Regular contributor Stuart Kauffman is joined again this week by Richard Melmon, a managing partner at Bullpen Capital.
Every cell now living is directly connected to the beginning of life. At no time in that cell's three-billion-year history has its DNA existed in isolation from its cellular machinery. They have evolved together.
Similarly, a cellular machinery supports the mutative power of the entrepreneur. It is called Silicon Valley.
Here there is smart money in plentiful amounts. There are lawyers, finance people, consultants, an entire beehive of experienced engineers, marketing people and the other operatives needed to staff and grow a fledgling start-up company.
All of this is packed into a dense hyper-connected network, each element having full knowledge of the overall context of their respective roles. Silicon Valley has its own form of cellular membrane, packing all of these elements into a confined space, where everyone can find everyone else in the same way a cell finds the specific things it needs in the moment. Without the confinement that creates a certain density of interconnections, nothing works.
Silicon Valley and its entrepreneurs have achieved high levels of fitness within this co-evolutionary process. Venture capitalists — and the rest of the gang — have had to adapt as the nature of deals in the Valley has changed. Internet deals are not the same as semiconductor deals. Clean tech is not biotech. As entrepreneurs tweak their DNA, the rest of the machinery must respond.
Because of its unique fitness, this co-evolutionary process happens naturally in Silicon Valley. The same can not be said of Silicon Valley aspirants around the world.
The cellular mechanism is not well understood elsewhere. Outside of our little valley, governments seeking to mimic Silicon Valley only attempt to copy the DNA aspect of our mechanism, thinking that supporting the entrepreneur will transform their economies. Just as synthetic life, which focuses on the simple task of making DNA, cannot duplicate real life (because no lab can synthetically build an entire complement of cellular machinery), so these simple attempts at supporting the mutative entrepreneur will always fall short of the intended goal.
It takes a whole cell to build a company.