At the Case Foundation, we are excited about a new book that’s hitting the stands this week: The Innovation Blind Spot, written by my friend, and long-time Case Foundation partner, Ross Baird. True to its title, the book portrays the current state of entrepreneurship, investment and innovation in the United States today, and does so through a prism of “blind spots” that currently inhibit growth and opportunity. But rather than simply laying out the challenges, Ross lays out a “playbook” of how to overcome these blind spots.
The book kicks off with some pretty worrying statistics. While entrepreneurship is—and always has been—at the core of our DNA in America, and many believe it is what sets us apart as a nation, it turns out that entrepreneurial activity is actually at 40-year low in the US—more businesses are dying each day than starting.
Sure, there are sectors that are thriving in our “innovation nation”—particularly big companies, elites on the coasts and those who have historically had access to capital and networks. At the same time, others across the country are literally being left behind in the innovation economy—particularly women, people of color, those in the middle of the country, and those who come from less familiar places and backgrounds. Indeed, the data makes this clear: Less than 10 percent of venture capital goes to women; less than 1 percent to African American founders. An overwhelmingly disproportionate share goes to a limited few: last year a whopping 75 percent of all venture capital went to just three states—California, New York and Massachusetts and 10 percent of all startup financing went to graduates from just six universities. Ross, who has joined every one of my husband Steve Case’s Rise of the Rest road trips, intimately understands the hurdles this poses for innovators who come from diverse backgrounds. Indeed, the Innovation Blind Spot in many respects seems almost like a companion to books like Adam Grant’s Originals or The Third Wave, authored by Steve in 2015.
As all of these books make clear, great innovations come from unexpected people and places, and we need to go the extra mile to identify and support them. “The simple truth,” Ross says, “is that the current model for venture capital—for backing new ideas—is bad for all founders who don’t fit the pattern. It’s bad for investors, too, because the biggest venture capital firms, concentrated in the biggest cities, aren’t necessarily set up to invest in the most innovative ideas.”
The first step in overcoming this blind spot? Understand that every investment decision has bias: embrace and mitigate it, Ross says. People invest in and support people they know and understand. The Innovation Blind Spot goes into enlightening detail on how cognitive bias, not the quality of idea, affects whether someone gets funding.
Add to this, the blind spot that Ross calls “two pocket thinking”: how we artificially separate our jobs and our careers from our values. Walking through the modern history of business, philanthropy and investing, Ross challenges the traditional idea that business and investing need to be separate from the interest of building a better world. “If we live in a two-pocket world, where business has no responsibility for what happens in society, we’re fighting a losing battle,” says Ross. While we’ve had 100 years of “make your money, then give it away” as the way things have been done, Ross provides a compelling mix of data and storytelling that challenges this approach, and lays out ideas for how best to spotlight cities and companies on the rise and to blend business, social good and investing, much as he has done through his own venture capital firm, Village Capital.
I encourage you to pick up a copy of The Innovation Blind Spot today, and more importantly, I encourage you to be fearless with the ideas you look for, support, and invest in.
*Disclosure: Jean and Steve Case are investors in Village Capital.
