Business

Successful entrepreneurship likened to state of mind

Victor Hwang is vice president of the Kauffman Foundation.
Victor Hwang is vice president of the Kauffman Foundation. Courtesy photo

The secret sauce for the creation of another Silicon Valley is the culture – reproduce that culture, and you’ve got a shot at a booming innovation economy.

That’s the message from Victor Hwang, vice president of the Kauffman Foundation and a former Silicon Valley entrepreneur and venture capitalist.

Hwang will speak at Wichita’s first Accelerate the Heartland event on Wednesday at the Wichita Marriott.

The Kauffman Foundation has spent 20 years trying to discover the underlying structures of what makes entrepreneurship work and spread that knowledge. Hwang, who took over at Kauffman seven months ago, has co-written a book, “The Rainforest,” on how communities can build the culture of trust and collaboration that leads to a place like Silicon Valley.

Q. Why did you take the job at Kauffman Foundation?

A. I view Kauffman as one of the most important institutions in the world. Entrepreneurship is a form of social justice, and Kaufman Foundation has been a leader in the movement for entrepreneurship over the last 20 years. It’s more a question of how could I not take this job. It was sort of the chance of a lifetime.

Q. Despite a world increasingly shaped by tech entrepreneurs in a few places, entrepreneurship is actually declining in the U.S. Do you see any signs of a broader rebirth?

A. That’s the next step: to take this interest in entrepreneurship and startups and make it accessible to everybody. You don’t have to be an entrepreneur in Silicon Valley; you can do it anywhere. It’s very achievable.

I spent a decade in Silicon Valley before I came to Kansas City, and what people don’t realize is that Silicon Valley is less of a place and more of a state of mind. In that sense, it’s free. If people can capture that state of mind and find others with that way of thinking, they can replicate that magic anywhere.

Q. Can a community’s culture really be changed?

A. Culture change is … changing the deep beliefs of a community. You can’t change beliefs without changing attitudes, and you can’t change attitudes without changing people’s behaviors. And the way to change behaviors is to engage them in day-to-day things.

So you see this in the startup community: They have activities, they have programs, they have ways for individuals from many different walks of life and many different skill sets to come together.

Q. How does one start that change?

A. All change starts with small teams, right. You can’t change an entire city overnight. It starts with individuals who form groups and organizations that collect together to form entire movements. But not everyone needs to be an entrepreneur.

Q. Can governments, chambers of commerce or other institutions really help?

A. What are institutions? They are pools of local resources and webs of social relations and trust. You can leverage that. A lot of start-up communities are missing that. … (But) you can have a mayor say, ‘What a great idea,’ but how does someone down the chain of the mayor’s staff respond to the entrepreneurs? Are they helping them do things faster, licensing and permitting faster, helping them get resources and access?

Q. What role do universities play?

A. People have come to rely on universities because they are proxies for the knowledge economy, because universities transfer knowledge. But the knowledge economy doesn’t really take off until you democratize the knowledge and it becomes something that anyone can leverage and turn into value.

So, the burden that people place on universities is both understandable but not totally fair, because they are just one piece of the whole system that has to work.

Q. What’s been the impact of 1 Million Cups?

A. People call it the Church of Entrepreneurship. That’s apt, because it’s like church in that anybody can walk in that open door and be greeted like you are a member of the congregation, and once you’re in, you are supposed to help and they will help you in return, so it’s an instant tribe of mutual support.

Four years ago, that was just an experiment the (Kauffman) Foundation was running, and now it’s in more than 100 cities. … It tapped into a deep need that people have in their hearts about ways to engage with others in a community to solve problems and build things.

Q. How important is venture capital?

A. Venture capital, by its nature, requires very high rates of return in order to exist. There are only so many companies that can fit into those categories. The vast majority will never be in a position to justify outside venture capital.

What is really missing is new forms of capital to address the gap for most businesses. I’m actually much more interested in crowd funding and the ability to organize pools of funding through online tools for getting loans faster, exploring new techniques for micro-lending in very small dollar amounts.

Dan Voorhis: 316-268-6577, @danvoorhis

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