4.

Cross-Pollinate

Connect Ideas and Networks from around the World

Silicon Valley thrives on the stereotype of the twenty-two-year-old college dropout building a company in a garage—combining youthful passion and a dose of grit to challenge age-old industries.

The stereotype is the stuff of legend. The storied founders of the world’s most successful tech companies support this trend: Apple (Jobs, twenty-one, Wozniak, twenty-six), Microsoft (Gates, twenty-one), and Facebook (Zuckerberg, twenty).¹

Yet prizing youth comes at a cost. Silicon Valley is known for its “tech bros”—the young, behoodied warriors often accused of building products and services to do tasks Mom doesn’t do for them anymore.

This should not come as a surprise. An entrepreneur builds companies based on their life experience. And a twenty-two-year-old’s experience is short, local, and often myopic.

At the Frontier, a typical innovator’s lived experience is longer and spans geographies, sectors, and industries. This diversity in experience explains the issues they choose to tackle and the unique approaches they employ.

The Road Less Traveled

Idriss Al Rifai is no stranger to challenges. He grew up in Iraq, but when the first Iraq war started, his family fled to Paris. Now he speaks with an unmistakable French accent. When Rifai was eighteen, he played professional basketball, ultimately representing France on its national team, playing alongside Tony Parker. Reflecting on why he left basketball, Idriss quipped, “I wasn’t Tony Parker.” He later joined the French Special Forces, where he led operations across Chad, the Democratic Republic of Congo, Mali, and Somalia. He was eventually recruited to become an adviser to the defense minister of France.

However, Idriss had always dreamed of returning to the Middle East and starting his own business. To equip himself, he pursued an MBA at the University of Chicago and then joined the Boston Consulting Group’s Dubai office.

Settling into his new life in Dubai, Idriss realized that critical business infrastructure he had seen elsewhere was lacking. His new job required him to procure items from all over the world, but often he could not get his packages delivered. The driver didn’t show up or would get lost, or the package would get delayed for any number of other reasons. As in Nairobi, there were no street addresses in certain parts of the city.

Dubai’s existing delivery infrastructure could not cope with the growth in e-commerce markets. For one thing, the United Arab Emirates faced an acute undersupply of drivers. To complicate things, e-commerce had to rely on customers paying for their items with cash on delivery, because large swaths of the population had no access to financial products (as in many emerging markets).

The system was fragile and unreliable. When customers ordered items online, merchants hoped for three variables to work in their favor: first, that the address existed; second, that customers would accept the delivery (having not yet paid, customers could reject packages if they changed their minds); and third, that customers would have cash to pay for it. If any aspect did not go according to plan, the drivers would be unable to complete the delivery and the merchant would eat the cost of the returns. Unsurprisingly, this was a huge burden to e-commerce players.

To solve this challenge, Idriss founded Fetchr, a last-mile logistics company for the Middle East. Using an app, consumers can better track when packages will be delivered and can be ready to accept them. Drivers can be much more effective through trip planning and route optimization.

Not Your Typical Silicon Valley Entrepreneur

Although Idriss’s personal story is exceptional, it illustrates key qualities many Frontier Innovators share.

Like Idriss, Frontier Innovators often have significant lived experience; they rarely start their businesses at age twenty-two. Indeed, the average founding age among leading startups in Latin America, Africa, and Southeast Asia is thirty-one.² Idriss was in his mid-thirties when he started Fetchr.³ Emerging-market entrepreneurs also tend to have more educational and entrepreneurial experience. An analysis of the portfolios of more than forty accelerators around the world revealed that entrepreneurs in emerging markets have 1.65 university degrees on average (compared to 1.45 in developed markets) and worked at an average of 2.8 companies prior to founding their new organizations (often reporting to the CEO or executive director in previous roles).⁴

It is not just age that matters, but what Frontier Innovators do with their additional years. Many of the most successful Frontier Innovators have lived and worked in multiple countries. Of the ten unicorns (a term I’ll continue to use herein as a metric of valuation rather than endorsement of the philosophy) built in Southeast Asia over the past ten years, eight had founders that had studied, lived, or worked abroad.⁵ Unsurprisingly, a similar overrepresentation exists in Latin America, where well over half of the founders of Latin American unicorns had worked or studied abroad.⁶

Even those who did not have global experiences early in life cultivated them later. Among a sample of founders of leading unicorns across Latin America, India, Southeast Asia, and Sub-Saharan Africa, 23 percent belong to global fellowships or leadership development programs, including Endeavor or World Economic Forum, and 22 percent joined global accelerators.⁷

Frontier Innovators are thus cross-pollinators. They bridge information across geographies, industries, and sectors to create novel business models or solutions. Unsurprisingly, at least for those outside the Valley, being a cross-pollinator drives performance.

Cross-Pollinators Access the Innovation Supply Chain

Innovation is moving in integrated global flows. The innovation supply chain describes the phenomenon by which the best ideas traverse continents and improve with successive waves of adaptation.⁸ Cross-pollinators leverage the innovation supply chain to find multiple sources of inspiration for their models.

Ride sharing, for instance, started as an innovation pioneered by Uber and Lyft in San Francisco. Startups rapidly exported the model across the globe and adapted it, sometimes significantly, to reflect local needs. Gojek, the ride-sharing app from chapter 2 that is now the dominant local player in Indonesia, did not merely replicate Uber. Rather, Gojek’s approach improved upon the ride-sharing model, maximizing driver engagement throughout the day by not only transporting people but also delivering food, packages, and even financial services.

Gojek’s strategy incorporates inspiration from China as well. China’s technology ecosystem rivals Silicon Valley in many ways. In payments, Ant Financial (Alibaba’s $150 billion financial technology affiliate) operates the world’s largest mobile payment platform, Alipay. To pay or send money via Alipay, users leverage the social network and unique QR codes (a computer-readable graphic that embeds simple information or an online link). Tencent’s WeChat (Alibaba’s archrival) has created an entire ecosystem of products and services, spanning payments, ride hailing, shopping, and food delivery on its social network. Both are ubiquitous in major Chinese cities.⁹ Replicating WeChat and Ant’s functionality, Gojek evolved its model to include a payment platform as part of a broader super-app—one platform to rule them all, with the ambition to offer consumers every possible service in one place.

The multidirectional exchange of ideas continues, and in this case has gone full circle. Some of Uber’s recent product launches, such as Uber Eats and its Uber credit card, seem more akin to Southeast Asia’s model.¹⁰ Fittingly, Uber recently repackaged these products into its own super-app.¹¹

Frontier Innovators tap in to information about which innovations are thriving, along with where and why that’s the case. With this data, they are better positioned to conceive of innovative models.

One approach is to focus on “superconductor” locations such as Silicon Valley. In this way, learning from the Valley is still of value. As JF Gauthier, CEO of Startup Genome, told me, “Talk to ten seasoned global venture capitalists in Silicon Valley. They probably have met a meaningful subset of the startups in your space globally. Talk to fifty, and you probably will get to know of a good portion of the ecosystem.”¹² That’s because many innovators from around the world have also come to Silicon Valley and met the same venture capitalists.

Of course, Silicon Valley is only one of many hubs that matter. China is emerging as a global leader, and certainly some of the pioneering models in e-commerce and fintech outshine what we’re seeing in the United States. Kenya remains the place to go for innovation in mobile banking on non-smart phones. Toronto and Montreal are artificial intelligence hubs. Minneapolis is a thriving health care hub. Tel Aviv is a leader in security. London is a leader for fintech. If you are a Frontier Innovator trying to understand leading trends that can catalyze your business, or identify emerging threats to your nascent organization, superconductor locations will help you find answers rapidly.

Cross-pollinators combine their own lived experience with multiple ideas to conceive of their business models. For Idriss Al Rifai, building Fetchr required an understanding of what was possible, both by having firsthand experience of the issues and by bridging insights from multiple industries. Idriss was inspired by efficient last-mile delivery systems pioneered by the largest e-commerce players in the West.

In markets with limited street addresses, Fetchr leveraged advances made by emerging-market ride-sharing players that had perfected GPS-linked addressing and route optimization for their on-demand fleets. The solution also required insights from emerging-market financial services—most crucially, cash-based collection models—to facilitate deliveries for the unbanked. Finally, Idriss faced an acute driver shortage and so had to build an immigration strategy, which he developed in close consultation with experts who supported construction players in the region who similarly faced human capital shortages. Doing all this simultaneously required both the precision of a military operation and the competitiveness of a professional athlete. To devise his solution, Idriss also employed the strategic problem-solving skills he gained in consulting and leveraged his knowledge from working in remote parts of the world as well as his experience with government bureaucracy.

Similarly, Zola’s model combines multiple technological and business model innovations. Its home solar systems, targeted at the 800 million Africans living offgrid, are sold on a pay-as-you-go basis rather than purchased outright, making the program more affordable. The financing model required a lender’s ability to assess credit. In markets where most consumers don’t have credit scores, this was made possible by advances in alternative data credit scoring that were gaining steam in other emerging markets. If customers don’t pay, the solar systems can be turned off remotely. Advances in mobile phone technologies and internet of things (IoT) from Silicon Valley and elsewhere allowed Zola to place chips in the devices and remotely control and diagnose them. The units themselves were made affordable largely by economies of scale in solar panel and battery production globally, for the most part from China. Finally, the dominance of small transactions necessitated digital payments, which meant integrating mobile money—an African-born innovation. Devising this complicated model required combining multiple technologies and insights into a coherent whole.

To build successful businesses, Frontier Innovators balance an understanding of these global trends while rooting themselves in the local market and the needs of their customers. You’ll explore these joint dynamics in the next two sections.

Cross-Pollinators Tap Scarce Resources

Cross-pollinators’ experience can provide them access to a global network that pays meaningful dividends. Nowhere is this more evident than with access to innovation’s two most precious resources: capital and talent. As you will see throughout this book, in many markets there is a shortage of one or the other, and often both. The best Frontier Innovators are able to tap their global networks to devise solutions to these challenges.¹³

Idriss leveraged his global network to find capital around the world. So far, Fetchr has raised more than $100 million from leading Silicon Valley venture capital firms, European investors, and local venture capital firms. Similarly, Zola leveraged its founder’s global network to attract investment from diverse actors around the world, including impact investors in New Zealand, global development organizations, European corporations, and venture capitalists from Seattle, San Francisco, and London.

A cross-pollinator’s network also gives them access to proprietary sources of talent. In the next chapter, you will explore how Frontier Innovators position themselves to be multimarket from the get-go, and in chapter 6, you will learn how this sometimes translates into distributed organizations and teams.

Marrying Cross-Pollination with Local Context

A cross-pollinator’s perspective brings unique insights and resources to a problem. Of course, successfully building a business requires marrying this perspective with a deep and nuanced knowledge of the local problem you’re solving. Bridging the two makes the magic happen.

My favorite example comes from the world of online matchmaking in India. In 1996, Murugavel Janakiraman, who had been working in Silicon Valley, observed the rise of online news and classifieds. Inspired by these platforms, as a small side project he started a basic news website to offer a forum for the Tamil community in India and around the world.

When Murugavel launched the site, he was dismayed to see low user traffic. However, the matrimonial section, which was added as an afterthought, was surprisingly active.¹⁴ At the same time, he had the good fortune (in retrospect) of being laid off from his Silicon Valley role during the internet crisis of 2000. Murugavel decided to double down. He moved back to India to pursue the traction behind the matrimonial section full-time.

That’s when BharatMatrimony (the flagship brand of Matrimony.com)was born.

As younger generations of Indians transitioned from the countryside to cities and overseas, the traditional arranged matchmaking process was breaking down. Living away from parents and extended family, singles needed another solution to find their wives and husbands.

Digital dating services were proliferating around the world. However, what worked elsewhere would need to be adapted to the unique local Indian context. As Murugavel was building Matrimony.com, his peers elsewhere were confused by the features he was implementing, thinking they were either overkill or unhelpful, even at times destructive. For example, families occupy a key role in the Indian marriage world. For the site to offer a credible solution, it not only had to help users find potential matches but also had to allow parents to have an active role in the process.¹⁵ In only 60 percent of cases, adult children are the primary users (often in consultation with their parents). In many cases, parents are the principal users on behalf of their offspring.¹⁶

Murugavel had to further customize the product for specific requests. Cautious parents wanted more than to read about the suitor’s work status, education, and income; they wanted validation of these claims. Therefore, Murugavel created an additional service that validates users’ degrees through the platform.¹⁷ Matrimony.com also translated the site into multiple local dialects and created sub-brands for individuals who were looking to focus their search within their community, religion, or linguistic preference. And because Indian families value physical meetings with family present, an online-only experience was insufficient. Matrimony.com created three hundred brick-and-mortar locations to facilitate the process.

Today, Matrimony.com has more than four million users, arranges more than a thousand marriage matches daily, and is public on the National Stock Exchange of India. There are fifteen language-based domains catering to different regions of India, each with its unique language and cultural nuance.¹⁸

Murugavel is a cross-pollinator who combined best practices from Silicon Valley with his unique knowledge of the local market.

Similarly, as Mudassir Sheikha, co-founder and CEO of the Middle Eastern ride-sharing behemoth Careem (whom you will get to know in chapter 11), explained to me, “When Careem expanded to Iraq, we had to adapt to the fact that the country turns off internet and data during national high school exams so the questions don’t get leaked. The local team figured out the hack of allowing riders to make their bookings before this shutdown occurs.”¹⁹

For both Murugavel and Mudassir, adapting to the local context was the only possible path to scale.

Where the Frontier and Silicon Valley Must Do Better

Cross-pollinators’ outsized success is built on diversity—diversity in experience, culture, and worldview. But often, attaining a globe-spanning skill set and network is possible only for the most privileged members of society. In this way, diversity remains limited across much of the innovation landscape—both in Silicon Valley and at the Frontier.

In US venture capital, 90 percent of decision makers (partner level, primarily) are male.²⁰ Fewer than 20 percent of technology startups have even one female founder, and female-led startups received less than 2 percent of the capital available in 2018.²¹ This is not just about gender. In the United States, 1 percent of venture-backed founders were black, 2 percent were Latinx, and 3 percent were Middle Eastern (regardless of gender).²² Similarly, the majority of Frontier Innovators, particularly those who reach scale and gain international attention, are men.

Regretfully, this book is an example of this shortcoming. When looking for interview subjects, I came into contact with far fewer women, perhaps because I was not looking hard enough or not correcting the bias of my trusted sources strenuously enough. In any case, this gender imbalance unfortunately is also documented in this text. My hope is that by the time I write the sequel, the industry will have made meaningful strides in the right direction. To truly unlock the world’s entrepreneurial talent, we need an environment that enables all genders and people of all backgrounds to succeed. Nor can we sit passively by and wait for these conditions to develop. For starters, diversity, equity, and inclusion initiatives are growing in both popularity and sophistication in the corporate and nonprofit worlds, and joining and furthering these conversations is a great first step for those in positions of power. Solving this at the most senior levels is critical. Research by Kauffman Fellows indicates that startups with at least one female on the founding teams hire two and a half times more women than their less diverse peers.²³

There are some interesting bright spots in the gender imbalance of the founder landscape in the Arab world. As MIT Technology Review notes, more than 25 percent of Middle Eastern startups are founded or led by women.²⁴ Hala Fadel, co-founder of Beirut-based Leap Ventures, says it is because the region has no male-dominated legacy in the field. Because so few career paths are open to women and because the unemployment rate is often very high, starting technology startups, often from their own homes, is an attractive opportunity for women.²⁵

While Frontier Innovators bring greater ethnic and cultural (and occasionally gender) diversity to the world of tech innovation, dramatic economic inequality in their home countries often enables their success as cross-pollinators. Accessing international education or working in challenging roles at global consulting firms or investment banks is often a reflection of privilege. Becoming a founder is itself a reflection of a certain level of opportunity and an ability to take financial risk. In many markets, institutional capital is scarce, and early capital is often nonexistent. Startup capital often depends on family and friends. In most emerging markets, with hollowed-out middle classes, raising early capital requires wealthy connections.

The prevalence of startups in Sub-Saharan Africa that are founded by expats from Europe and North America also raises important questions about white privilege. In these markets, white expats often enjoy comparatively greater access to capital and networks, even though locals have a far deeper understanding of their own problems and opportunities. Drawing attention to this imbalance is not meant to undermine or undervalue expat founders’ herculean efforts, but rather represents an effort to open space for constructive dialog on changing the status quo.

As American paleontologist Stephen Jay Gould once said, “I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.”²⁶ Innovation at the Frontier will benefit immensely from the talent of people from all economic strata and all genders. Empowering those people as contributors and leaders will be transformative everywhere.

Immigrants: The Ultimate Cross-Pollinators

Lin-Manuel Miranda said it best in his musical Hamilton: “Immigrants, we get the job done!”²⁷ Immigrants are the ultimate cross-pollinators, bringing life experience from another country or geography. Like Murugavel and Idriss, and like Xavier Helgesen of Zola, repatriates and immigrants have had disproportionate success in scaling innovations and kick-starting ecosystems.²⁸

For definition’s sake, repatriates are citizens of a country that choose to return after spending meaningful portions of their careers abroad (much more than one school degree or a single international job experience). Immigrants are citizens of various countries who settle elsewhere.

At the Frontier, repatriates are often among the early set of entrepreneurial successes. For instance, in India, a large part of Bangalore’s leaders of the first wave of startups were “boomerangs”—repatriates who had spent significant time in other geographies, often in Silicon Valley.²⁹ They brought global learning home with them, enhancing their local ecosystems and enabling subsequent waves of homegrown aspiring entrepreneurs.

In this day and age, immigration has become a hot button issue in the United States and internationally. Yet the data is unequivocal, in the United States just as much as at the Innovation Frontier: immigrants play a central role in technological innovation. Between 1995 and 2005, immigrants co-founded 52 percent of all technology startups in Silicon Valley (and represent 25 percent of all entrepreneurship in the United States writ large).³⁰ Immigrants’ role in the most successful startups is equally notable. According to a recent study by the National Foundation for American Policy, more than 50 percent of US-based unicorns were founded by immigrants. These fifty companies have a collective market capitalization of nearly $250 billion, which, for perspective, exceeds the stock markets of Argentina, Colombia, and Ireland.

Further, more than 80 percent of US unicorn companies have an immigrant in a key executive position.³¹ This includes some of the best-known companies in the world, such as Houzz, Instacart, Palantir Technologies, Robinhood, Stripe, Uber, WeWork, and Zoom. This of course also includes Silicon Valley’s golden child, Elon Musk, who co-founded four unicorns—Tesla, SolarCity, PayPal, and SpaceX—and recently also launched Neuralink and The Boring Company. Musk was born in South Africa and immigrated first to Canada and ultimately to the United States.

Our learning on cross-pollinators provides yet another counterargument to the troubling anti-immigrant narrative that is permeating politics in the United States and around the world. As Jeremy Johnson, co-founder of Andela and 2U, once told me, “The Statue of Liberty reads, ‘Give me your tired, your poor, your huddled masses yearning to breathe free.’ This is the most exceptional thing that we do [in the United States].”³²

Removing the Hood

Stepping into the shoes of Frontier Innovators helps Silicon Valley challenge and reevaluate its own stereotypes.

Silicon Valley’s obsession with youth and its outward ageism is misplaced.³³ Yes, Jobs, Gates, and Zuckerberg were young when they started their businesses, but research from the National Bureau of Economic Research suggests they are outliers and not the average. The average technology startup founder at founding is forty-two years old, and among the most successful (the top 0.1 percent), the average age is forty-five.³⁴ Research indicates that when a startup’s founders work at a company for twenty years or more, it is more likely to be a top performer in its local startup ecosystem.³⁵

Even among the founders of the most successful companies, performance improves with age. Five-year multiples (the price an investor would pay for a dollar of revenue or earnings) peaked in early middle age for Bill Gates (thirty-nine), Jeff Bezos (forty-five), and Steve Jobs (forty-eight).³⁶

More-experienced founders are the ones who typically scale successful businesses. Immigrants occupy a central role. More-diverse gender, economic, and other representation is needed to realize the promise of innovation both in Silicon Valley and at the Frontier. After all, inspiration requires combining a range of ideas to create something new, and increasing the diversity of those ideas is what cross-pollination is all about.