-
nese venture funds have been raised. China only
has about ~300 hundred angel investors,
compared to 30,000 in the US. Most
investment activity occurs in the
mobile, ecommerce, gaming,
content, cloud, and educa-
tion industries.
14 15
“We haven’t funded a single company coming
out of an accelerator due to the low quality.”
–Mickey Du, Innovation Works
2014 2004 1994 1984
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Zhongguancun, “China’s Silicon Valley” is established in Beijing
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up incubator, Innovation Works, is launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
1984 1988 1998 2000 2003
Venture Fund: Innovation Works (IW)
was was founded in 2009 by Dr. Kai-Fu Lee.
Dr. Lee was previously the head of
Google China. IW started as an incubator but evolved into
a venture capital fund. Today, IW has more than $500M in
assets under management and has invested in more than
60 startups. IW provides its entrepreneurs with funding
and value-added services.
Seed Fund: ZhenFund was founded
in 2006 by Xu Xiaoping. Mr. Xu was a
co-founder of New Oriental (NYSE: EDU), China’s largest
education company. Mr. Xu has made over 80 angel
investments before teaming up with Sequoia on ZhenFund
2.0. ZhenFund has made 60 seed investments to date
and plans to invest in 80-100 companies from 2012-2014.
ZhenFund’s average investment size is $300k.
Angel: Lei Jun is one of China’s most
proli?c technology entrepreneurs and
in?uential angel investors. He most
recently founded Xiaomi, a low-cost smartphone provider
valued at more than $10B. Lei Jun has made countless
angel investments in companies such as YY (Nasdaq: YY),
UCWeb and Vancl.
2004
beijing
high impact
entrepreneurs
v
community
&
culture
government
& regulation
universities &
education
-
.
Historically China has
had to wrestle with widespread fear of
failure, a general mistrust of others, lack of
experienced mentors, little market transpar-
ency, limited open collaboration and a lack of
data-driven decision-making processes. The “if you
win, I lose” mentality is still widespread. The above-
mentioned soft elements of an innovation ecosystem
are the critical factors of Silicon Valley’s
success. Beijing’s ecosystem would be
well-served to continue im-
provements in all of
these areas.
The Chinese government has made
efforts to stimulate high-impact en-
trepreneurs for 20 years. These ef-
forts started by building high-tech
parks in Beijing 15 years ago. More
recently, local governments have
started becoming Limited Partners
in venture funds and cooperating
with VCs to invest directly in startups.
Policies aimed at continuing education
reform, enhancing IP protection, and
lowering the costs of starting
businesses will greatly ben-
eft the evolution of
Beijing’s eco-
system.
According to estimates, China produces 70% more engineer-
ing graduates than the U.S., but less than 20% of China’s
engineering graduates are globally employable. China’s top
engineering school, Tsinghua University, does produce
world-class talent and is located close to Zhong-
guancun, China’s Silicon Valley, in Beijing. The
government must strike a delicate balance
between continued education reform and
being equitable to all. Easier university
technology commercialization and
closer relationships with local
startups would be a step in
the right direction.
Yanhong “Robin” Li was born in China and educated at the
University at Bufalo. He previously worked at Infoseek in Sili-
con Valley. Robin co-founded Baidu (the “Google of China”) in
2000. Today Baidu has a market capitalization of $56B. Robin
is one of the richest people in China with a net worth
of $6.9B.
Yun “Jack” Ma was born in China. Jack founded Alibaba Group
in 1999, which includes Taobao (the “eBay of China”) and Alipay
(the “PayPal of China”). Taobao controls 80% of the ecommerce
market in China. Taobao is estimated to be worth $100B and is
expected to IPO in 2014. Jack Ma has a net worth of $3.4B.
Huateng “Pony” Ma was born and educated in China. In 1998, Pony co-found-
ed Tencent, China’s largest gaming, social networking, and communications
site. Tencent has a market capitalization of $100B, making it more valuable
than McDonalds. Pony is the 4th richest person in China with a net worth
of $6.8B.
Tencent is China’s largest online
media and entertainment company
Taobao is an ecommerce juggernaut Baidu dominates Chinese search
14 15
2014 2004 1994 1984
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Zhongguancun, “China’s Silicon Valley” is established in Beijing
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up incubator, Innovation Works, is launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
2004 2005 2009 2010 2013 2014
“In Silicon Valley, failure is accepted as part of the learning
process for an entrepreneur. In China, failure is viewed more
as a stigma, but this is slowly changing for the better.”
–David Lin, Microsoft Accelerator
“There is too little knowledge dissemination to date in China.
We hope this changes, but it will take time.”
–Chinese VC
“The key to working with the government is to develop the
relationship and trust…and not to lose their money.”
–Chinese VC
“Conventional Chinese education has a disproportionate focus on
‘what’s the right answer’ and not enough attention is paid to ‘how do
you get to the right answer.’”
–Rui Ma, 500 Startups
beijing
Beijing’s Entrepreneurial Ecosystem Today
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
excellent
de?cient world
class
excellent
16
Factors for Creating Entrepreneurial Environments
Culture & Community
Beijing’s startup ecosystem still lacks a widespread community that
embraces open information sharing, no-strings-attached mentorship,
cross-company collaboration, and collective learning. A “if you win, I
lose” mentality persists. While the taboo of failure is slowly fading, a
culture of embracing failure as a necessary path to innovation has yet to
be fully adopted.
High Impact Entrepreneurs
Chinese entrepreneurs are arguably somewhere between excellent and
world class. Not only have they shown an ability to scale large successful
businesses (e.g. Taobao, Baidu), but they have also shown an ability to
compete against foreign competitors in China (e.g. Google, eBay). Chi-
nese entrepreneurs are rapidly moving beyond simply copying foreign
business models to developing their own models and scaling companies
beyond China.
Government & Regulation
While the government’s initial attempts to stimulate high-impact entre-
preneurship by developing high-tech parks was met with limited success,
the government has played a key role in attracting foreign capital, open-
ing China’s Internet market up to competition, providing investment
capital to domestic VCs and startup companies and ofering incentives
to young companies.
Funding & Capital
Beijing’s venture capital infrastructure is well developed. The ?uid and
relatively easy access to investment capital has been a key component
in helping entrepreneurs to fuel their growing companies. While 90% of
investor exits to date have been via IPOs, the M&A ecosystem in China
has started to provide investors with additional exit avenues, which, in
turn, is creating a virtuous investment cycle.
Incubators & Accelerators
The primary purpose of incubators and accelerators in Silicon Valley is
to provide their entrepreneurs and companies with access to seasoned
entrepreneurs who are willing to mentor, collaborate, and share their ex-
periences with young entrepreneurs. While this mentor-driven commu-
nity is a key element of the fabric of Silicon Valley, it has yet to take hold
in a major way in Beijing.
Universities & Education
The world’s most innovative and productive startup ecosystems are
located near ?rst-rate universities. China’s premiere technical universi-
ty, Tsinghua University, ranks #50 globally. In contrast, Harvard, MIT,
Stanford, Caltech, and Berkeley each rank in the top 10 globally and are
located near innovation hubs. Chinese universities lag far behind their
US counterparts when it comes to attracting the best foreign students
and faculty, equipping students with practical industry-ready skills, and
facilitating the interaction between university R&D activities and the
surrounding commercial enterprises.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
17
Recommendations for the Future
Culture & Community: Beijing should strive to cultivate a startup community based on mentorship, collaboration
and collective learning. The secret to a thriving startup ecosystem is the people, not the physical infrastructure. Successful
Chinese entrepreneurs are best-positioned to drive this initiative in a no-strings-attached manner by openly sharing their
experiences, mentoring young entrepreneurs, advising immature startups, and investing some of their wealth back into the
ecosystem. Over time, this will result in a pay-it-forward culture where information spreads rapidly, resources are used ef-
ciently, collective knowledge is leveraged and innovation occurs.
High Impact Entrepreneurs: The wealth generated by large-scale exits should be
spread among as many employees as possible. While stock options are still a new phenomenon in
Beijing, entrepreneurs should ensure that company stock options are granted to every employee.
That way, when large-scale exits occur, as many people as possible get rich. By doing this, more
of the wealth created by successes is likely to be reinvested back into the ecosystem in the form
of new products built, technology developed, companies started and jobs created.
Government & Regulation: While the government’s initial attempts to stimulate high-impact entrepreneurship by
developing high-tech parks was met with limited success, the government has played a key role in attracting foreign capital,
opening China’s Internet market up to competition and providing investment capital to domestic VCs and startup compa-
nies. We think the government has room for improvement on IP protection and making it easier for entrepreneurs to start
and close young businesses.
Universities & Education: Beijing universities should actively recruit the best technical professors and students
globally and incentivize them to teach and receive their educations in China. Better professors are likely to attract higher
caliber students, which will produce better R&D. Additionally, universities should actively seek to work more closely with the
startup community and identify opportunities to commercialize university-developed R&D. These eforts will likely increase
the number of high impact ventures that are developed and launched at Chinese universities, which will then attract more
talented faculty and students, creating a virtuous cycle.
Incubators & Accelerators: Beijing incubators and accelerators should reposition their primary value-add as provid-
ing strategic mentorship and guidance as opposed to merely supplying investment capital. Developing a more open commu-
nity based on shared learning and mentorship will better enable incubators and accelerators to attract mentors with relevant
experience who share these values. Most companies in Beijing fail due to operational and strategic mistakes rather than a lack
of capital. Mentorship, rather than capital, is one of the largest voids in Beijing’s startup ecosystem today.
beijing
Beijing is the most well-developed startup ecosystem that we analyzed. It includes a large domestic market, a vast domestic
talent pool, wide access to investment capital and a deep understanding of Chinese consumers. However, challenges remain. We
have identi?ed a number of speci?c areas of improvement that will bene?t the continued evolution of Beijing’s startup ecosys-
tem.
Incubator: Startup Village is a public-private
partnership with India’s Department of Sci-
ence and Technology in the southern Indian
state of Kerala. It was created to incubate 1000 startups over 10
years. Most companies incubated are from college campuses.
Accelerator: GSF Accelerator was established
in 2011 by former Reliance Entertainment
CEO, Rajesh Sawhney. It follows a Y-Combina-
tor-like cohort system and provides companies with seed capital
($27,000 for 8% equity), mentorship, product development, and
help raising additional capital. GSF acknowledges that its approach
must be adapted to India’s markets in order to remain relevant.
Angel: Rajan Anandan is a prolifc angel investor in Internet, mobile
and SaaS start-ups. He is the current VP of Google India, and his in-
vestments include Capillary Technologies, SocialBlood, and StepOut.
He invests $10,000-$50,000 per company and is well respected for
his domain expertise.
Seed Fund: Blume Ventures was co-founded
by Wharton alum Karthik Reddy. Blume man-
ages $20M and invests $100,000-300,000 in
pre-Series A companies across the Internet, mobile and digital me-
dia spaces.
funding
& capital
INCUBATORS
& ACCELERATORS
high impact
entrepreneurship
i
n
n
o
v
Bangalore’s Innovation Ecosystem Begins to Evolve
Bangalore is the second largest startup ecosystem that we analyzed. Bangalore has
a large pool of technical talent, a growing network of VCs and angel investors, a
supportive state government and a generation of entrepreneurs who are increas-
ingly willing to take risks earlier in their careers. However, challenges remain,
including the taboo of failure in Indian society, a limited exit environment,
willing but inefcient government support of startups and an investing
community that often views their relationships with startups merely
as ?nancial transactions as opposed to partnerships.
Indian entrepreneurs are comprised of frst-time
entrepreneurs with 3-10 years of full-time work
experience (60%), serial entrepreneurs (15%), developers
(10%), internationally educated Indian returnees (10%), and
student entrepreneurs (5%). Indian startup entrepreneurs tend
to be more technical but lack the “hacker” mentality of their
US counterparts. Over the past 10 years, Indian entrepre-
neurs have started 10-20% of new ventures in Silicon
Valley. Unsurprisingly, returnees are the most
attractive entrepreneur segment to
early-stage investors.
The new wave of incubators and accel-
erators was started two years ago and is
markedly different from older incuba-
tors that have existed in elite colleges
for many years. They provide startups
with active mentoring and technical
guidance as startups prepare to raise
capital. The incubators and accelerators
are market-oriented and privately funded.
Most incubators and accelerators have
global ambitions for their cohorts, despite
India’s sizeable domestic market. Leading
accelerators include GSF Accelera-
tor (Delhi), Microsoft Accel-
erator (Bangalore) and
Start-up Village
(Kochi).
More than $1B was invested in Indian startup
companies in 2012. Accelerators and incubators
invest $20,000-50,000, seed funds and angel groups invest
$100,000-1M, and early-stage VC funds invest $1-10M.
India’s limited exits and small multiples paid by ac-
quirers has driven the explosion of incubators and
accelerators, many of which are providing capital
at more equitable terms. India’s diffcult exit
environment is the biggest negative factor
impacting the ecosystem. This has
caused some experienced entre-
preneurs to diversify by starting
accelerators, as opposed to
starting new ventures.
18 19
“58% of incubator and accelerator-backed startups die in the ?rst 18
months of operation”-Mukund Rajan, Microsoft Accelerator
“We want to seed companies that will have a global footprint”
-Rajesh Sawhney, GSF Accelerator
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Five more IITs launched in Madras, Kanpur, Delhi and Bombay
First national incubator in Indian Institute of Technology,Mumbai
The World Bank and ICICI Bank fund more than 50 SMEs
First Indian Institute of Technology (IIT)
launched in Kharagpur
Vishnu Varshney is selected to run the Gujarat Venture Fund
The Indian Angel Network is established
Blume Ventures, India’s ?rst seed fund, is launched
Travel site, Makemytrip, IPOs on the Nasdaq
(worth $600M today)
GSF Superangels launches an accelerator
Startup Village aims to incubate 1,000 startups over 10 years
Local search company, JustDial, IPOs in Bombay
Government launches 10,000 startups initiative
Naspers acquires ticketing portal, Redbus, for $130M
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Baidu goes public on the Nasdaq
(worth $55B today)
1950 1960 1980 1990 1995 2006 2009 2010 2011 2012 2013
1950
1960s 1980s 1990 1999
bangalore
v
Bangalore’s Innovation Ecosystem Begins to Evolve
Indian entrepreneurs are comprised of frst-time
entrepreneurs with 3-10 years of full-time work
experience (60%), serial entrepreneurs (15%), developers
(10%), internationally educated Indian returnees (10%), and
student entrepreneurs (5%). Indian startup entrepreneurs tend
to be more technical but lack the “hacker” mentality of their
US counterparts. Over the past 10 years, Indian entrepre-
neurs have started 10-20% of new ventures in Silicon
Valley. Unsurprisingly, returnees are the most
attractive entrepreneur segment to
early-stage investors.
community
& culture
government
& regulation
universities &
education
a
t
i
o
n
-
.
The vast majority of India’s
middle class continues to
remain risk averse and failure is still
taboo in Indian society. However, risk
appetites are slowly increasing among young
professionals with 3-10 years of professional
experience. Successful returnees and Indian en-
trepreneurs are showing signs of a willingness to
share their experiences and mentor
the next generation of
Indian entrepre-
neurs.
The earliest government effort to
provide venture capital to the small
enterprise sector occurred in the ‘80s.
In 2013 the government launched an
initiative called “10,000 Startups” to
provide startups with $25,000 worth
of products and services. Government
restrictions on foreign investment in
and ownership of local companies has
hurt the ecosystem. Most government
offcials don’t understand the Internet,
which is one reason why regula-
tions remain hazy around
things like ecommerce.
India’s Department of Science and Technology has
traditionally provided funding to over 100 accredited uni-
versities to incubate technology startups. India’s most
elite technical and management universities have active
incubator programs. However, while technically sav-
vy, many of the startups at university incubators
lack the mentoring and fnancial support
necessary to commercialize. The role of
Indian universities in helping bright,
enterprising students start and
scale new businesses remains
limited.
18 19
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
Five more IITs launched in Madras, Kanpur, Delhi and Bombay
First national incubator in Indian Institute of Technology,Mumbai
The World Bank and ICICI Bank fund more than 50 SMEs
First Indian Institute of Technology (IIT)
launched in Kharagpur
Vishnu Varshney is selected to run the Gujarat Venture Fund
The Indian Angel Network is established
Blume Ventures, India’s ?rst seed fund, is launched
Travel site, Makemytrip, IPOs on the Nasdaq
(worth $600M today)
GSF Superangels launches an accelerator
Startup Village aims to incubate 1,000 startups over 10 years
Local search company, JustDial, IPOs in Bombay
Government launches 10,000 startups initiative
Naspers acquires ticketing portal, Redbus, for $130M
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Baidu goes public on the Nasdaq
(worth $55B today)
1950 1960 1980 1990 1995 2006 2009 2010 2011 2012 2013
bangalore
2011 2009 2010 2006 2012 2013
Mr. Bikchandani was educated at the Indian
Institute of Management in Ahmedabad. He
co-founded InfoEdge, a provider of salary survey reports. Sub-
sequently, he started Naukri.com, India’s ?rst and now largest
domestic online job portal. Naukri went public in 2006 on the
Bombay Stock Exchange, raising $34M at $160M valua-
tion, making it one of India’s ?rst Internet IPOs.
Deep Kalra is an alumnus of the Indian
Institute of Management, Ahmedabad.
Prior to becoming an entrepreneur he worked as a VP at
GE in India. Mr. Kalra founded MakeMyTrip.com, In-
dia’s largest online travel site, in 2000. The compa-
ny launched in India in 2005 and went public
in the US (NASDAQ: MMYT) in 2010.
MakeMyTrip has a market value of
$600M today.
Sanjeev Bikchandani
Sabeer Bhatia
Phanindra Sama
Mr. Bhatia was educated in India and at Stanford. He
brie?y worked for Apple early in his career. Mr. Bhatia
co-founded Hotmail in 1996. He achieved celebri-
ty status in India when he sold Hotmail to Microsoft in 1998 for
$400M in stock. He has a personal net worth of over $100M.
In 2006, Phanin-
dra Sama co-found-
ed redBus, an Indian travel booking
site. In 2013, redBus was acquired by
South Africa-based Internet group
Naspers and Chinese Internet giant
Tencent, for an estimated $125M.
This acquisition is hailed as an im-
portant exit milestone for Indian
VCs.
Deep Kalra
“It is unfair to compare the start-up ecosystems in Bangalore and Silicon
Valley- their realities are diferent.”
-Indian VC
“The risk/reward pro?le for smart people to do startups isn’t there given the
limited exit environment. The alternative to a startup is a $100k/year steady
job.” -Mukund Rajan, Microsoft Accelerator
“It is important to understand ‘what’ the policy is today and ‘how do I efec-
tively operate within the context of the system, because changing policy is
hard.” -Indian VC
“The Indian Government hurts more than it helps the startup ecosystem, but
they have largely stayed out of the way.”
–Indian VC
“The Indian start-up ecosystem is still missing quality mentoring and capital in the
$100,000-$300,000 investment range”
-Indian Seed Investor
Bangalore’s Entrepreneurial Ecosystem Today
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
evolving
20
Factors for Creating Entrepreneurial Environments
The vast majority of India’s young technical and managerial talent
belongs to a risk-averse middle class that favors career stability over
potential professional risk at startups. The startup community still has
room for improvement in cultivating mentorship, increasing ecosystem
collaboration and enhancing partner-centric relationships with investors.
High Impact Entrepreneurs
Indian entrepreneurs possess world-class technical talent and managerial
capabilities. They are generally highly educated, motivated and have
global ambitions for their startups. Indian entrepreneurs could bene?t
from placing more emphasis on achieving domestic success initially
before seeking to expand their businesses globally.
Government & Regulation
The Indian government has initiated large-scale eforts to provide capi-
tal to entrepreneurs. These eforts are often inefcient, partly driven by
the government’s inability to identify the best entrepreneurs and accel-
erators to support. The government has struggled to encourage tech-
nology entrepreneurship outside IT services. Regulations have made
it difcult for angel investors to operate, hindered the ability of foreign
capital to ?ow into India, and discouraged the investment and M&A
activities of foreign companies in India.
Funding & Capital
Many of India’s venture capitalists lack the startup experience and
mentorship capabilities that are critical to startups. The limited exit en-
vironment in India has compelled some Indian investors to place overly
onerous terms on entrepreneurs and attempt to ?ip their stakes to other
investors in an efort to make their fund economics viable. While slowly
changing, there are far too many inexperienced former investment
bankers and corporate executives acting as investors.
Incubators & Accelerators
Privately funded incubators and accelerators in India are relatively new to
the ecosystem and have greatly increased access to early stage mento-
ring and capital for promising startups. The best accelerators are run by
professionals with successful operating track records. Accelerators are
tailoring the Silicon Valley model to ?t the Indian market to efciently
identify, nurture and scale young companies.
Universities & Education
The earliest incubators in India at elite engineering and management
colleges yielded few commercial successes. The interface between
university R&D and commercial enterprises lags far behind that of the
US. Low quality faculty, outdated curricula and weak market interest in
student-initiated ventures plague the future of entrepreneurship emerg-
ing from India’s higher education institutes.
Culture & Community
de?cient world
class
evolving
de?cient world
class
excellent
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
21
Looking to the Future
Culture & Community: Bangalore needs to strive to create an environment conducive to risk-taking and an atti-
tude more tolerant of failure. India needs more successful Indian entrepreneurs who can be role models for new startups and
provide mentoring and capital. Successful Indian entrepreneurs should lead the way for promoting entrepreneurship in the
country. Greater knowledge sharing and shared learning among startups and investors will yield more successful outcomes.
Government & Regulation: The Indian Government needs to partner more efectively with leading incubators and
accelerators to identify quality startups that can be ?nanced. It needs to create and enforce stringent laws around IP protec-
tion, provide tax incentives to early stage companies and their investors, relax restrictions on foreign investment and acquisi-
tions and increase broadband connectivity throughout the country.
Universities & Education: Indian engineering and management colleges need to invest in hiring and retaining
world class faculty who conduct research that has greater relevance to industry in the areas of computer science, electrical
engineering and management ?elds. Universities need to enhance collaborations between university R&D and incubation
activities and Bangalore’s broader technology ecosystem. Additionally, the elite institutes in India stand to gain from tapping
into the vast pool of global and domestic alumni who can act as role models and mentors to improve the quality of startups
incubated in universities.
Incubators & Accelerators: Applicant quality has been a major struggle for India’s incubators and accelerators to
date. Incentivizing experienced entrepreneurs to participate in the initial ?ltering and subsequent mentoring processes will
help to attract higher quality entrepreneurs and improve the quality of companies. Incubators and accelerators should also
assist their companies in negotiating investment terms that are in the best long-term interest of the companies.
Bangalore has a rapidly evolving innovation ecosystem that is market-driven, possesses a large network of educated technol-
ogy-savvy entrepreneurs and boasts a growing network of investors. Bangalore still faces structural challenges that hinder the
consistent creation of large successful companies that we see in Silicon Valley and even Beijing. There are a number of steps that
can be taken to improve the state of Bangalore’s innovation ecosystem:
High Impact Entrepreneurs: Indian entrepreneurs need to focus on building inno-
vative products and services tailored to the Indian market. There is a need for active involve-
ment of successful entrepreneurs to advise and ?nance startups as they scale. This will create
an environment where large exits are possible through IPOs. Improved regulations around
foreign investments and acquisitions will likely increase the number of exits through M&A.
bangalore
funding
& capital
INCUBATORS
& ACCELERATORS
i
n
n
o
v
Santiago’s Ecosystem Rumbles to Life
Santiago is beginning to see the fruits of its
ecosystem development efforts with initial exits in
sectors such as data services (AxonAxis by Equifax
in 2010), local online advertising (Zappedy by Groupon
in 2011), mobile social gaming (Atakama Labs by DeNA in
2011) and clean energy (Solar Chile by First Solar in 2013),
although the ecosystem is still awaiting a marquee “homerun.”
Recent venture funding of web-based startups such as Safer-
Taxi ($4.2M) and ComparaOnline ($16M) point to
increased early-stage investment activity while
the exit market for Latam technol-
ogy companies continues
to mature.
In addition to Startup Chile, others have
recently launched seed accelerator pro-
grams including Fundación Chile, Wayra
(Telefonica) and Social Lab, a social impact
program. Nearly 30 CORFO-backed incu-
bators dot the landscape and co-working
spaces for startups are becoming more
common. While this activity signals a
burst of interest in entrepreneurship, time
will tell if these programs are effective
at producing investable startups with
big market potential and how they will
evolve as the ecosystem matures and
becomes returns-driven rather than
subsidy-driven.
LAVCA has named Chile the #1 environment for VC in Latin
American for a consecutive 8 years due to the country’s “IP
protection, judicial transparency and perceived corruption.”
CORFO has matched private capital by a ratio of 3:1 to
raise an estimated $450M for early stage investments,
but much of this capital has gone to later stage growth
investments while a capital gap still exists at the early
stage. New accelerators, seed funds and angel
groups are attempting to fll this void, however
the shortage of high-growth homegrown
startups and limited exit activity has
constrained investment.
high impact
entrepreneurs
22 23
1998 1939 1967 1976
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
CORFO established to promote economic growth
CONICYT founded to develop
Chilean science and technology
Fundación Chile founded
with ITT (US telecom)
Endeavor launches ?rst satellite ofce
Octantis angel network invests
$1.2M but has poor returns
Chile Global Angels launches angel network
Chile joins Patent Cooperation Treaty
Startup Chile is launched
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Insurance startup ComparaOnline raises $16M
SocialLab accelerator raises $2M for social impact startups
Nazca Ventures launches $6M micro-VC fund
Government introduces
35% R&D tax credit
Baidu goes public on the Nasdaq
(worth $55B today)
1939 1967 1976 1998 2003 2009 2010 2012 2013
Angels Seed Accelerators
Angels Seed Accelerators
Angels Seed Accelerators
Angels: The frst angel group Octantis was organized in
2003 and bet $1.2M on local startups but failed to gen-
erate returns. In general, angel networks struggle without
strong seed and venture investors in the ecosystem to
provide investment leadership and follow-on funding,
which was the case in Santiago at the time. Since then,
Chile Global Angels formed in 2009 and its 27 angels have
made 12 investments to date and generated one exit.
Other small angel clubs have formed in association with
different universities.
Seed Accelerators: While Startup Chile offers $40K
grants to participants, other groups such as Fundación
Chile, Wayra (Telefonica) and some universities have
launched seed accelerators that take equity in participat-
ing startups and establish market terms for early-stage
companies. Another accelerator, Social Lab, helps launch
social impact companies, which have now raised $2M in
capital. Each of these accelerators appears to be moti-
vated primarily by strategic objectives and secondarily
by returns, which underscores the early nature of the
ecosystem and uncertainty regarding its ability to sustain
itself from value creation and liquidity events alone.
Seed Funds: There are very few, if any, traditional seed
funds in Chile and “seed capital” is often used to refer to
small grants or investments offered through incubators
or accelerators. This presents the capital gap that exists
between $100K and $1M in initial funding, with most
venture funds preferring to invest larger amounts in more
developed companies. Most recently Nazca Ventures
raised $6M (larger if matched by CORFO) to provide
smaller early stage investments that may resemble tradi-
tional seed deals.
In early 2010 a massive 8.8-magnitude earthquake rocked the coast of Chile and afected
over 1M people while destroying some 350,000 homes and claiming hundreds of lives.
The country was in the middle of a transition of power for the ?rst time in 20 years and
many must have wondered what the future would hold for Chile. Out of crisis
and adversity can spring new opportunities and willingness to collaborate,
and for some, a particularly audacious vision emerged: that Chile would
bounce back stronger than ever with Santiago as the leading innova-
tion hub in Latin America.
santiago
v
community
&
culture
government
& regulation
universities &
education
-
.
Chilean society, still divided from the
Pinochet era, has a mixed view of the
laissez-faire economic policies of the
period’s “Chicago Boys.” Following the
transition to democracy, the center-left
political party, which ruled for 20
years, maintained a free-trade strategy
as Chile became a regional economic
leader. In 2010, the conservative party
took power and made interventions to
encourage a new culture of entrepre-
neurship, with most ecosystem de-
velopment efforts backed by
state agencies CORFO
and CONACYT.
Santiago has no fagship research institution and its system of
higher education is fragmented across small, mostly private
universities. Access to education is a hotly debated political
issue with recent demonstrations against the school system
and calls for public, affordable college for all. R&D spending is
an anemic 0.4% of GDP and the government has moved to
increase spending, incentivize public and private R&D
through tax credits and sponsor universities-based
incubators and accelerators. In 2009 Chile joined
the PCT and turned focus to patent fling and
technology commercialization.
When Startup Chile launched in 2010, the
average Chilean’s extended social network
was limited compared to that of other
Latin Americans, owing perhaps to Santiago’s
removed geographical location and a conservative
business culture based on close relationships and
family ties. While Santiago’s economy was strong, its
entrepreneurial culture was weak, with society and
parents pushing talented young graduates toward large
stable corporations while discouraging risk-tak-
ing, disruptive thinking and entrepre-
neurship. Startup Chile and
others are working to
change that.
22 23
Fundación Chile was founded in 1974 as a $200M
public private partnership with ITT (US telecom) and now
BHP Billiton (global mining) to support innovation tech-
nology adoption in Chilean industries. The organization is
credited with helping launch Chile’s salmon and solar indus-
tries and operates a venture fund and seed accelerator program with exited
investments in data services, clean energy and agritech. These efforts support
the ecosystem by providing market terms and reduced transaction costs for
early-stage fnancings.
Robin Li founded Baidu,
the “Google of China”
Lenovo is founded
CORFO established to promote economic growth
CONICYT founded to develop
Chilean science and technology
Fundación Chile founded
with ITT (US telecom)
Endeavor launches ?rst satellite ofce
Octantis angel network invests
$1.2M but has poor returns
Chile Global Angels launches angel network
Chile joins Patent Cooperation Treaty
Startup Chile is launched
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site Facebook is blocked in China
Google exits China over censorship disputes
Start-up Incubator, Innovation Works, launched by Kai-Fu Lee
Baidu buys 91Wireless for $1.9 billion
Alibaba/Taobao expected to go public at a $100B valuation
Tencent goes public
(worth $100B today)
Baidu goes public on the Nasdaq
(worth $55B today)
Google enters China
Microsoft Research Asia
opens in Beijing
Pony Ma founded Tencent, China’s
largest communications company
Jack Ma, founded Taobao, China’s
largest ecommerce site
Insurance startup ComparaOnline raises $16M
SocialLab accelerator raises $2M for social impact startups
Nazca Ventures launches $6M micro-VC fund
Government introduces
35% R&D tax credit
Baidu goes public on the Nasdaq
(worth $55B today)
1939 1967 1976 1998 2003 2009 2010 2012 2013
2003 2009 2010 2012 2013
Startup Chile (SUP) is a government-sponsored accelerator that offers a visa and $40K in
non-dilutive funding to international entrepreneurs (and now local entrepreneurs) to spend 6
months in Santiago working on a startup and supporting the local entrepreneurial ecosystem
by teaching classes, mentoring locals and participating in conferences, hack-a-thons and meet-
ups. The purpose of Startup Chile is to create a local culture of entrepreneurship with a net-
work of international entrepreneurs. Several SUP participants have raised additional private
capital and at least two have already been acquired. of Chile
“What took us from a low income to a middle income country will not take
us from a middle to high income country”
- Andrés Pesce
VP of Business Development and Investment, Fundación Chile
“The great thing about these days is that you can challenge the in-
cumbents with the same rules and in their own ?eld”
- Nicolas Shea
Founder of Start-up Chile and Cumplo
Corfo is Chile’s Economic Development Agency
that has existed since 1939 to promote industry
and growth. During the 1990s the agency in-
creased its focus on innovation, R&D, tech
transfer and investment and is now the public backbone of the entre-
preneurial ecosystem. CORFO supports accelerators (most notably
Startup Chile) and dozens of incubators by subsidizing operations and
providing grants for startups. In 2006, CORFO began matching funds
up to 3X for early-stage venture frms and in 2012 a 35% tax credit
was announced to incentive private R&D spending.
santiago
Santiago’s Ecosystem Rumbles to Life
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
excellent
de?cient world
class
evolving
de?cient world
class
evolving
de?cient world
class
nascent
24
Factors for Creating Entrepreneurial Environments
Culture & Community
Santiago is still in the early stages of building a vibrant startup community. His-
torical cultural barriers have included the perception of entrepreneurship as less
prestigious and of lower economic value for those with top talent, while some
young people, politically opposed to big business, tend to include new venture
activity in their negative opinion. Startup Chile’s efort to catalyze a culture of
entrepreneurship has raised awareness and support for startups and has added
Santiago to the global startup map, but the outcome is yet to be determined.
High Impact Entrepreneurs
There is not yet a robust track record of high impact entrepreneurship in Santi-
ago, although a handful of local startups have been acquired in recent years as
well as a couple of ventures launched by international founders at Startup Chile.
Without a previous generation of successful, high-growth entrepreneurs, the
ecosystem lacks the robust mentor networks and experienced angel investors to
guide young founders, although connections with international entrepreneurs
help bridge the gap.
Government & Regulation
The Chilean government, through agencies CORFO and CONICYT, has
been the ubiquitous presence in the ecosystem with innovation and entrepre-
neurship a top priority. Its groundbreaking Startup Chile program has been
copied by many other aspiring ecosystems, including in Brazil, and the gov-
ernment’s supportive policies have attracted international research centers and
entrepreneurs, incentivized new fund formation, reduced barriers to starting a
business and reformed bankruptcy laws.
Funding & Capital
Santiago has the most developed venture capital market in Latin America with
new funds forming in recent years to ?ll gaps in the capital spectrum, particu-
larly at the early stage. In 2013 CORFO announced $90M in matching capital
for 6 new early stage funds, 3 with foreign capital. Local angel, seed and venture
investors are currently funding startups in Santiago and abroad, while regional
Latin American funds have led some of Chile’s largest venture rounds in recent
months.
Incubators & Accelerators
Through dozens of incubators, a variety of accelerator programs and growing
co-working spaces, Santiago is creating opportunities for networking, mentor-
ship and collaboration. International programs like Wayra and 500 Startups have
accepted Chilean founders while local accelerators at Fundación Chile, Social
Lab and Startup Chile have pursued very diferent missions including ?nancial
returns, social impact and cultural change. The sustainability of these programs
in the long term is unknown.
Universities & Education
Santiago claims two universities in the top 10 in Latin America (University of
Chile and Ponti?cal Catholic University) however neither is consistently ranked
among the top 400 global research institutions. Progress has been made to
incentivize research and development, PCT patent ?ling and technology
transfer, but venture funding of university-based technologies has been limited.
Politically, the highly privatized university system and lack of access to higher
education for many is a hotly debated issue in current discourse.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
25
Recommendations for the Future
Culture & Community: Santiago should continue its efort to import foreign entrepreneurs but needs to do a
better job of attracting those who will put down roots and help build the community for years to come. The country should
strengthen ties with diaspora Chileans and entice entrepreneurial and highly educated returnees to come back and help build
the ecosystem with their experience and international networks. Entrepreneurship must be celebrated on both sides of the
political isle and eforts should be made to involve disruptive, counter-culture members of society in the ecosystem. Startups
must be seen as a way to efect societal change and to solve big problems and not just as a means of making money. Chil-
eans must become more collaborative and risk-tolerant.
High Impact Entrepreneurs: Entrepreneurs in Santiago have yet to achieve a “homerun” exit
and critics of the ecosystem point to the abundance of mobile application start-ups and the relative
paucity of basic science and IP-driven companies. Santiago should continue to encourage entrepre-
neurs to develop capital efcient products (such as mobile applications) but needs to also develop
its core innovation capacity to generate truly disruptive companies. Santiago should work to attract
more seasoned entrepreneurs beyond the relatively inexperienced participants in Startup Chile and
should expand exchange programs with other leading international tech hubs to help locals gain
experience and build networks abroad. A ?rst generation of successful, internationally-connected
entrepreneurs could provide mentorship to young entrepreneurs and inspire risk- averse talent to
consider a start-up as a viable if not superior alternative to traditional employment.
Government & Regulation: The government has played a central role in developing Santiago’s ecosystem but
needs to have its own exit plan in place to allow the private sector to thrive. Chile is preparing to return power to the cen-
ter-left political party and the country’s leaders, regardless of political afliation, need to protect the successful innovation
programs from disruptive political cycles. Entrepreneurship must transcend political lines and a long-term commitment must
be made to innovation, R&D and a supportive business environment. While it may be tempting to spread scarce resources
equitably across programs, Santiago should concentrate its resources on high-impact programs and players. Programs to spur
entrepreneurship need to be focused on core innovation and not just “window-dressing” to put Santiago on the map.
Universities and Education: Santiago must resolve its current crisis in higher education by rebalancing quality
and access across all segments of society. A component of this solution should include the transformative potential of
massive open online courses to help close the gap between private and public schools. Santiago must become a magnet
for top regional and international students by improving research capabilities (particularly in core innovation areas such
as clean tech, astronomy and mining), by providing ?nancial aid to gifted students and by diferentiating itself from other
Latin American hubs by focusing on advantages in physical security and quality of life. Finally, Santiago must support a
?agship research institution that can produce breakthrough IP and compete for top scientists and engineers from around
the world.
Santiago is an emerging entrepreneurial ecosystem in one of the richest, most competitive nations in Latin America and is transitioning to an
innovation economy. The ecosystem has bene?ted from substantial government support in recent years and is beginning to show its potential
with more startup activity, early-stage investment, research spending and international awareness than ever before. Moving forward, Santiago
will be challenged to develop its own core productive assets and areas of investigation that will drive the city’s innovation engine. The country
needs to increase investment in research and development. Other challenges include its relative geographic isolation, small domestic market,
deep political fractures and competition for regional superiority from other Latin American ecosystems in Brazil, Colombia and Mexico.
santiago
funding
& capital
INCUBATORS
& ACCELERATORS
Nairobi’s Fledgling Innovation Ecosystem
Amongst the cities that we traveled to, Nairobi had the youngest and least developed innovation ecosys-
tem. Initial signs of organized high impact entrepreneurship and investment can be traced back to only a
mere ?ve years ago. Today, there appears to be notable interest from foreign investors not only
in Nairobi but also in many cities across East Africa. But the innovation and entrepre-
neurial ecosystem faces its share of challenges such as a small domestic market
that is narrowly focused on mobile technology. Local opinion on the status
and quality of all six factors varied widely but one thing that people seem
to agree with is that time is still needed in order to allow for growth of
the ecosystem. The hope is that government support for innova-
tion will increase, cultural biases against entrepreneurs will wither
away, technology penetration will continue to grow, and that
all these elements will attract investors and lead to the right
deals.
Safaricom’s introduction of mobile
payment system M-Pesa in 2007 was critical
for the creation of an innovation ecosystem in
Nairobi. This mobile payments platform would be the
foundation for many Kenyan startups going forward (e.g.
Sematime, Kopo Kopo). 31% of Kenyan GDP is now transact-
ed through mobile payments (Forbes) and 74% of adults in Kenya
are M-Pesa customers. This ecosystem is supported by many
international investors and entrepreneurs. However,
entrepreneurship remains challenging for local Ken-
yans, as many opt for the fnancial security
of a corporate job versus taking
equity in a startup.
Nairobi has begun to develop a cohort of
incubators and accelerators. They are a mix
of co-working spaces, mentorship programs,
entrepreneurial communities, and true
accelerators. This network is loosely struc-
tured and overlapping, are usually funded
by investors abroad, and typically have an
industry focus (mobile technology, ener-
gy). Some, like Invested Development, are
socially oriented, investing in companies
that have potential to lift many Kenyans
out of poverty and improve their stan-
dard of living. Others, like Savannah Fund,
are more oriented towards the bottom
line. Some, such as 88 mph, are
true accelerators making
real equity bets.
Early stage investors in Nairobi comment that there is no
shortage of capital. Yet, they continue to struggle to fnd
the right entrepreneurial talent and companies to invest
in. There are 25+ early stage frms (and this number is
growing!) who invest at the early stage, funding a range
of sizes from less than $20,000 to $2 million. However,
the community has still indicated that a funding gap
exists at the idea to product level (sub-$20,000),
as some entrepreneurs lack the personal
capital (or “friends and family round”)
to self-fund, and also at the $50,000
- $200,000 level. A common
area of focus for investors
is mobile technology.
“The necessary business acumen is not there. There are plenty of brilliant young coders
who can build a beautiful product but do not have the training nor experience to bring it
to market. There is a gap between idea and growth phases of young companies.”
–Nancy Wang, Innovation 4 Africa
A number of Incubators and Accelerators have recently
popped up in Nairobi, some of these include:
“East Africa is attracting a signi?cant amount of investment. The region is one of Africa’s
fastest growing economic hubs.” –Kenneth Macharia, Acumen Fund
“Our focus is not IT, its social enterprise.” –Founder and CEO of prominent Kenyan start-up accelerator and investment ?rm
m:lab
Growth Africa
88mph iHub
nailab
Invested Development
Innovation 4 Africa
iLab Africa
Acumen Fund
high impact
entrepreneurs
26 27
2014 2004
1994
1984
M-Pesa launched in Kenya by Safaricom
BarCamp Nairobi began to attracting entrepreneurs
Ushumidi founded by Erik Hersman
88mph accelerator founded by Danish investor Kresten Buch
Savannah Fund launched as $10mm accelerator for high growth tech startups
iHub, the ?rst incubator/tech-hub, is founded
iLab Africa is established
Invested Development, an early stage impact investment ?rm, is founded
2007 2008 2009
KENYA
2010
Nairobi’s Fledgling Innovation Ecosystem
“Our focus is not IT, its social enterprise.” –Founder and CEO of prominent Kenyan start-up accelerator and investment ?rm
community
&
culture
government
& regulation
universities &
education
-
.
The entrepreneurial community in
Nairobi is small and bears a large inter-
national infuence. The investor community
is largely comprised of “outsiders”: they are
visibly male, young, and white. Many of them
came to Africa to make a difference and are deeply
engaged with the social impact mission. There is
a cultural dichotomy for the Kenyan entrepreneur.
Kenyans are very entrepreneurial by nature of their
environment. However, pursuing entrepreneurship as a
career is still diffcult for new Kenyan graduates who
attended university based on the support of
the broader communities and opt
to take a corporate job with
stable cash fows.
Reviews on government involvement in
innovation are mixed. Some investors
are concerned with corruption and
bureaucracy – citing visa issues and
ease of obtaining permits in particular.
According to the World Bank’s Doing
Business 2014 index, Kenya’s ranking
has fallen and in 2014 ranks 129 out
of 189 countries overall. However, the
government has the right intentions. In
2008, it implemented Kenya Vision 2030,
a long-term development plan
whose goal is to transform
the country into a newly
industrializing, middle
income country.
Universities have begun to get involved in entrepreneurship.
However, real challenge in the education space is the lack
of interaction between MBA and technology programs.
Because these programs do not usually overlap,
there is a gap between the two felds - both of
which are required to start, build, and develop
successful businesses. In addition, due to
the lack of successful predecessors,
there are few mentors available to
support and educate entrepre-
neurs.
26 27
2014 2004
1994
1984
M-Pesa launched in Kenya by Safaricom
BarCamp Nairobi began to attracting entrepreneurs
Ushumidi founded by Erik Hersman
88mph accelerator founded by Danish investor Kresten Buch
Savannah Fund launched as $10mm accelerator for high growth tech startups
iHub, the ?rst incubator/tech-hub, is founded
iLab Africa is established
Invested Development, an early stage impact investment ?rm, is founded
The Konza Techno City - A Brilliant Plan or a Planned Disaster?
Kenya’s government recently launched a $15bn initiative, the Konza Techo City project, an IT city to be
built 37 miles outside of Nairobi. Konza is part of Kenya Vision 2030 and will have a science park, con-
vention center, shopping malls, hotels, international schools, and more.
The government expects Konza to create as much as 20,000 new IT jobs, as well as spur
trade and investment in Kenya. Konza’s focus will be on business process outsourcing,
software development, data centers, call centers, and more.
This plan has been met with mixed reviews, but largely skepticism and concerns
that this is more a political play than a truly economic one. While political
parties on all sides are supportive, citizens seem more hesitant.
“It’s a massive scam” (Konza Techno City)
– prominent player in the Nairobi entrepreneurial environment
KENYA
2010 2011 2012
“I think they are quite destructive.” (in regards to grants given by
government) “It hurts the ecosystem.”
–Nancy Wang, Innovation 4 Africa
“[Businesses] are very tedious to set up, it takes many days.”
–Investment Analyst at Nairobi investment ?rm
iLab Africa is a research center under the Faculty of Inno-
vation Technology at Strathmore University in Kenya. iLab
Africa was created in order to drive research, innovations
and entrepreneurship. Its primary focus is on using mobile
technology to deliver solutions. While iLab does not pro-
vide funding, it provides workspace, advisory services, and
connections with Venture Capital ?rms.
Nairobi’s Fledgling Innovation Ecosystem
world
class
de?cient
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
nascent
de?cient world
class
evolving
de?cient world
class
nascent
28
Factors for Creating Entrepreneurial Environments
Culture & Community
Nairobi’s startup ecosystem is still in a ?edgling state with early eforts to build
a community of local and foreign entrepreneurs, innovators and investors. A
small, close-knit community of predominately foreign talent is forming and
tends to be oriented toward social impact in its startup and investment focus.
Native Kenyans are also participating in the emerging community, however
work is needed to create a culture of collaboration and shared risk-taking in
what has historically been an ethnically divided society.
High Impact Entrepreneurs
Given the nascent status of high-impact entrepreneurship in sub-Saharan Afri-
ca, an experienced ?rst-generation of homegrown entrepreneurs and mentors is
still in the making. Kenyan students feel a strong obligation to provide ongoing
?nancial support to their home communities upon graduation, with most young
talent pursuing corporate or government employment. While technical talent
does exist in Nairobi, it is often not balanced with business acumen and knowl-
edge of startup methods.
Government & Regulation
The government has recently made eforts to stimulate the long-term econom-
ic development of the country through Kenya Vision 2030 and other initiatives
aimed at youth entrepreneurship but results remain to be seen. Kenya’s ease of
doing business ranking by the World Bank continues to decline in recent years
while bureaucracy creates unnecessary friction for new companies. Foreigners
complain of the long wait times, fees and paperwork required to obtain a visa or
to open a business.
Funding & Capital
Given the tepid investment environment in the rest of the world, there is a sig-
ni?cant amount of foreign money chasing East Africa. Over the past few years,
various early stage investment ?rms have set up shop in Nairobi – some with
higher social purposes and others purely pro?t-driven. These ?rms fund the
spectrum of investment stages, although some funding gaps remain. However,
there have been no prominent exits via IPO or M&A, due to the still evolving
stages of Kenya’s entrepreneurship journey.
Incubators & Accelerators
The early innovation ecosystem in Nairobi was spurred by the founding of the
iHub umbrella in 2009 to ofer co-working space, networking and mentorship
for local and foreign innovators. iHub founder Erik Hersman also launched
m:lab, a mobile-focused incubator and a research arm which publishes reports
on the state of innovation in Africa. Others have since launched seed accelera-
tors and there is now a platform for budding entrepreneurs to seek mentorship
and capital in a supportive environment.
Universities & Education
Kenyan universities are starting to build platforms to support entrepreneurship,
research and development and technology transfer. At Strathmore University,
professors had limited time to spend on research so it created iLab, a research
and innovation center, and iBiz, a business incubation center for student-led
startups. Kenyatta University launched the Chandaria Business Innovation &
Incubation Center in 2011 to support both KU students and other Kenyans in
their entrepreneurial endeavors.
Each factor has been rated on the following sliding scale: 1 de?cient, 2 nascent, 3 evolving, 4 excellent, 5 world class
KENYA
29
Recommendations for the Future
Culture & Community: The idea of being a job creator instead of a job seeker very much falls in line with the Kenya
Vision 2030 goals. If gifted students within technology and business can ?nd each other and be free of the ?nancial and cul-
tural constraints that otherwise demand them to take corporate jobs, strong and innovative startups with high success poten-
tial will begin to emerge. This mentality must by further promoted and bred within the national identity to truly efect change
at the grassroots level where graduating students make career decisions. Kenya Vision 2030 is a promising starting point.
Government & Regulation: Kenya’s rank in the World Bank’s Doing Business 2014 report has fallen from the pre-
vious year, overall and in particular categories. Kenya can reduce bureaucracy by improving access to permits, registration,
and credit, reducing lead times to obtain the aforementioned, creating easy access to visas for entrepreneurs and investors,
providing tax and other economic incentives to startups, providing business and technology training for entrepreneurs, and
providing better enforcement of contracts (IP and otherwise). These changes will motivate entrepreneurs to see Nairobi as a
friendly environment for the creation of jobs through entrepreneurship.
Universities & Education: Universities can take on a more active role in designing joint technology and business
programs that are ultimately meant to breed a class of well-educated entrepreneurs with computing prowess and business
savvy. Additionally, the continued creation of platforms that emphasize entrepreneurship as a career and give the foundation
for launch is critical. Many successful entrepreneurs develop their ideas and meet their business collaborators in educational
settings and Kenya must capitalize on its own academic programs.
Nairobi is the least developed startup ecosystem in our analysis, having really only started a few years ago and consisting now of a small
community. Prominent exits have not yet occurred and will likely require at least a few more years before a ?rst generation of successful entre-
preneurs can emerge. Kenyans are by nature and circumstance very entrepreneurial people, however the vision is often limited to achieving a
certain quality of life as opposed to efecting big disruptive change. The creation of a successful entrepreneurial ecosystem faces some sig-
ni?cant challenges, including: a limited domestic market that is further restricted by internet and smartphone penetration rates, cultural factors
pushing new grads to be job seekers instead of job creators, limited overlap in technical and business training, and bureaucratic government
policies that fail to promote long-term incentives for entrepreneurship. Last but not least, time is certainly needed for this community to climb
to a higher state of maturation.
We have identi?ed a number of speci?c areas of improvement that will bene?t the continued evolution of Nairobi’s startup ecosystem.
High Impact Entrepreneurs: The sophistication level of entrepreneurs needs to be
raised through better technology and business training in universities, as well as mentorship from
experienced players in the East African innovation scene. This “chicken-or-egg” problem will
likely requires a multiple year period to resolve itself. Entrepreneurs must be comfortable with the
risk-seeking nature of the business. This requires a fundamental cultural change throughout the
broader community that promotes risk tolerance as a basis of innovation.
Incubators and Accelerators: Although a number of incubators and accelerators exist on and around Ngong
Road in Nairobi, the presence of more locals is critical in Nairobi’s incubators and accelerators, an area currently dom-
inated by young, international talent that may not have the local know-how and experience to mentor budding Kenya
entrepreneurs. The chicken-or-egg problem again presents itself: great mentors with success building innovative startups
in East Africa are still lacking, yet they are greatly needed to help establish this ?rst-generation entrepreneurial class.
During our research, we have traveled to countries that cover the spectrum of economic development. What
we’ve found in each geography is that innovation ecosystems are critical to creating thriving and sustainable economic
growth for countries. Each of the countries we visited has been transformed in ways both big and small by entrepre-
neurship and the disruptive technologies created. While the recipe for success will vary by country, we have attempt-
ed to layout the elements that we believe to be critical for developing thriving high-impact entrepreneurship and a
thriving innovation ecosystem.
- Government & Regulation: A government’s support is one of the most critical factors towards creating a thriving
entrepreneurial ecosystem. Government must create a healthy and predictable environment that reduces friction for
entrepreneurs, investors, and academics. This entails building the necessary infrastructure for the ecosystem: easy visa
programs, access to permits, IP protection, contract enforcement, and more. However, governments should not be
making the investment decisions and capital allocation should be left up to the private sector. Governments should
be cautious that when it tries to overstep its public sector role; its spending can become wasteful. Small government
actions can have big efects on making a system easier to navigate, but it can’t necessarily change the culture of the
ecosystem on its own.
- Culture & Community: Regardless of geography, innovation ecosystems should work to cultivate communities
based on mentorship, collaboration and collective learning. This will help to create a virtuous cycle and pay-it-forward
culture where information spreads rapidly, resources are used efciently, collective knowledge is leveraged and innova-
tion occurs.
- Universities & Education: Universities should seek to work more closely with local startup communities and identi-
fy opportunities to commercialize university-developed R&D. Universities should make every efort possible to attract
world-class faculty, which should in turn result in higher quality students and better university-developed R&D.
- High-impact Entrepreneurship: Entrepreneurs need to have the right blend of training – technical know-how
as well as business acumen – to create successful startups. These entrepreneurs must have a strong risk-tolerance,
embrace failure, and see entrepreneurship as a prestigious career option.
- Funding & Capital: Investors across the continuum of funding stages are necessary. In particular, those who have
had experience building and running their own startups often make the best investors. They provide appropriate men-
torship and serve as a quality ?lter to identify the best and most viable startups.
- Incubators & Accelerators: Incubators and accelerators are meant to provide mentorship and knowledge transfer
from seasoned entrepreneurs as well as create collaboration among the diferent players within the system. Incubators
or accelerators that don’t serve as good quality ?lters can hinder startup companies that have great potential.
The world of innovation and entrepreneurship is changing. Each country, city and community can adjust for its
own characteristics and idiosyncrasies to thrive. Ultimately, the best ecosystems ofer the entrepreneur access to large
markets, capital, mentors, customers, educated employees, resources, and IP protection. Based on the geographies
that we studied, each comes up short in some respects and room remains for improvement. Those who can build
ideas and businesses quickly while overcoming the challenges that exist in each of these ecosystems will be the ones
who succeed.
The Future of Global Entrepreneurship
30 31
The Future of Global Entrepreneurship A Special Thanks to All...
China
Songbo Li
Mickey Du
Chris Evedmon
Anna Fang
Taylor Cox
David Lin
Rui Ma
Oliver Li
Qianqian Du
India
Rajesh Sawhney
Mukund Mohan
Gaurav Kachru
Pankaj Chandra
Varun Chawla
Abhishek Srivastava
Anurakt Jain
Vikram Chopra
Chile
Carolina Rossi
German Echecopar
Andrés Pesce
Alan Farcas
Cristobal Undurraga
Mauro Trigo
Nicolas Shea
Alan Ferszt
Matías Rojas
Guillermo Torrealba
Kenya
Jisas Lemasagari
Nancy Wang
Nikolai Barnwell
Kenneth Macharia
John Matogo
Erik Hersman
Tom Denton
This analysis was made possible through a series of interviews across the globe. A special thank you
to all those who took the time to share their insights with us.
30 31
Thank You
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