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Wednesday, July 02, 2008

An Illuminating Month

The south side of the Googleplex building in M...As regular readers will know I very seldom muse on the 'state of the nation' or other lofty and worthy subjects. I leave this to the philosophers and commentators in our ecosystem. My posts generally relate specifically to TAG companies. Excuse this piece but it seemed necessary after spending almost a month in the 'theatre of dreams' which is the Bay Area of San Francisco. Normal service will be resumed soon.

A month in San Francisco and 37 meetings has given me some real insights into what has made The Bay Area of San Francisco - or more precisely, Silicon Valley the technology crucible for the world. Its instructive to look at which of the elements are replicable elsewhere and which are uniquely SV.

Key elements:
1. Culture: emanating from the gold rush 1848 when the surge of prospectors arrived from all corners of the world, the ethos is liberal, open, diverse, multi-cultural and the sense of opportunity is pervasive.
2. Lifestyle: the weather helps as does the natural beauty of the bay, the ocean and the mountains.
3. Size: The city is surprisingly compact, the population relatively small, the valley is accessible by 2 fast moving freeways and once there of course parking is plentiful, immediately outside the relevant office. All this makes for intensive interaction, there is a high concentration of tech start ups with easy accessibility to one another. The tech industry is extremely important to the city, the region and even the state. Its a significant driver of economic growth and activity.
4. University: Stanford is a major factor – its school of entrepreneurship is focused towards making engineers into entrepreneurs. Some of its programmes [eg Prof Tom Byers' Stanford Tech Ventures Programme and the Entrepreneurial Thought Leaders Course] are turning out some of the best new entrepreneurs around. Just another example of the focus on Entrepreneurship is The Mayfield Fellows Program (MFP) which guarantees an automatic summer job at a start up. The Mayfield Fellows Program (MFP) is a nine-month work/study program at Stanford University designed to develop a theoretical and practical understanding of the techniques for growing technology companies.
5. A very active angel community and an informal‘investor club’ capable of rustling up a $1m seed round with a few phone calls in an hour. More angels are joining this community every time there is a significant exit or a group of Google execs cash in their options.
6. Of course, lets not forget that the US is still the largest market in the world - for most products and services. This is a fundamental factor.

All above factors attracting some of the best and brightest in the world.
Including a number of Europeans. Brits, French, Scandinavians, Spaniards etc.. Many in the Euro ecosystem wonder how one competes with all this. In my view its a not a matter of competing its a matter of creating.
Its also a case of Europe joining the global ecosystem and not seeing itself as separate. In the old economy it was a zero sum game – for every winner there were losers. In the New Economy we are thinking about creating or reinventing markets, disrupting old and inefficient methods and processes.

We in Europe can certainly play our part. Here are some of our fundamentals:
1. Creativity: Home to and heart of some of the great entertainment (eg music) and advertising industries. Great literary traditions. For the new web companies – which are global in reach and capital efficient - content, design and style is becoming ever more important (aren't the Apple style gurus all Europeans?)
2. Core engineering education: High standards pertain all over Europe - lacking in commercial and entrepreneurial sophistication - but with strong engineering traditions.
3. Low cost, highly efficient development capability across eastern Europe and easier access to India.
4. London – the most culturally diverse city in the world - with multi-lingual resources. Europe generally tends to have a more global outlook from day one - knowing that the home markets are small(er). Look at Israel - not much is developed for the home market - much has been world beating.
5. More advanced mobile technology and infrastructure than the US.

Things for us to work on:
Collective effort needed. - Create centres of excellence – shared working spaces - Develop further the great networking and learning hubs: Seedcamp, Opencoffee, conferences, first Tuesday. - Stimulate, encourage, help the Universities create world class entrepreneurial education programs and enable them to share the economic advantage.
Stimulate and encourage more cross pollination with US companies - both East and West Coast.
We can learn a lot and gain easier access to their big markets by partnering or locating commercial operations there.



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3 comments:

  1. Dmitri Eroshenko12:04 am

    Right on Robin. Where there's a will there's a way. America is the land of opportunity. The US entrepreneurial minds are conditioned by this awesome cliché to be in the creative, rather than competing mode. It's this mindset that needs to be cultivated in Europe. And you're right, the global nature of modern economy is what will make it all possible.

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  2. Shakir Razak4:18 am

    Hi,


    More people here know of Trevor Bayliss and James Dyson, then know of Martin Sorrell, John-Marie Messier or Mike Lynch.........???...........




    Kind regards,



    Shakir Razak

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  3. Shakir Razak2:49 am

    Hi,

    To expand on what I said above.


    I think it's a question of culture, and how the pillars of our society foster entrepreneurism and technical creativity.

    There's various examples and contrasts.

    Look how the eastern europeans have taken to web-building and business like a duck-to-water, so quickly.

    Now contrast that with all the nonsense in our country when it comes to business, in recent times, Hedge-Funds and Northern Rock; jealousy and ignorance.

    I could go on forever, but basically our politicians and media get far more excited by the glamour of american companies than what's already in their back-yard.
    Our technical successes often occur in spite of rather than because of a mass supportive culture, the UK games industry being a prime example.

    The media belief/presented-perception of business being like Dragon's Den and Alan "has-been" Sugar.

    When success is promoted/hyped it's often what the technically/business-literate wouldn't consider worthy of the attention.


    What was great about the pre-2000 period was the belief that anything was possible, and everyone believed it. That thinking resonates still with many, but when the climate has changed since those halcyon days, the younger non-tech-obsessed people are less likely to be imbued with that culture/mindset.


    It's not just about dot.commers, but all people. You don't have to be a coder to have the idea to be able to build tech. businesses and have relevant ideas, but as long as the infrastructure is in place -which I believe it actually is, not only as in your list, but together with the financial capital of the world.

    However, that potentially brings focus onto another problem, the lack of ambition and foresight, vision and desire to own markets, to be the predator rather than prey. When old established companies from P&O to Pilkington, Allied Domecq to BOC are being taken over for short-term returns, I don't believe a long-term base can be established without an industry that is native and has solid foundations, in the way that Vodaone, UBM or WPP have, allowing people, intellectual and corporate capital to be available to invest and re-invest, re-cycled (and spun-off) in the way Nokia or Ericsson, or the paypal-mafia, google and microsoft alumni have in their own nation.



    In conclusion, we are capable of matching the best in the world, broadband, facebook/linked-in and elance, etc make things a lot more easier, we already think without blinkers with a world-view, we have a heritage that many aspirants continue the desire to follow, but so much more would be possible if other stake-hiolders (the state, media, education) were all on the same page, maximising opportunity, efficiency [inc. of relationships/creativity] and more willing to accept loss.



    Yours kindly,



    Shakir Razak

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