Today I had a good laugh when reading a great article in the Frankfurter Allgemeine Zeitung about the German economy Minister’s visit with some German startups to the Silicon Valley. Here a sample:
Auf ihrer medial entweder ignorierten oder aber behämten Reise ins Silicon Valley haben Philipp Rösler und seine deutsche Start-up-Delegation mehrere wertvolle Erfahrungen gemacht. Eine davon kennen die meisten Kinder aus dem Sandkasten. Da sieht man an einem Tag zu, wie die großen Jungs Ritter spielen und sich mit selbstgeschnitzten Schwertern die Köpfe einschlagen, aber wenn man am anderen Tag dann mit dem von Mutti in aller Eile gekauften Plastikschwert und Helm dasteht, um mitzuspielen, muss man feststellen, dass inzwischen alle Cowboys oder Indianer sind.
So why is there such a great gap between the Silicon Valley and the startup scene in Germany or many other European clusters? I list a few points here that I saw during the five years I spent there:
- venture capital with real money
- lawyers who understand the startup business (I doubt you will find anyone in Europe), great universities (here we have good ones too, but only few professors understand startups)
- entrepreneurs (this is a chicken and egg problem; without the money and the other things fewer entrepreneurs will be willing to hop jobs until they find their fortune)
- labour laws (most European countries find loopholes but in general there is no setup for risky ventures)
- exit possibilities: try to copy the stock option model that all Silicon Valley startups have in Europe and you will find yourself spending more money on HR and legal advisors than on your product
- real estate: I suppose Berlin and others have found solutions to this one, but of course size and flexibility are from a different planet in Silicon Valley (you do not have to sign 5-year contracts)
- successful startup managers (many who had a successful startups before are ready to manage new startups)
- venture capitalists with not only a lot more money than anywhere else in the world but also with much more competency than anywhere else
- brand: Silicon Valley is a brand, no doubt
- it’s the weather: yes, no joke, sunshine all year around creates more of the spirit for venturing and trying out new – risky – things; that is simply a fact
- it’s the multicultural spirit, where else do you find so many Asians, Latinos, Indians, Europeans, Americans all working in one place?
- work culture: job-hopping is the norm and not abnormal, period.
- attitude to risk: failure is normal and necessary to have success one day; no-one will have any problems with a CV where you have been working at 5 places in 5 years