Tag Archives: Culture

The Dream of Silicon Valley

This is my translation (well Google translation) of a very good article I read in newspapers La Tribune de Genève (pdf here) and 24 heures (pdf here). I am not sure I have the rights to do such a transaltion. I will do it the Google was and hopefully the news papers will not complain…

If you do not want to read it all, here are just two short quotes: “Some explain the excitement that prevails here because of a feeling of urgency, says Christian Simm. We must go quickly, people know they cannot work 80 hours a week for twenty years.” and
“You want to know the secret of Silicon Valley? asks Fadi Bishara, head of the incubator Blackbox. Failure is not an issue. It is completely accepted. It is even considered an apprenticeship.”

The Dream of Silicon Valley
Can the Lake Geneva area reproduce the ecosystem of the U.S. technology hub ?
by Renaud Bournoud

Often imitated, never equaled. The famous ecosystem of Silicon Valley, near San Francisco, is one of the most dynamic regions of the world. The success stories of Google, Apple and Facebook continue to fascinate, even on the Lake Geneva. But on paper, this Eldorado for innovation has much in common with our region. In a similar geographic area, a large bean sixty kilometers long, the two countries are ranked in the world’s most successful regions. If Silicon Valley is based on the prestigious universities of Stanford and Berkeley, the Lake Geneva can count on the EPFL, the Universities of Geneva and Lausanne or the IMD, the High School of Management. In both cases, the density of highly qualified people is high. Even daily commuters from Silicon Valley experience the discomfort that we know well . They also wait for hours in traffic jams. U.S. Highway 101, which irrigates the valley is as congested as the A1, between Lausanne and Geneva. Housing is also a concern that we share with them. The real estate prices are well above the U.S. average and have nothing to envy to those on Lake Geneva. So what are the ingredients that make Silicon Valley so special?

SV-24h

Demographic factors

A century ago, the orange groves reigned as kings over this corner of California. Now the land has nearly four million people. More broadly, the population of the San Francisco Bay is the size of that of Switzerland. The presence of reputable universities brings a lot of talent, as well as the attraction of the region. Silicon Valley Community Foundation considers that 60% of the engineers were born abroad, many of whom are from Asia. But the valley also attracts many Americans. “Here we are at the extreme west of the United States. We cannot go further, says Christian Simm, founder of Swissnex (note: the Swiss Agency for Promotion of Science and Innovation) in San Francisco. People who consider Boston too quiet come here to create. Because everything seems possible.” This density of great talent pool is ideal for company recruitment. A startup like Square, active in payment systems, could recruit 600 programmers in less than four years. This would not necessarily be feasible in the Lake Geneva region. These people have often come alone and can concentrate fully on their work. “Some explain the excitement that prevails here because of a feeling of urgency, says Christian Simm. We must go quickly, people know they cannot work 80 hours a week for twenty years.”

Cultural factors

A they arrived alone in Silicon Valley, people are quite willing to meet others, creating a culture of networking. Many networking events are regularly organized, like the Start Up Weekends. They also exist here, but in smaller proportions, simply because the population and the number of start-ups are lower. “It makes it easy to find a partner to build a startup,” says Ahmed Siddiqui, one of the organizers of Start Up Weekends Bay Area. “Here the world lives around the field of technology , explains Alexandre Gonthier, the boss of PayWithMyBank in Redwood City. I met my partner at the playground where I watched my children.” Not only can we can find a future partner in the sandbox, it is also easy to cross the pundits of Silicon Valley at random from a barbecue party. They are available and are ready to play mentors for younger people. “It is not as easy to meet bosses in Europe … Unless they learn that you are installed in Silicon Valley. There, the doors open,” notes Alexandre Gonthier. Contacts are natural, and the mentality towards failure also has a role. “You want to know the secret of Silicon Valley? asks Fadi Bishara, head of the incubator Blackbox. Failure is not an issue. It is completely accepted. It is even considered an apprenticeship.” And if the project does not fail, it will soon be on the market. “The minimum viable product” is the leitmotif of the Silicon Valley. “We need to create something simple that you can use right away,” says Solomon Dykes, the founder of the start-up Dotdoud in San Francisco. “I would add that the idea is not very important, Fadi Bishara continues. Googje invented nothing, there were already search engines. What matters is the “packaging”, how the project is sold.” It’s the reason why storytelling is used a lot to sell. These stories also serve to develop an entrepreneurial spirit. Many myths have grown from Silicon Valley. There is the famous story about the birth of startups in garages. Like, for exampl , Google, which had rented a garage, whereas it had already raised $ 1 million.

Financial factors

Good idea or not, nothing is possible without money. The region of Silicon Valley attracts 46% of venture capital in the United States, according to the Bay Area Council Economic Institute. This happens especially much earlier in the development of projects than here.” If, after a year , the start -up has not found funding , we believe that we need to move on,” adds Jeff Burton , director of Skydesk , an incubator located on the Berkeley campus . “For us, the institutional money comes much later, said Joao Antonio Brinca, representative of BCV board at the Foundation for Technological Innovation in Lausanne. Financing through venture capital funds typically occurs between the fifth and seventh year of the project life. “The sums involved are not the same. A young company of Lake Geneva can hopee to raise between 300,000 and 600,000 francs for its first round of funding. In Silicon Valley it is at least twice. So there is a gap between the first efforts of startups to exit the academic world and the interests of investors . This longer period may explain the difficulty of transforming research into marketable products. Another advantage of Silicon Valley is its close proximity maintained between universities and private firms. In this regard, the Lake Geneva is still lagging behind. But it would be wrong to say that nothing is done about it. EPFL has worked in recent years to attract firms in the area of innovation, so that they mingle with the start-ups. But again, the structures of the same type that abound in Silicon Valley are favored by the scale. The density of start-ups produces a unique emulation world. Also keep in mind the economy of scale to explain this difference. A U.S. start -up happens in a domestic market of 320 million potential customers. In Switzerland, an emerging company has to deal with a much smaller market, divided into three languages and twenty- six cantons.

This article was produced as part of a tour organized by BCV for ten young Vaudois.

A beautiful thriller in the world of start-ups

Today, Peter Harboe-Schmidt presents L’HOMME QUI NE CROYAIT PAS AU HASARD the French translation of his thriller The Ultimate Cure. I had at the time said how much I liked this novel. Do not hesitate to join him on the EPFL campus this afternoon.

Here is a short piece again:

“Take your start-up as an example. Why did you do it? If you analyzed the pros and cons for doing a start-up, you’d probably never do it. But your gut feeling pushed you on, knowing that you would get something very valuable out of it. Am I right?”
Martin speculated on why he was so drawn to a world that at times could appear to be no more than sheer madness. Like a world parallel to real life with many of the same attributes, just much more intense and fast-moving. People trying to realize a dream in a world of unpredictability and unknowns, working crazy hours, sacrificing their personal lives, rushing along with all those other technology based start-ups. Medical devices, Internet search engines, telecommunications, nanotechnologies and all the rest competing for the same thing: Money. To make the realization clock tick a little faster.
“Funny you should say that,” Martin finally said. “I’ve always thought of this start-up as a no-brainer.I never tried to justify it in any way.”

The Tinkerings of Robert Noyce

I am reading a new book on Steve Jobs and Silicon Valley entitled The Apple Revolution. I will come back on what I think when I am finished reading it. I discovered in the first pages of this book that famous author Tom Wolfe had written in 1983 another article about Silicon Valley centered around Bob Noyce, The Tinkerings of Robert Noyce.

You probably do not remember my previous posts mentioning Noyce, and if not you may want to read them:
What is the mentor role? in August 2010.
The Man Behind the Microchip in February 2008.
It is not very surprising that Noyce, the founder of Intel, is mentioned in a book about Apple computer. Noyce was a mentor to Jobs as you may see below or by reading my post above. Don Valentine add further that Noyce and Jobs may have been the two most important personalities of Silicon Valley: “There were only two true visionaries in the history of Silicon Valley. Steve Jobs and Bob Noyce. Their vision was to build great companies…”

Wolfe’s article is great and if you do not have time to read The Man behind the Microchip, you might want to read this shorter version. let me just extract a few things:

About the culture of Silicon Valley, work, openness and …
“The new breed of the Silicon Valley lived for work. They were disciplined to the point of back spasms. They worked long hours and kept working on weekends. They became absorbed in their companies the way men once had in the palmy days of the automobile industry. In the Silicon Valley a young engineer would go to work at eight in the morning, work right through lunch, leave the plant at six-thirty or seven, drive home, play with the baby for half an hour, have dinner with his wife, get in bed with her, give her a quick toss, then get up and leave her there in the dark and work at his desk for two or three hours on “a couple things I had to bring home with me.
Or else he would leave the plant and decide, well, maybe he would drop in at the Wagon Wheel for a drink before he went home. Every year there was some place, the Wagon Wheel, Chez Yvonne, Rickey’s, the Roundhouse, where members of this esoteric fraternity, the young men and women of the semiconductor industry, would head after work to have a drink and gossip and brag and trade war stories about phase jitters, phantom circuits, bubble memories, pulse trains, bounceless contacts, burst modes, leapfrog tests, p-n junctions, sleeping-sickness modes, slow-death episodes, RAMs, NAKs, MOSes, PCMs, PROMs, PROM blowers, PROM burners, PROM blasters, and teramagnitudes, meaning multiples of a million millions. So then he wouldn’t get home until nine, and the baby was asleep, and dinner was cold, and the wife was frosted off, and he would stand there and cup his hands as if making an imaginary snowball and try to explain to her… while his mind trailed off to other matters, LSIs, VLSIs, alpha flux, de-rezzing, forward biases, parasitic signals, and that terasexy little cookie from Signetics he had met at the Wagon Wheel, who understood such things.
It was not a great way of life for marriages.”

About youth and innovation:
“The rest of the hotshots were younger. It was a business dominated by people in their twenties and thirties. In the Silicon Valley there was a phenomenon known as burnout. After five or ten years of obsessive racing for the semiconductor high stakes, five or ten years of lab work, work lunches, workaholic drinks at the Wagon Wheel, and work-battering of the wife and children, an engineer would reach his middle thirties and wake up one day; and he was finished. The game was over. It was called burnout, suggesting mental and physical exhaustion brought about by overwork. But Noyce was convinced it was something else entirely. It was…age, or age and status. In the semiconductor business, research engineering was like pitching in baseball; it was 60 percent of the game. Semiconductor research was one of those highly mathematical sciences, such as microbiology, in which, for reasons one could only guess at, the great flashes, the critical moments of inspiration, came mainly to those who were young, often to men in their twenties. The thirty-five year-old burnouts weren’t suffering from exhaustion, as Noyce saw it. They were being overwhelmed, outperformed, by the younger talent coming up behind them. It wasn’t the central nervous system that was collapsing, it was the ego.”

About status, hierarchy and success:
“And if he was extremely bright, if he seemed to have the quality known as genius, he was infinitely more likely to go into engineering in Iowa, or Illinois or Wisconsin, then anywhere in the East. Back east engineering was an unfashionable field. The east looked to Europe in matters of intellectual fashion, and in Europe the ancient aristocratic bias against manual labor lived on. Engineering was looked upon as nothing more than manual labor raised to the level of a science. There was “pure” science and there was engineering, which was merely practical. Back east engineers ranked, socially, below lawyers; doctors; army colonels; Navy captains; English, history, biology, chemistry, and physics professors; and business executives. This piece of European snobbery that said a scientist was lowering himself by going into commerce. Dissenting Protestants looked upon themselves as secular saints, men and women of God who did God’s work not as penurious monks and nuns but as successful workers in the everyday world.”

Although he was an atheist, Wolfe sees in the values of “Dissenting Protestantism” roots of the Silicon Valley culture. “Just why was it that small-town boys from the Middle West dominated the engineering frontiers? Noyce concluded it was because in a small town you became a technician, a tinker, an engineer, and an and inventor, by necessity. “In a small town,” Noyce liked to say, “when something breaks down, you don’t wait around for a new part, because it’s not coming. You make it yourself.”

Interestingly enough the Apple Revolution also mentions all these points, but in the context of the hippie counter-culture… wait for next post!

There will never be another Silicon Valley

Well who am I to predict the future? In fact I do not know but I really doubt it. Famous bloggers have mentioned the topic again recently. In Techcrunch it was Can Russia Build A Silicon Valley? by Vivek Wadhwa. And in the Equity Kicker, it was Building an ecosystem to rival Silicon Valley by Nic Brisbourne. I reacted to both in the following way:

What a topic! Clearly something which has been around for… at least 35 years (I mean how to replicate SV). The fact that we still discuss it shows how complex it is. It has been my main concern in the last years and for the beauty of the debate (that’s what blogs are about, right?) let me play the devil’s advocate fully. At an extreme, I do not think there will ever be another Silicon Valley. For example, Kenney claims in his book on SV it requires 5 basic ingredients: universities of high caliber (Stanford and Berkeley in SV), a strong investor base, service providers, high-tech professionals (who accept to leave their big companies for start-ups so from Intel, Cisco, Apple, MSFT, even Google now to the next wave) and last but not least an entrepreneurial culture. All this is not easy to gather. But even worse, SV was probably an accident, a monster which was never successfully replicated. Saxenian showed in Regional Advantage how even the Boston area failed and the fact that Paul Graham moved ycombinator fully out of Boston to SV is just another sign. In Europe, Sophia Antipolis was a first experience … in 1972 so? So you need a rare combination of ingredients in the recipe and hope the oven is at the right temperature for a long, long time. Now I am playing devil’s advocate so things are not so bad. As a positive reaction, let me add my own analysis: I am not sure governments are good at innovation, they are good at stimulating research. The US federal govt has put billions through DARPA, NIH, DOE, etc, and this obviously helped Stanford, Berkeley to be the best universities worldwide (see the rankings) and the Internet to be created. Long term investment in infrastructure is what gvts are good at (education, research, transport…) Then, yes, bridges with SV are critical. It is exactly how Israel, Taiwan, then India and China have been successful with their diasporas. Countries should invite back the experienced migrants. When he has time, Brin should help Russia or Levchin Ukraine, or even Grove Hungary etc… I am less sure tax credits, admin, legal tools have been so useful in the 50’s, 60’s and 70’s when SV was its in early days. As a conclusion, it is and will remain for a while a great topic.

Of course, my reaction was not as important as the source of the posts: Russia wants to be more innovative and commissioned a report to assess experiments of innovation ecosystems. The result is the following report: Yaroslavl Roadmap 10-15-20 (pdf format.)

There isn’t anything really new in this report, at least for innovation experts. But it is a very good synthesis of what the USA, Israel, Finland, India, and Taiwan have tried, be successful in, but also in what they failed.  The historical summaries are great and full of good lessons. I had the feeling the authors put too much emphasis on infrastructure vs. culture. It is my own bias again! They mention culture a lot, but they may be aware also that it’s the most difficult thing to create… If you like the topic, you should certainly download and read the pdf, and build your own opinion.

Why Silicon Valley kicks Europe’s butt

Listen to Loic Lemeur’s views on why “Why Silicon Valley kicks Europe’s butt”. Nothing special if you read regularly my blog but said by someone who has visibility, credibility and experience on both sides of the ocean.

Check his arguments:
– the main reason is how much time we take for lunch in Silicon Valley (i.e. feeling of urgency)
– all in one place (i.e. critical mass)
– like a campus (i.e. easy connections, young, sunny)
– business happens 24/7 even when you don’t expect it (i.e. obsession)
– seed funding and VCs (i.e. money)
– flexible (i.e. changes happen fast)
– “how can I help” attitude (i.e. open and pragmatic)
– easy to get an appointemnet (i.e. open again)
– people trust by default (i.e. open mindedness)
– diversity (i.e. yes diversity works in the US)
– press and bloggers (i.e. tech friendly culture)
– Europeans begin locally (i.e. not globally)
– too much copy / paste in Europe (i.e. no real innovations?)
– Europeans hire local (i.e. challenging to go global)
– Think in English (i.e. another challenge)
– you guys can fix it (i.e. self-confidence and confidence in others – empowerment, remember class A people hire class A+ people)
– aim at being a world leader (i.e. ambition)
– focus on execution, ideas do not matter (i.e. action oriented)
– gather a community and iterate (i.e. learn by doing, by trials and errors)
– believe in yourself (i.e. …)

Well even if this may be obvious for some of you, I still had to fight against people who disagree about this (check my previous post!)

yYou can compare all this to my summary slide when I talk about Silicon Valley. No frustration in all this as we all have to say these things endlessly, but sometimes, still too often!

The Ultimate Cure, a great novel

Not only is The Ultimate Cure a good novel which describes the start-up life, the venture capitalists and what it costs to be an entrepreneur (and it reminds me of Po Bronson’s The First $20 Million Is Always The Hardest) but it is also a great novel, about human nature and what drives us in life. Here it reminds me of Swiss rising star, Martin Suter and his psychological thrillers. Most importantly, it is a great pleasure to read.

Author Peter Harboe-Schmidt has done a really nice “oeuvre”. Here is just a small piece:

“Take your start-up as an example. Why did you do it? If you analyzed the pros and cons for doing a start-up, you’d probably never do it. But your gut feeling pushed you on, knowing that you would get something very valuable out of it. Am I right?”
Martin speculated on why he was so drawn to a world that at times could appear to be no more than sheer madness. Like a world parallel to real life with many of the same attributes, just much more intense and fast-moving. People trying to realize a dream in a world of unpredictability and unknowns, working crazy hours, sacrificing their personal lives, rushing along with all those other technology based start-ups. Medical devices, Internet search engines, telecommunications, nanotechnologies and all the rest competing for the same thing: Money. To make the realization clock tick a little faster.
“Funny you should say that,” Martin finally said. “I’ve always thought of this start-up as a no-brainer.I never tried to justify it in any way.”

In the company of Giants

I had read In the Company of Giants in 1997 just before becoming a venture capitalist. Then when I began to read again about entrepreneurs, I just could not find it anymore and had to buy it through the reseller network of Amazon. It is as interesting as my previous posts (Once You’re Lucky, Betting it All, Founders at Work).

I will let you link the names and quotes with the pictures if you have time!

Steve Jobs: “In the early days, we were just trying to hire people that knew more than we did about anything and that wasn’t hard because we didn’t know a lot. Then your perspectives are changing monthly as you learn more. People have to be able to change.”

T. J. Rodgers (Cypress Semiconductor): “the standard entrepreneurial answer is frustration. You see a company running poorly, you see that it could be a whole better. Intel and AMD were arrogant. If you think about it, any billion dollar company, that has so much money to spend on R&D should be unassailable. But the large companies routinely cannot crunch little companies so something’s got to be wrong.”

Gordon Eubanks (Symantec): “What makes a company successful is people, process, product, and passion. You must have great people and product and passion balanced by process.”

Steve Case (AOL): “Do something you really love, you are passionate about. Take a long-term view, be really patient. There are going to be bumps on the road.”

Scott Cook (Intuit): “People [customers] won’t tell you what they want. Often they can’t verbalize it because they don’t understand things they’ve not seen. You must understand fundamental motivations and attitudes.”

Sandy Kurtzig (ASK): “I did not see it as incredible risk. Many entrepreneurs would tell you why it was obvious to do what they did. When you have nothing, you have nothing to lose. That’s why so few entrepreneurs can do it a second time. Even Jim Clark did not really start Netscape or Jobs did not really start Pixar. They funded it. You need other people to be hungry… Believe in yourself, surround yourself with good people, be willing to make mistakes, don’t get wrapped up in your success. You are still the same person you were when you started.”

John Warnock and Charles Geschke (Adobe): “Actually there was the very first business plan, then there was the second business plan, and then the third business plan; we never actually wrote the third business plan.”

Michael Dell: “It did not seem risky to leave school because I was already earning obscene amounts. The worst thing that could happen is I would return to school. The greater risk was to stay at school.”

Charles Wang (Computer Associates): “Managing is not just telling people what to do, but it is leading by doing. Know your strengths and weaknesses and complement yourself. Be realistic and objective. Surround yourself with great people.”

Bill Gates: “It’s mostly about hiring great people. We are [in 1997] 18,000 people and still the key constraint is bringing in great people. We naively thought there were guys who could tell us we weren’t doing things the best way.”

Andy Grove: “I can’t look at a startup as an end result. A startup to me is a means to achieve an end.”

Trip Hawkins (Electronic Arts): “You don’t have an objective, rational process. You need a certain amount of confidence. There are many things that you don’t know will go wrong. If you knew in advance all the things that could go wrong, as a rational person, you wouldn’t go into business in the first place.”

Ed McCracken (Silicon Graphics): “My venture capital friends tell me that many of the ideas they’re seeing for new businesses are coming from people under 26 years old.”

Ken Olsen: “Business school’s goal today is to teach people to become entrepreneurs. I think it’s a serious mistake. You learn first how to be a team member, then a leader.”

Bill Hewlett: “It was 1939 and it was no time to start a company. It was probably the supreme optimism of youth.” and “It’s not all due to luck, but certainly a large percentage of success is. We were in the right place at the right time. We were lucky and we had wonderful teachers and mentors. HP didn’t start in a vacuum.”

The thoughts of a Swiss entrepreneur based in Silicon Valley

Following a long phone conversation with a Swiss entrepreneur based in Silicon Valley, I received from him an email where he put his thoughts. They are indeed quite interesting and he authorized me to publish them:

“It’s a bit depressing to see that things change slowly (I had that intuition already)…

On a philosophical standpoint, I was thinking while driving my car that one of the issues is self-confidence.In the USA, everyone is raised with the idea that “anything is possible”, the “American dream”, to the point that it is sometimes stupid and annoying… On the contrary, in Switzerland, anyone wants to do things well and the culture is more about “this is not possible” or “I do not know how to do this”. But to be an entrepreneur, you must not be afraid of trying, of being far from perfect, of doing things in fields you do not master and sometimes even “quick and dirty”. It is the opposite culture of the Swiss craftsman who is a perfectionnist, the “travail bien fait”)… In summary, it is important to learn by doing things such as:

– Who to raise money, where to begin?
– How to negotiate a shareholder and investor agreement?
– How to deal with partners?
– Learn how to negotiate
– How to work with Head Hunters, Lawyers, Customers…?
– How to build and manage a team? – How to hire a sales team (a tough thing for an engineer). By the way, what are marketing, sales, operations?!!

– What about productization, schedule, specs, qualification?
– Where to find distributors?
– etc…

All this can not be taught in schools, I am not sure it is covered in an MBA. I am not conviced it can be taught anywhere. According to my experience, an entrepreneur does not stop doing new things, quite badly the first time and hopefully better and better with time. One should not have the negative attitude of never trying difficult and risky ventures, which does not mean one should launch or fund unrealist projects… There is a fuzzy line between arrogance (one should know its own limits) and dynamism of a good entrepreneur.

It is certainly a bad thing that engineering schools do not provide enough about marketing, accounting, legal elemts in the curriculum. But this is also true in teh USA, by the way!”

I was yesterday in Grenoble for a round table on the Nouveaux Conquérants:

The topics that were discussed were very similar to the comments above: self confidence, uncertainty, risk taking, passion, and success & failure.