Sarah Lacy is a senior editor at TechCrunch, the world’s largest blog on tech entrepreneurship, and the author of the critically acclaimed Once You’re Lucky, Twice You’re Good. After more than a decade covering business in Silicon Valley, Lacy decided to follow the flow of capital into the developing world. She bootstrapped a two-year, 40-week journey looking for the best entrepreneurs Silicon Valley had never heard of. The result is her recently released book Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos. Here are my notes from her talk.

  • We have to start paying attention to the rest of the world.
  • Decided to bootstrap the book project to travel around and find stories of emerging markets and economies. Most people who write about emerging markets have a connection to them. As an American I wanted to find out what was going on.
  • The first thing is due to The Market. More than 50% of world’s population surging into middle class. In Brazil the average income has gone up 15%, India and Russia has doubled and China has tripled. Huge surge in affluence. We tend to look down on people in sweat shops in China, but it’s empowering people over there. It’s getting people in the middle class.
  • In 2050, the USA will be the only G7 nation that will still have one of the top economies in the world. China will be almost double our economy.
  • The second thing is Cultures of Innovation. You need that culture to find opportunities. Here’s a picture of Israel in a nutshell, thousands putting Mentos in Diet Coke. When your family is getting bombed, and you have to serve in the military, it’s nothing to risk to do a startup. It’s a culture of risk taking there. Israel gets venture capital because of it. A culture of innovation.
  • The third thing was to Follow the Money. It use to be that venture capitalists would not invest in you unless you were local, or were close. Not anymore. 2 of the 5 largest companies are Chinese. A third of the IPOs last year were Chinese.
  • The fourth thing is Plenty of Problems to Solve. Emerging markets face problems we never had to face. We’ve had plenty of time to develop solutions without the pressures and variables that people face today. Western solutions don’t work in these other areas. Countries have to develop in ways America never had to and face difficulties America never had to face.
  • Innovation I Found
  • China: Innovative Monetization. They have a bad rap for being copycats.
  • Priced things cheap so people would buy in China. Built third largest Internet company in the world off of that.
  • India: Innovative Delivery. Only 14 million people in India are in the formal economy. 66% of India lives in a rural village. Don’t have access to water, power, good sanitation or roads. They have provided access to cell phones, though, from savvy companies. Everyone has a cell phone in India seemingly (600 million had them) because the cost is $6 a month. Figured out a way to make it cheap.
  • Bureaucracy is a million times worse in India. With cell phones, people can follow up with their government officials to get solutions to their problems. Before, they wouldln’t be able to because of not being able to travel to where the official was.
  • Most villages only get water for one hour a week in India. They use to not know when it would come. Now, having text message alerts for when it comes, now, lets people be prepared for it instead of not knowing when it would come.
  • Why are we giving poor people cell phones and computers? Don’t they need food and water? People who think that are wrong.
  • Brazil: Innovating the Old Economy
  • It’s the 4th largest exporter of agricultural products in the world. 80% of Brazil runs on hydro-electric power. More than 90% of new cars sold in Brazil can run on gas or ethanol.
  • New homes in Amazon basin. People building homes at record speed for jungle inhabitants who are being displaced.
  • Solving problems we never would have thought of.
  • Rwanda: Innovative Society
  • 16 years ago they had horrific genocide. Countries felt bad, so they gave aid but no investment. The President used aid to build forward.
  • Jogging is considered opulence in Rwanda, because you must be doing well that you have to burn calories.
  • They’ve instituted a one laptop per child program. Rwanda is investing in the future.
  • What’s the biggest barrier to innovation? Making excuses!
  • Fourth highest grossing theme park in world is Anchol.
  • Watch what people consume and then ask them questions about how to improve it. Research loopholes on all the products to find bigger margins.
  • No one has an excuse.
  • The World has been upended. A lot of the innovation and growth is going to come from elsewhere. Not America.

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