You know Silicon Valley – that magical place were people, ideas, investment, and opportunities have come together for years to generate the next generation of disruptive businesses.
The big challenge for Silicon Valley has not been bringing all of those assets from around to the world to one place in Northern California – it’s been how to bring Silicon Valley to the world.
Most specifically: How do you scale (to use a start-up word) the key elements around a start-up environment and distribute them globally?
That’s just part of GSVlabs‘ mission. GSV stands for Global Silicon Valley, and as you’ll hear from CEO Nikhil Sinha, that’s exactly what they are. From physical accelerators placed in some of the most exciting locations in the world to digital environment that connects some of the most remote, GSV Labs has pooled an extraordinary collection of entrepreneurs, corporations, thinkers, and technology.
A word about Nikhil: He’s just the person to lead such an effort and well worth listening to. He has spent a career shuttling between launching and building global start-ups and leading various academic efforts, including as Vice Chancellor of Shiv Nadar University in India and Associate Dean for Academic Affairs at the University of Texas. Most recently he served as Chief Content Officer at Coursera, one of world’s leading higher education platforms.
Transcript: Nikhil Sinha
Chris Riback: So GSV stands for Global Silicon Valley. Talk to me about the global. I mean, isn’t there enough going on just in Silicon Valley? (For more on GSV, see our conversation with Founder Michael Moe.)
Nikhil Sinha: There absolutely is. But what we are seeing now increasingly around the world is innovation springing up in Shenzhen, China, in Beijing, in Shanghai, in Bangalore, in Hyderabad. London is becoming a hotbed for entrepreneurial activity, and in Rio and in Sao Paulo as well. Innovation and entrepreneurship now is no longer the preserve solely of Silicon Valley, and the entrepreneurial and innovation system continues to expand around the world. So when we think about Silicon Valley, we know that increasingly we need to be connected to the rest of the world and the rest of the world needs to be connected to Silicon Valley.
Chris Riback: Describe that for me. How does that work? Do you set up physical building plant and equipment, or human capital, in these locations? Connecting these locations, is that thanks to that little thing called the internet? Talk to me about how you organize, how you identify locations and people and all of that.
Nikhil Sinha: We have a two-pronged strategy. One, we do believe it’s important to have a physical presence in the most dynamic innovation and entrepreneurial markets in the world. So we are, of course, headquartered here in Silicon Valley but we also have a location in Boston. We’re in the process of opening a new location in Pittsburgh as well. So within the US itself, there are places that are very dynamic in terms of entrepreneurial activity and we want to continue to support that within the US. And then beyond that we are establishing centers in Shenzhen, China, in Paris, in London, in Bangalore and in Rio.
So we do believe that having an anchor innovation center, as we call it, is very important in these markets. And in those innovation centers, we bring together entrepreneurs, venture capitalists, large corporate customers, and create an environment where they can begin to translate their ideas into innovation and new business models. Between Silicon Valley and Boston and in the US we have about 300 startups that we work with. There are about 450 investors as well, and about 50 companies that are part of our innovation ecosystem. And we’re going to take that model and bring that to these different countries around the world as well. So that’s one part of the strategy.
Related but somewhat separate is to take advantage of what you rightly identified as this new technology called the internet. While it’s great for us to have a presence in these markets, we also know that entrepreneurial activity and innovation is taking place in cities around the world where we would never have a GSVlabs center. So we know there’s entrepreneurial activity in Nairobi in Kenya. We know that there’s activity taking place in Nagpur in India, in Manchester, in Cornwell. So there’s a lot of activity that’s taking place where we will not have a physical presence. How do we bring the resources that we provide to our members in our physical centers, in our innovation centers? How do we bring those resources to those people around the world? And for that we are launching an online platform that will allow anyone, anywhere in the world, to become a GSVlabs member.
Chris Riback: An innovation center, bring that alive for me. What does that feel like? What does it look like? What’s the activity? If you have a number of companies in there, startups, X number of them, do they mix? You’ve got mentors. How do the mentors determine which of the startups that they are mentoring? What is an innovation center and what does it feel like?
Nikhil Sinha: Imagine that you’re in 2955 Campus Drive in San Mateo in the heart of Silicon Valley, and you enter the GSVlabs innovation center. Firstly you’ll find that there are about 250 people within a space that is about 46,000 square feet of space. Many of them are startup. There are about 80 startups that are engaged in a range of technology-based startup activity including in sectors like education technology and financial technology, healthcare technology, data, machine learning and artificial intelligence, sustainability, entertainment. So there’s a wide variety of that kind of activity taking place.
Most of these people you find, it’s an open work space where people have desks and they are sitting next to each other. And many of these companies are at the same stage of evolution and development, and they talk to each other. There is a community around it. There’s networking that takes place on a regular basis. But also within that same location are venture capitalists with whom our startup members can interact and bounce off ideas and raise investments. And there are also large companies like 3M who have their Silicon Valley innovation hub in the GSVlabs innovation center in Silicon Valley. And they use that center to both spark being connected to what’s going on in emerging technologies, but also to spark internal innovation, as well as to connect with the startup environment.
So it really is an excellent mix of people and a community that interacts. We have events, we have demo days, we have accelerator programs. Companies regularly come from all over the world to participate in our accelerator programs. We have partnerships with organizations in South Korea, in Mexico, in Germany, in China, in India, in Brazil. And they keep sending their startups to Silicon Valley to participate in our accelerator programs. So there’s a tremendous hub of activity and serious innovation and entrepreneurial work taking place in those innovation centers. Why come to one of these innovation centers?
Chris Riback: Yes.
Nikhil Sinha: Well, what does a member get when they come? There are, I think, four or five key things. One, community and networking and the ability to talk to the people that they need to talk to to solve their problems. Secondly, access to our mentor network. We have over 100 mentors that work with these companies. And the mentors and the companies find each other through us. Companies tell us what they need, mentors tell us what kinds of companies they want to work with, and we do the matchmaking for them. They get access to our Preferred Provider Program. We partner with about 25 companies that provide key services that a startup might need, anywhere from Amazon and Google Cloud, where they do have the ability to launch their networks on those Cloud platforms, to legal and finance and HR services.
The value of that is about $200,000. So a GSVlabs member who comes in immediately gets sort of an investment of $200,000 from GSVlabs and our partners to help jumpstart that company. And then the last thing is that they get access to our investor network, and that gives them the ability to continue to raise money as well. So the whole platform is designed to promote entrepreneurships, to launch these companies, to accelerate their progress and growth. But if you think about everything that we do, all of that can also be provided online.
Chris Riback: Yes.
Nikhil Sinha: And that’s why we’re so excited about the launch of our online platform so that we can take all these resources and bring them to people who don’t otherwise have the opportunity to access these resources.
Chris Riback: Listening to you, I’m curious. You have an incredible perch and view, and I’m kind of curious how you’re seeing the global economy based from what you do and where you said. On the one hand, you are describing a totally connected, totally cross-border, easily transitioned global economy where, as you just described, this might occur online. You might not even need in certain places like Nairobi to be physically present. You can connect them and in other places you may have that physical presence. But you are describing a connected global economy. And yet at the same time, you know from not just this country but you know what’s happening with the EU and in other countries, a turning inward. And there’s some growing government efforts to dissuade some cross-border transactions and that type of economic activity. And “dissuade” may be not the fairest term, but you know what I’m saying.
Nikhil Sinha: Yes.
Chris Riback: How do you view that? How do you view the tension right now between the interconnectedness that you describe versus, to oversimplify, the spots of nationalism or protectionism that we all see and read about?
Nikhil Sinha: That’s a great question, Chris. I think what we’re seeing in some respects is almost the last attempt of a 20th century industrial economy to try and deal with the, I think, inevitable and at this point unstoppable transformation that the 21st century technology, information technology based economy, is developing into. And I think that we’re at that point where we are at the cusp of this tension between one and the other as we’re transitioning from one side to another. It’s not unlike if you go back and look historically. It’s not unlike the tensions that arose as we made the transformation from agriculture-based economies to industry-based economies. And again there was a lot of resistance about the changes that were taking place in land ownership and the mechanization of agriculture, and the transition, migration of people from rural and agricultural areas to the city.
So those tensions are playing out right now as well. In that time as that industrial revolution was rising to its peak, and countries began to shut down their borders to try and protect against globalization, led to the great recession, the Great Depression actually, as a consequence of that. And I think there’s some danger of that here as countries now continue to think that they’re protecting their industrial base in this onslaught of continuing connectivity and global trade. So that’s all the tensions that I’m seeing. I just don’t think that what we’ve been able to achieve technologically can be walled off in any meaningful way anymore. That genie is out of the bottle.
And I’ll give you the example of our online platform. If you think just to go back to what members get there in Silicon Valley. Well, they get community and networking where we know from Facebook and Twitter and LinkedIn that you can build community and networking online. They get access to mentors. Well, all those mentors are available online. And even those mentors that are located in Silicon Valley, they spend about 80% of their time interacting with their companies on the internet anyway. So those mentors can be scaled around the world. They get access to investors and those investors are also online, and the interactions are online. And then finally our Preferred Provider Program where if you want to access AWS resources you can do that anywhere in the world through our platform. So there are no barriers to us. Even though we believe it’s important for us to have innovation centers around the world, the fact is that those are not a necessary condition for us to be able to provide our resources around the world, and for people to be able to access them.
Chris Riback: You have an incredible background and I’m going to ask you about it in a little bit. This mix of academic and entrepreneur and executive, business executive, and the way that that has intersected in your career is fascinating, and I want to hear more about it. It also, as I’m listening to you, really came across in that last answer. So the academic in you, of course, recognized where we are in society today and the tensions, and compared it historically, which I was going to ask you about and you went there naturally. I also heard the executive and entrepreneur in you in terms of thinking about the opportunity.
How do you think in terms of an investor? So if we are at that cusp and we are in that tension point, and there’s going to be a frothy back and forth and some peaks and valleys, how do you think from an investment point of view? In the long run, I assume, listening to you, you’re betting on the win for globalization. In the short term, it sounds like it’s going to be choppy. How do you think about that balance as an investor?
Nikhil Sinha: I think that investors, particularly in private equity investors, as they’re now looking at their existing investments as well as they do due diligence into fresh new investments, I think they have to put the challenge of innovation and digital disruption at the heart of their investment thesis. So as they’re looking at these companies and they’re saying, well, this company is an old line industrial company, we believe we have an opportunity to do transformation, improve them, make the investment and benefit both the company as well as ourselves from that investment.
I think they have to ask the question what is going to happen to the business model of this company in five to seven years? We don’t even have to think out 10 years anymore. Three to five years in some cases to say how is technology going to disrupt the business model of this industry? How is it going to disrupt the business model of this company? Who are the potential competitors, not just the existing old line competitors, but who are the new and emerging competitors in Silicon Valley and in China and in India who are building technologies that are going to disrupt the business model of this company? I spent the last few years before I came to GSVlabs I was Chief Business and Chief Content Officer of Coursera, which is the world’s largest higher education platform.
Chris Riback: An incredible platform.
Nikhil Sinha: Yes, an incredible platform. And I started the enterprise business there, our B2B business. And what I saw, the reason that business became so successful so quickly is because 10 years ago, learning and development in companies is a nice to have. A perk that they provided employees. Today, learning and development is a strategic necessity. And for companies who do it well, it’s a strategic advantage. Because unless they have the ability to retrain, re-skill their employees, they will continue to struggle competitively in a global technology-based economy.
We are seeing the same thing happen with innovation now. I think innovation today in the enterprise is where learning and development was 10 years ago. Today it’s a nice to have. You see people investing and you now have titles like chief innovation officer or VP of innovation in companies. Within five years, the ability to innovate will become a strategic necessity for companies around the world. It won’t just be a nice to have. So I see a lot of parallels between what’s happening with learning and development and now what’s happening with innovation within the enterprise. And I think as an investor, I would be asking that question all the time, particularly private equity investors that do primarily invest in old line business models and old line companies, to say what is the impact of technology and how will that disrupt the industry or the company that I’m investing in?
Chris Riback: You just mentioned Coursera. Give me another example maybe of one of these businesses lined up to leverage or take advantage of the disruption. Maybe one of them. And I know you love all of your children equally, but one or two of them out of your stable. I mean, you have different labs. You have the ed tech, you have entertainment, sustainability, big data and mobile. Is there an example that comes to mind out of one of them that proves out what you’re describing?
Nikhil Sinha: Without mentioning names, there are several new emerging financial technology companies that we think are going to be extremely disruptive in the way that payments are being developed and processed. The payment and funds transfer industry remains very old school. It’s dominated by large, heavily regulated companies. And the ability to go in and change the nature of how and when financial transfers take place, I think, is a continually evolving area. We saw PayPal came in 15 years ago or so and begin to build a peer-to-peer payment network. I think that what we’re seeing is just the beginning of what’s going to happen with payments. And we have several of our startups in Boston who are doing very exciting work in this area.
Chris Riback: As I researched for this conversation, you have a number of companies in that area. Another one that caught my eye, obviously, and again I know that you play no favorites and you support all of the companies, but Brex, which is I guess the first corporate card for startups that has no personal guarantee or security deposit required, which is kind of incredible. And I know that’s not the only one. You’ve got a number of efforts in the payments area.
Nikhil Sinha: We do, and the Brex platform today is focused on providing credit to startups. But the way that they are building and thinking of the technology, there are many more applications as a way of doing it. It’s already valued at over a billion dollars and is just a couple of years old.
Chris Riback: Right, and I remember when a billion dollars was a lot of money, Nikhil.
Nikhil Sinha: I know. So, yes, there’s a lot of exciting work. And that’s why if today I’m an investor, and I’m investing in a company that’s got seven or eight hundred million dollars of revenue and I think I can improve the profitability and it’s into payments, I have to ask myself what is Brex going to do to this business model? And if I’m not aware of what’s going on in digital transformation and connected applications, I’m going to be, those companies are going to be, in a lot of trouble.
Chris Riback: Nikhil, I hinted at it before. Your background, this mix of business and education, feels like the perfect mix for GSVlabs. Talk to me about your background. Where did you grow up? What were some of the real transformational learning opportunities for you?
Nikhil Sinha: So I grew up in India. My father was in the army so I lived all over India every two to three years. And I think that was a really important life skill that I developed, which is how do you move every two or three years, pick up sticks, move to a new place, build connections, networks? And so I feel comfortable today going to any country, any place, for any period of time and being able to very quickly connect and build that network. It also provides a lot of adaptability. And it turned out that in my career that adaptability was very important.
I did high school, I did college in India. Then I began my professional career in the government of India as a bureaucrat for five years. Left, came to the US to do a Masters and then a PhD at the University of Pennsylvania, and then went on to teach at the University of Texas. So that was the first sort of, I would say, trajectory of mine. I got tenure at the University of Texas but by then I had sort of become very interested in what was taking place in global technology transformation. And I left the university to work on a small startup doing cross-border IT outsourcing. That was a division of Deluxe Corporation, the big check printing company. And so I got my first break in the corporate world through Gus Blanchard who was then chairman and CEO of Deluxe. My first title was president and CEO, and I think that that’s a very, very good way to begin your career if you’re going to transition.
Chris Riback: That’s not bad, yes.
Nikhil Sinha: So it’s a better transition into a new industry. So I was very fortunate to get that opportunity and then going into that environment. Now, one of the things that academia teaches you is to absorb new information and new ways of thinking very quickly. And I think I could use some of those skills in the corporate environment as well. Did a couple of years, that company was sold, yet another startup, and then became a venture capitalist for a while. And then I had a sort of sidestep in my career. I went to India for five years to set up a new university.
Chris Riback: Wow.
Nikhil Sinha: And that was an amazing experience. It’s the first research university in the private sector in India. One of India’s richest businessmen and philanthropists, Shiv Nadar, started the university and brought me on as employee number one to design and get the university up and running. It’s one of India’s top universities now. And that was an amazing experience to be able to actually go back to India and give back in such a meaningful way, in ways that impact people’s lives through education. And bring in all of the things that I’d learned in American academia, and bringing those to the Indian environment was very exciting.
And then after Shiv Nadar University I told you about Coursera, I spent three years there. Coursera, I think, is one of the most important companies in the world. We like to say it is democratizing higher education. And what the world needs is high quality education delivered at affordable prices at scale. And that’s the problem that Coursera is solving. So a very important company. Had a great time there. Worked on a number of different projects before coming to GSVlabs.
Chris Riback: It’s an incredible company. The impact that that’s made is spectacular. Not a lot of people give up tenure at University of Texas. I’m sure you had friends and family who told you you were crazy at that point.
Nikhil Sinha: Yes, I think I’m one of the few people I know who’ve given up a job for life three times. First in the government of India and actually twice at the University of Texas. So I would not ever have described myself as a risk-taker, but it turns out that my career definitely had a lot of turning points where I’ve taken risks that other people thought were not very smart. So I think I’ve been fortunate. So I’ve had this experience doing a lot of things. My wife likes to say it’s because I can’t hold down a job. That’s why I keep going from one to another.
Chris Riback: Of course. That’s what one’s spouse is for in either direction is to keep us all humble, I’m sure. Nikhil, thank you for your time and fascinating personal story. And with GSVlabs, continued great luck to you.
Nikhil Sinha: Absolutely. And I just leave you with a parting line here. Just in the same way that Coursera is democratizing higher education, our mission at GSVlabs is to democratize innovation. And how do we make innovation and the things that make it happen available to people around the world at affordable rates, regardless of where they are?
Chris Riback: In terms of, though, what’s next, is it the online platform or the combination of the online platform plus the global centers? Is that where you would point to for what’s next for GSVlabs?
Nikhil Sinha: Yes, absolutely. We will continue to grow our innovation centers as anchors from which we will continue to radiate out with the online platform.
Chris Riback: Thank you, Nikhil.
Nikhil Sinha: Thank you, Chris. Enjoyed it.