The Innovation Mindset: A Blueprint for Founders and Visionaries
Last year I embarked on a journey (chronicled in my blog Ignore the Confusion) from leading an intellectual property analytics and strategy firm to launching Future Frontier Capital, a pre-seed venture capital fund. This blog’s title stems from a profound line from the introduction to the Hindu text, Yoga Vasistha:
“The Yoga Vasistha is the greatest help to the spiritual awakening and the direct experience of the Truth. This is certain. If this is what you want, you are welcome to YogaVasistha.
The text abounds in repetitions which are, however, not repetitious. If you do not like (or need) repetition, then read just this one verse:
‘This world appearance is a confusion: even as the blueness of the sky is an optical illusion. I think it is better not to let the mind dwell on it, but to ignore it.’ (I.3.2)
This verse occurs several times in the scripture and it seems to be the very essence of the teaching. If that is not quite clear to you now, read the scripture. The numerous ways in which this truth is revealed will help open your mind. It is wise to read just one page a day. The teaching is revolutionary. The biased mind does not readily accept it. After the daily reading, meditate. Let the message soak through.”
Over the past nine months, I have contemplated the meaning of the above verse. How could the entire 700 pages of wisdom in Yoga Vasistha be summed up in these words?
Reading deeper into the text, the author uses several examples to help the reader understand its meaning. Recently, I came across a compelling passage:
“Even as thought or idea 'sees' blueness in the sky, the mind sees the world as real. There is no blueness in the sky: the inability of the sense of sight to see beyond a certain limit appears as blueness. Even so, it is only the limitation of thought that perceives the world appearance. This world appearance is delusion, it is better not to let the very thought of it arise again in the mind.
By thinking 'I am lost' one comes to grief, and by thinking 'I am alert' one goes towards bliss”
This passage resonated with me, particularly in the context of the technology commercialization course I currently co-teach at UC Berkeley. The course revolves around forming teams of students with backgrounds in engineering, business, and law to commercialize deep-tech innovations from Lawrence Berkeley National Lab.
Based upon ideas developed by Bowman Heiden, my colleague Lee Fleming and I introduce students to theoretical models related to
generating technology trees
identifying technology assets
analyzing patents and scientific literature to understand control positions
speaking to people with domain-relevant technical and business expertise to gain insights into achieving product-market-fit.
This process diverges from conventional I-Corps or Lean-Transfer assessments that primarily hinge on customer discovery. We firmly believe that grasping essential details about the technology, its landscape, and control positions precedes consultations with experts. Given that many students lack technical knowledge regarding the early stage technologies from the lab, we encourage them to adopt a growth mindset to surmount this knowledge gap.
As the students acquire a sufficient grasp of the technology, we encourage them to devise creative strategies for leveraging control positions to secure product-market-fit - a pivotal step in commercializing technology. This requires the adoption of an innovation mindset.
Innovation Mindset is Essential For Entrepreneurs and Founders
Innovation mindset, according to this blog post, necessitates embracing change, acknowledging the perpetual transformation of the world, and staying attuned to the direction of where this transforming world is heading.
This innovation mindset holds equal significance for startup founders establishing successful frontier technology companies. To effectively navigate the turbulence and uncertainty inherent in bringing innovative solutions to the market, founders must also adopt an innovation mindset.
Vasistha’s words eloquently underscore the importance of an innovation mindset. Once more, the passage reads:
“Even as thought or idea 'sees' blueness in the sky, the mind sees the world as real. There is no blueness in the sky: the inability of the sense of sight to see beyond a certain limit appears as blueness. Even so, it is only the limitation of thought that perceives the world appearance. This world appearance is delusion, it is better not to let the very thought of it arise again in the mind.
By thinking 'I am lost' one comes to grief, and by thinking 'I am alert' one goes towards bliss”
These words are inspirational.
They encourage students and founders to transcend limited perceptions and thought patterns. To be successful, an innovation mindset forces us to challenge assumptions, see beyond limits, overcome mental barriers, embrace change, maintain a positive outlook, and solve problems. These qualities are essential for those seeking to drive innovation and make a meaningful impact in the world of entrepreneurship.
How FFC Identifies Founders with an Innovation Mindset
The innovation mindset plays a pivotal role in selecting founders. At Future Frontier Capital (FFC), our deal screening and diligence processes extend beyond software tools to identify distinctive technologies in technology landscapes. We place substantial emphasis on discerning founders with an innovation mindset.
Recent technologies that piqued our interest—such as feeding algae to cattle to mitigate methane emissions, extracting lightweight metals without traditional mining methods, and developing adhesive materials inspired by nature—were all underpinned by founders who convinced us to invest. Beyond our commitment to supporting companies led by underrepresented founders or those with diverse backgrounds, the founder's mindset is of critical importance in our decision-making process. An innovation mindset is paramount.
Since investing, all three founders have utilized an innovation mindset. Each made decisive moves that steered their companies toward new trajectories, often contrary to their initial direction. This mental framework is indispensable to scaling a frontier technology startup.
Tranche Investing Enables Founder Vetting:
FFC’s investment model allows us to assess founder mindset before investing substantial capital. Our investment thesis is based on three key criteria:
Access to very early deal-flow from relationships with graduate students, researchers, technology transfer offices, and patent attorneys.
Using proprietary software to identify companies with unique control positions.
Offering specialized guidance on intellectual property and commercialization strategy to help startups secure strong control positions before scaling.
Our plan entails deploying approximately 40% of our capital (initial tranche) across 75-100 companies over three years. Subsequently, we allocate 20% of the fund (second tranche) to 20-30 companies that meet milestones and exemplify the innovation mindset. Finally, we allocate the remaining 40% (follow on capital) to ten to 20 companies demonstrating success. This unique capital allocation model allows cost-effective access to numerous companies while reserving substantial capital for further investment in winning teams.
Furthermore, our tranched investment strategy enables us to invest very early. This gives us a "first-look" advantage, granting insight into founder mindset. While we collaborate with founding teams over twelve months post-investment, we assess concrete metrics such as the technology, and the team's ability to reach milestones. We also evaluate less-defined criteria such as whether the founders embody an innovation mindset.
This direct experience working alongside startups provides valuable insights to determine whether to invest additional capital.
To achieve success, it is imperative for students, founders, and innovators to embrace an innovation mindset. Inspiration can manifest in myriad forms, and the line from Yoga Vasistha encapsulates this concept in a captivating and thought-provoking manner.
To all students, founders, and innovators, remember: "This world appearance is a confusion: even as the blueness of the sky is an optical illusion. I think it is better not to let the mind dwell on it, but to ignore it."
Stay focused, but never be limited by your own thinking.
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This post was written by Matt Rappaport with Editing input from Rohit Gupta