T2 Venture Creation: Invest in the rainforest

In May 2007, a new venture firm introduced itself with a high-school problem: the geeks and the jocks were still sitting at different tables. The scientists had discoveries. The businesspeople had resources. T2 Venture Capital proposed to bring them together. Beneath the jaunty pitch was a serious observation. A technology could be promising and still go nowhere because the people needed to commercialize it inhabited different worlds.

T2 Venture Creation, as the firm later became known, made that distance its subject. It combined early-stage investing with advice for organizations trying to produce more entrepreneurship. Its unusual move was to treat the environment around a startup as something worth working on. The company mattered both as an investor and as a translator between the venture world and the people trying to build one.

The first product was a connection

Co-founders Victor W. Hwang and Greg Horowitt arrived with networks already attached. Hwang had been president of Larta Institute, the technology commercialization organization from which T2 emerged. Horowitt led Global CONNECT, an international network supporting technology startups. Their advantage began upstream of a conventional pitch meeting, among researchers and the institutions helping discoveries reach a market.

The inaugural fund, T2 Venture Partners, L.L.C., announced its initial close on May 15, 2007. Its launch described connections to 28 universities and technology organizations in 20 countries. Those were access points, rather than portfolio counts. The commercial problem was finding the people and resources that could turn research into a company someone would actually buy from.

“The translational gap between science and business is a major bottleneck in the economy.”Victor W. Hwang · 2007

T2’s expertise sat at that handoff: research commercialization, venture formation, capital, and introductions. A 2013 industry event biography listed Horowitt’s involvement in portfolio companies including Biomatrica, Independa, GroundMetrics, and Somark Innovations. Technology and healthcare supplied concrete work behind the theory. These were businesses with scientific and commercial questions to resolve, rather than an abstract exercise in being innovative.

Then the surroundings became the business

In a Kauffman Fellows update published in 2014, Hwang credited his fellowship and an earlier article with helping transform the firm. The business had expanded from a venture boutique into an organization that also designed entrepreneurial ecosystems. The name change, from Capital to Creation, made that expansion visible. The unit of attention had grown from one company to the conditions around many.

That opened a different customer base: corporations, governments, development institutions, and regional leaders. Hwang’s account of T2’s work names engagements involving the World Bank, USAID, the Inter-American Development Bank, and the U.S. Economic Development Administration. For these organizations, the question was how to help entrepreneurship happen across a community, rather than how to finance a single promising founder.

T2 occupied the intersection of an investment firm and an innovation consultancy. Investing backed companies; advisory work helped institutions examine their own systems. Publishing, professional development, and sponsored gatherings extended the approach. The combination gave T2 several ways to distribute its thinking, while asking customers to consider relationships as part of economic infrastructure.

A rainforest has room for surprises

The founders’ 2012 book, The Rainforest: The Secret to Building the Next Silicon Valley, supplied the organizing metaphor. A plantation is arranged for a predictable crop. A rainforest permits unexpected combinations. Applied to organizations, the distinction asks whether procedures built for repeatable production leave enough room for unfamiliar ideas, people, and experiments.

The mechanism, in their account, is human behavior. Trust makes collaboration easier. Openness lets information travel. People willing to help outside their immediate circle create connections that a formal organizational chart might miss. This was a philosophy of innovation culture, with implications for how companies and public institutions organized their work.

T2 translated the framework into practical formats. Rainforest Architects offered professional development for ecosystem builders. Horowitt designed the Rainforest Canvas. In January 2015, T2 announced Henry Doss and Alistair Brett’s Rainforest Scorecard, an assessment framework inspired by the Baldrige quality program. The progression was useful: explain an idea, help people apply it, then give them questions for examining their culture.

Put the theory in a room

The Global Innovation Summit made the work social. Its first edition, in 2012, drew more than 400 innovators from 49 countries. By 2014, an associated innovation week involved more than 20 Bay Area groups. Sponsors included Microsoft’s Bing, USAID, and the City of San Jose. The participants crossed the same institutional boundaries that T2’s original fund had sought to bridge.

The 2015 agenda emphasized interactive learning and hands-on design prototyping. People charged with improving entrepreneurial communities were invited to practice building together. That is a useful distinction for anyone organizing a workshop: a room full of relevant people is a starting condition. The activity must give them a reason to exchange knowledge and do something with it.

The idea travels beyond the firm

In March 2016, T2 announced that its consulting practice would spin out as Rainforest Strategies. Hwang was moving to the Kauffman Foundation. The Rainforest Revolution newsletter would end after reaching about 20,000 people every week or two, according to his farewell note. T2’s methods were taking a new organizational route.

A reader can borrow a modest version of the approach. Identify a useful connection that repeatedly fails to happen. Bring the people involved together around a small, concrete project. Watch who participates, what gets shared, and whether anyone follows through. That is an application of the framework, rather than a claim that a workshop can manufacture an innovation economy.

The conditions matter. People need permission to experiment and a reason to cooperate. Better connections cannot establish customer demand or settle scientific uncertainty. T2’s enduring question is more specific: when a community already has talent, research, and money, what prevents those ingredients from meeting? Before buying another building, it is worth looking at the tables people sit at.