In her own words, it is, “Very interesting (and)…although nothing new, but to see it being said again by a young man in 2007 makes it worth paying attention to. “
The piece is written by Kulveer Taggar, CEO of boso.com and he writes about why he moved to Silicon Valley and why California is the place for those with entrepreneurial spirits.
Kulveer cites a few reasons behind his move:
• Chance meetings and chance conversations
• Expensive London
• Competition for talent in London (with I-Banks and consulting firms)
• Difficulty in raising capital
He also mentions how in California:
• The spirit of co-operation is strong.
• “Networking” isn’t something that has to be organised or encouraged, it just happens.
• The weather is great and the vibe is friendly, optimistic and ambitious!
• Big thinking is encouraged and not frowned upon as is sometimes the case in London
While Silicon Valley no doubt is “a great place to start a company because there is more capital, a bigger talent pool , and because the most important companies and people are here”, I really think that Kulveer is a bit harsh at times, e.g. “The risk appetite amongst British investors is low, and it was also frustrating that I often ended up educating investors about the internet in general.”
Below are some excerpts from Saul’s excellent post…but do try and read the original in full and also the comments….lots and lots of good thoughts there…
“…we’re starting to turn a corner in Europe as we start to leverage some of our emerging assets. We’ve always had great talent (especially in academia & research institutions), but now we also successful entrepreneurial role models, sophisticated early-stage financing and the ability to start and test businesses at low-cost as well.
We should stop worrying about why we’re not Silicon Valley and start thinking about what we can do with the great advantages we have.
…Silicon Valley is unlikely to ever be equaled as a magnet for innovation unless something very fundamental changes, but there is no reason why London in particular and Europe in general can’t start to really compete in the creation of global success stories.
So how can Europe start to compete?
1. Availability of Talent
Europe has incredible depth and breadth of talent. Skype is perhaps one of Europe’s first global Internet success stories and it has exposed me to some of the most amazing developers and product people working in technology today…this talent is world-class.
…Somehow we have persuaded ourselves in Europe that the US has all the talent, but if you look at the chart from Eurostat below you’ll see that in 10 European countries including Lithuania, Ireland, Belgium and Switzerland have more science & technology graduates per head of population than in the US.
…Critically, we still don’t have a deep pool of experienced startup talent in Europe, but one positive from the bubble of the late 90s is that it bloodied a generation of employees who know what it’s like to ride the roller coaster of success and failure in a startup. Of course Silicon Valley and Boston has several generations of this kind of employee but tasting and learning from startup failure (as well as success) is something which Europe needs more time and experience to compete.
Many would argue Europe also needs a major change of attitude (and possibly legislation) here. Failure or bankruptcy is not culturally accepted in Europe, but if we want to encourage the abundance of talent to start and join early-stage companies trying to change the world, we need to accept there will be many many more flops than hits.
2. Sophisticated Funding
A major part of supporting success or failure is funding. Library House have just conducted some very interesting research which breaks down venture capital investment into geographic clusters which takes an analysis of the US market beyond the national level. In this view, California and Boston are way ahead of the game but the UK is #3 worldwide in terms of investment.
…Ambitious entrepreneurs have been educated to believe that you need to have a US investor to build a global business, but there is certainly a much more developed and competitive market for backing European entrepreneurs today than there was even 5 years ago.
…There has been quite an active discussion recently about the funding gap for European start-ups, but in funding terms, I don’t think there has been a better time to get a start-up funded in Europe. Index has just closed a €350m fund.
3. Role Models & Ecosystem
In Europe, we are only just beginning to recognize that if Niklas & Janus can do it with Skype, then why not others?
Why not indeed. There is nowhere near as many examples of people creating global technology businesses in Europe as in the US, but you just need a few examples. Skype was a watershed moment in how European entrepreneurs can think about their potential, both in terms of exit and global footprint (only around 20% of the business comes from the US).
We now have several businesses born in Europe that have the potential to make a global impact and they are spread across the Continent: including last.fm (London), Netvibes (Paris), Habbo (Helsinki), FON (Madrid), Skype (Tallin & London) and Rebtel & Stardoll (Stockholm). We also have a generation of second and third time entrepreneurs who are not only helping to seed the next generation but are also now focussed on building their own new businesses.
Perhaps one of the key factors that is swinging into Europe’s favour is the changing dynamics of the Internet and globalization. Ten years ago, in fact even five, you could not consider building a global technology business without starting in the US but that is not true today.
The Internet outside the US is bigger than the inside and that trend is only accelerating.
…YouTube is already over 65% international in less than two years from launch
…Against many important measures — broadband penetration, % online advertising spend and mobile phone adoption — the US is no longer the world’s most important market.
Skype again is a great case study of a business that did well to look East before it looked West. Today Asia is a major part of its community and several developing country markets like Poland, Brazil and Turkey are very significant as well.
European companies are ideally placed to take advantages of these globalizing trends and not just because of their location.
Location is important, but in this case, an attitude which is attuned to being open to other cultures is actually more important.
…If you start your business in Tel Aviv, Stockholm or Tallin you can bet you’re thinking from day 1 about how you can take your products to a global market – if you start your business in Palo Alto, international is probably an after thought.
5. Start Up Costs
Open source technologies have evolved to a level of maturity and popularity that if you are a talented developer with a great idea for an Internet application your only really significant costs are your time.
…The barriers are now incredibly low for creating software applications which you can get out onto the Web, expose to a global audience, get feedback and iterate.
…We have a great opportunity today to test more ideas, which we can do very quickly and cheaply, and start businesses which have a better chance of succeeding.