Tag: Silicon Valley

Ralf HallerRalf Haller May 27, 2013

When Europe meets Silicon Valley

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
Now is there hope for others going to the Silicon Valley for a similar trip? Yes there is and it’s both simple and difficult. You need to think the way the folks there do and answer one key question: “What is in it for me?” I suppose Philipp Rösler and his crew did not do that, and if they did, only found the wrong answers… good news for them though: you can try again, they will forgive or not remember you. Times are changing too fast to think about what someone did wrong in the past.
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Ralf HallerRalf Haller June 8, 2010

Silicon Valley – why many Europeans don’t understand how it works

I just read an article in the German newspaper FAZ saying that Silicon Valley is back. The article talks about Apple mainly, also mentioning a few well-known others such as Oracle, Intel, EA and – at least one that is not that well-known to the public – NetApps. This article is one more proof of how little people in Europe understand the high-tech center around San Jose, now spreading further north into San Francisco as well.

Why is it so difficult for Europeans to understand the Valley?

From my own experience having lived and worked there for a few years there are many reasons why authors like the above one have a hard time understanding it.

  • Opportunities come and go — and many more go. One has to accept that and be willing to move on. No harm to try things out many times. It is simply not possible to foresee where the route will lead when you start. This is difficult for many Europeans to accept as they tend to be more long-term in thinking and planning, and accepting a lot of uncertainty as normal is hard for them.
  • Total focus. When you work for a startup that needs to create value and reach milestones quickly there is no time to do anything else really. I had to work on weekends to reach a set beta milestone and we even introduced shift work in R&D. We also needed to use the -then limited – office space effectively. Now imagine what would happen if you did that in Europe? You might easily be sued for exploiting your knowledge workers. In Silicon Valley each employee in a startup has stock options, so is part-owner in the company, and reaching an exit (trade sale or IPO) will mean lots of money for everybody. So no-one would be bothered about working even harder when necessary.
  • Stock options. This is partly a funny one. I have seen many European startups where only the management has stock options and the other employees, regardless of how important they might be for the company, did not receive any, but also did not get bothered about it at all. Unthinkable in the Valley. A startup would not be able to hire any good people without stock options, in fact probably no-one even slightly qualified would join them. Now how’s that for a difference? :-)
  • Infrastructure. This is one of the historically strong points of the Valley. You have the ideal setup for a startup industry: venture capital/angel investors, startup experienced lawyers, top universities (Stanford, Berkeley plus other very practical industry-focused educational facilities), real estate owners providing lots of office space, local airports (San Jose, Oakland, San Francisco), networking events and associations, established high-tech firms (Oracle, Intel,  HP, Apple, Cisco, EMC, EA, eBay, Google, Applied Materials, LSI Logic, Symantec), government facilities (NASA Ames, Moffett Field)
  • Talent. Due to its worldwide reputation, Silicon Valley attracts some of the smartest and most qualified engineers and marketing experts. One has to also mention here the huge amount of Indians and Chinese who build the engineering human resources backbone. Smart immigration politics have enabled Silicon Valley to build links to China and India like no other area. Europe cannot compete here at all.
  • Attitude. These immigrants show a totally different risk-taking mentality, being used to working hard and to constantly trying new things. Something that I also experienced and highly appreciated was the great weather (practically always sunshine and blue sky all year around), which has a very positive mental effect on you: I think people are simply more positive thinking and willing to take more risk due to that mental state. I bet this could be proven as well if someone would investigate it.