Studytouring Silicon Valley
Retrospectively, the first time I came to the Bay area, my mind was blown away by the drive of the people here. Everybody tries to move forward, everybody wants to improve, be successful. However, being successful does not imply making tons of money. It’s about fulfilling needs and desires to achieve a certain level in life. Money does not seem to make a difference in the entrepreneurial world of the Silicon Valley (SV) — it’s there anyway. You will find someone who is interested to bring your idea forward somehow. This can be anybody from an Angel Investor, Venture Capitalists, Banks, Corps or team members who help to bootstrap the operations in the months to ‘demo’ day — going live. Therefore, the question of what creates the entrepreneurial spirit here is multi-faceted. Freeman would say it’s all the stakeholders creating the values and spirit of the Bay Area. Like a big engine, startups are fueled by the money of the ones that already made their exit. So the single one thing that inspired me most was the fact that this engine did not stop powering the Bay Area over decades. Even more, it continues to accelerate as we see more and more of the so called ‘unicorns’ to give birth to unique services and things. Trying to make the world a better place in an entrepreneurial manner is the core idea of what makes up the Silicon Valley.
The Silicon Valley approach to Entrepreneurship
Never stop, keep doing, keep improving, keep accelerating, keep growing. Silicon Valley feels like a Strategic Management lecture with Prof. Hinterhuber back in the days at the University of Innsbruck. From Vision to Mission to Strategy to Tactics broken down on everyday examples like Champions League to National League to Next Game to Scoring a Goal or Defending. In my opinion the credo of entrepreneurs in SV is to think big, create chunks of your big idea and finish piece by piece, level by level to grow and achieve. Never stop achieving. Creating a constant wave of companies rising, companies falling, but keeping the drive here in the Bay Area, putting it into new business or new ideas.
A complex business-ecosystem like the Bay Area needs people who give you a hand sometimes. Like mentioned before, this can be people with knowledge or money. These helpers can also be incubators and accelerators. Business childcare so to say. These places and people are well-known among the startup scene. There are mentors who transfer their knowledge to the next generations of entrepreneurs. People like Hap Klopp who established the North Face as one of the best-known outdoor clothing companies worldwide, or Peter Thiel, a member of the Paypal Mafia. People like them do not solely invest in ideas but they take action and support companies they’ve been invested in by leveraging their network, advising and mentoring, serving as role models and making others aware of the potential of an idea or the business as such.
However, becoming an entrepreneur in the Silicon Valley includes having manifold skills. Among others, a Silicon Valley entrepreneur should be some kind of a business model guru. So innovation is not just pointed on technology, services or products, but on every aspect of the business. Therefore, business models start to become major differentiators, varying by type of business, payment possibilities, markets, data or the participants themselves. As another part of a business model, scalability is a factor to consider. Entrepreneurs in the Valley and anywhere else in the world, have to find ways to scale their business in order to ensure growth without major investments and the hustle of striving for constant inventions. However, not aiming for scalability can be a differentiator as well, at least in the Bay Area. For example, the people working at Obscura Digital do not aim for repetition, they aim to be the greatest that given moment. They do not benchmark, they decide where to put the bar. They are driven by creating what no one did before, combining whatever is needed to create outstanding results. Nonetheless, Obscura Digital is a success in itself, showcasing that successful business models can have different shapes with different ways to approach the final goal.
Comparing the Silicon Valley business to business in Europe, I feel that people on each side of the ocean tend to be highly motivated for their cause. However, taking the example of the students at UC Berkeley, it seems that they come up with their ideas by looking at current gaps in society, business and technology. We listened to two teams which discovered a lack of a tool/service when looking at social evolution. Therefore, I tend to see a difference in the way people perceive their opportunities. In the US, companies are not mainly started to fulfil a personal desire but to fulfil a cause or grasp an opportunity. Europe tends to create startups according to the perception of the founders and keep lingering over the dream that the startups will be successful, sometimes — regardless of the cause. This example may be very special and needs more data to show significance. However, it is a difference that became obvious through this reflection.
A very interesting aspect I discovered during the study tour is the approach of how to assemble successful teams. Entrepreneurs in SV tend to work with small teams, quick acting, diverse groups, aiming for high goals, constantly raising the bar, innovation-driven, leveraging sophisticated data-driven systems and a creating nice campus-like environments — which sounds like university to me. Everything is laid out in order to allow the bright minds coming from university to feel like they are still on their Alma mater’s campus. An approach which also Google leverages to preserve it’s fresh and innovative thinking by providing an environment that is aimed and designed for students and researchers. Google understood well and created a town-like campus offering everything an employee needs from hair-cuts, over food or legal advice. Google takes care of their employees like universities do care for their tuition-paying students. Pampering them to milk creativity and productivity 24 hours, 7 days a week.
The last and maybe most important point I want to make in this reflection, is the focus on design which is omnipresent throughout Silicon Valley enterprises. Design somehow builds the underlying structure of these organizations as it “describes” how the company looks and acts like. Design is part of the organizational structure, it defines the characters of the people working there. Design influences processes and solution-finding. It is omnipresent. In the past, companies have been built on general rules and norms. However, when some of these norms established for brick and mortar companies did not apply anymore, it was time that design culture comes into play and disrupts business models, industries and ancient thinking. In my opinion, design has by far the most influence on Silicon Valley entrepreneurship. Design thinking, customer journeys, personas — it seems that all these buzzwords have been invented in the Bay Area. International companies come to Palo Alto and other places in the Valley to learn and incorporated this way of thinking. Because, Silicon Valley entrepreneurs’ live the design culture.
Final thoughts on failing
Concluding, I made several points when describing entrepreneurial spirit in the Silicon Valley. Foremost, it is the excellent ecosystem of entrepreneurs in different stages of business life. There are the ones who already made their money, the ones who are right in the middle, the ones that are just taking off, the ones who already failed in past and the ones who fail right in this moment. It’s all about their interplay, network, mentorship and belief in the power, magnitude and creativity of the Valley. Secondly, it is the belief in having success at some point and failing is definitely a part of this ongoing cycle. Thirdly, the hardcore belief in finding a gap of needs and exploiting this opportunity by any means of research or creativity is manifested by Silicon Valleys design-culture.