Though the event was dedicated to European entrepreneurs, many discussions revolved around entrepreneurship in general and the environment entrepreneurs need to thrive and bring innovation to the market.
Currently Silicon Valley generates more new $B+ successful ventures than other locations, and this gap is growing.
Silicon Valley was successful in creating this environment, but Silicon Valley is not a place, it is a recipe. What are some of the elements of the recipe, which make creation of new companies and new product possible?
- Entrepreneurial culture – reliance on diversity (currently, over 60 languages are spoken in Silicon Valley)
- Failure is not considered a stigma, but rather experience
- Access to capital (investors also provide mentorship)
- Access to technology – roles of Universities, which adopt policies to help the “recipe” (for example, an idea generated by students can be easily commercialized without any legal issues)
- Large companies are breeding ground for management talent, where it is considered acceptable to work for a couple of years in a large organization, then move to a smaller one
- Favorable government policies, as “without regulations there is no free market”
- Liquidity (IPOs and M&A)
- Infrastructure (law firms, accounting firms, etc.)
Over-regulation kills innovation. Under-regulation results in chaos.
44% of European startups are acquired by US companies. In Europe, startups are not spon by the university system. Venture capital play lesser role in European funding system; government step up to help the process.
European regulation is currently complex “we have everything 28 times.” European Commision is addressing this problem through “Digital Single Market Strategy.”
Why do we need to pay attention? There is more and more transactions with Europe. In general, all successful companies are global companies.
Interesting point on the startup growth: at one point, a company that hired generalists in their fields need to switch to hiring more narrow specialists, and these specialists need to be managed differently. This is a shift in the company’s structure, at which point some of generalists (and even some of founders) might not feel comfortable and might decide to leave the organization. This shift needs to be carefully managed.