How to Out-Innovate at the Frontier
The new playbook for innovation and startup success is emerging from beyond Silicon Valley — at the “frontier.”
Startups have changed the world. In the United States, many startups, such as Tesla, Apple, and Amazon, have become household names. The economic value of startups has doubled since 1992 and is projected to double again in the next fifteen years.
For decades, the hot center of this phenomenon has been Silicon Valley. This is changing fast. Thanks to technology, startups are now taking root everywhere, from Delhi to Detroit to Nairobi to São Paulo. Yet despite this globalization of startup activity, our knowledge of how to build successful startups is still drawn primarily from Silicon Valley.
The Silicon Valley “gospel” on innovation best practice is due for a refresh — and it comes from what I call the “frontier,” the growing constellation of startup ecosystems, outside of the Valley and other major economic centers, that now stretches across the globe. The frontier is a truly different world where startups often must cope with political or economic instability and lack of infrastructure, and where there might be little or no access to angel investors, venture capitalists, or experienced employee pools.
Under such conditions, entrepreneurs must be creators who build industries rather than disruptors who change them because there are few existing businesses to disrupt. They look like Dr.Consulta, building a mass market healthcare system in Brazil, or Zola, offering energy access solutions to offgrid customers for the first time.
Like Fetchr, which offers last mile logistics and ecommerce delivery in the Middle East, the companies these entrepreneurs create must be global from birth targeting many markets and looking to the world for talent.
They focus on resiliency and sustainability rather than unicorn-style growth at any cost. When infrastructure does not exist, they build the full stack by developing enabling business models in order to offer their desired end product. To build their personal finance manager, Guiabolso had to build a range of enabling infrastructure, from a bank interconnections layer to a module to teach customers about credit worthiness to a lending marketplace.
Finally, entrepreneurs at the frontier don’t just build their startup — often they are building their ecosystems at the same time. Like Hernan Kazah of Mercado Libre in Latin Ameria and Fadi Ghandhour of Aramex in MENA, global entrepreneurs act as older siblings, supporting their ecosystems and creating the sought-after multiplier effect.
With rich and wide-ranging stories of frontier innovators from around the world, Out-Innovate shares this new playbook for innovation — wherever it has the potential to happen.
Out-Innovate will be published by Harvard Business Review Press. It was one of the three finalists for the best book proposals exploring emerging business themes, a competition co-hosted by McKinsey and The Financial Times, organizers of the Business Book of the Year Award. Out-Innovate was named a “Top Book To Inform Your Technology And Innovation Strategy” by Forbes and was the #1 Release in Venture Capital on Amazon. Find it here.
Alex Lazarow is a global venture capitalist and the author of Out-Innovate: How Global Entrepreneurs — from Delhi to Detroit — Are Rewriting the Rules of Silicon Valley. He presently works with Cathay Innovation, a global firm that invests across Africa, Asia, Europe, and North America. Previously, Alex worked with Omidyar Network. Alex is an adjunct professor specializing in impact investment and entrepreneurship at the Middlebury Institute of International Studies at Monterey. He is a Kauffman Fellow, CFA Charterholder, and a Stephen M. Kellen Term Member at the Council on Foreign Relations.
Alex will share key findings from his playbook on innovation outside Silicon Valley and discuss how Endeavor Entrepreneurs and others around the world are pushing the boundaries of entrepreneurship on Tuesday, April 21, at 8:00 AM PST. Register here.
