Clash of Startup Civilizations?
In 1996, Samuel Huntington published his book “The Clash of Civilizations and the Remaking of World Order”, a book that changed paradigms in International Relations and politics worldwide. His premises were simple: after the fall of the Soviet Union the world order had changed from a bipolar one, controlled by the dichotomy of the NATO countries versus the Communist bloc, to a multipolar one where international politics and security could be understood based on conflicts between eight civilizations: Western, Islamic, Orthodox, Chinese, Hindu, Latin American, Japanese and African. At a time were many thought an era of unending peace and united humanity was beginning his thoughts were, for lack of a better word, disruptive.
His merit stands as the first to identify the sources of conflict in the beginning of the new century (think any Islamic group’s terrorist message or the Ukrainian and Russian conflict). He also was the first to create a model that is not so detailed it does more to confuse than to elucidate but also not overly simplistic in detailing the forces that influence International Politics and relationships between different countries.
What the hell does that have to do with startups?
Let’s be honest, we live in world where startups are mythical creatures created by geniuses that code all day and night to create a weird product most of us don’t get right away. We know Silicon Valley is the “best” place for startups because everyone there is trying to disrupt one thing or another and most if not all successful startups (called unicorns, supposedly because their valuations don’t exist in real world) came from over there. Airbnb, Uber, Google, Waze (moved to SF in order to be invested), WhatsApp, etc.
But what if we are doing exactly what people in the first days after the end of the Cold War were doing? What if we are oversimplifying the intricacies of the world? We know that economic trends and development of certain industries are affected by culture. Latin American countries only recently have tried to develop industry not only due to the colonial times’ policies, but also because the status quo left afterwards benefitted more the agrarian elites. The Japanese economic recovery after the Second World War benefitted from the culture of bushido and hard work in place since samurai times.
Then why should startups, which are a part of the general ecosystem of a country, not be affected by the same principles and understandings we have defined as culture? And the truth is any startup that has successfully gone global understands this. The way people use Facebook, Snapchat and WhatsApp is different in the US, Brazil and Japan. But the question is, is this enough to solicit a change in perspective in the startup world order?
Silicon Valley Dreams
Every single startup community in the world wants to be Silicon Valley. Mostly due to the reasons mentioned above. And they are really trying hard to go down that path. In Brazil there are about four startup communities that define themselves as “Something Valley”. The truth is, Silicon Valley is the most respected and successful startup community in the world, if your measure of success is based on valuations and the number of startups that are created every year, and I’m not the one to go and state that it isn’t. But it is based on Western Civilization models and success metrics.
In the same book he presented the Eight Civilizations model for analyzing International Politics, Huntington also argues that the world is becoming less Westernized and there are several cultural movements that are actually directly questioning and rejecting the Western way of life. I know it’s hard not to think of the Islamic movement, but go past that and try to think of the way China does business or even the mid-90s problems in Belgrade. The acceptance of the Western way of doing things in the world is not increasing, and Huntington adds that it may be decreasing.
With a scenario like that, in place for 20 years already mind you, why should these cultural movements of revolt against Western Culture once again not play their hand into the startup world? The truth is we do not know of other startup communities that are successful outside of Western Civilization as well as we know what happens in Silicon Valley, and the ones we do know or live in, we are measuring by Western standards. As a matter of fact, in the 2015 Startup Genome Project from Compass out of the 10 best startup communities only Singapore (ranked 10th) is outside the Western world (Tel Aviv is number 5, but I put it in the Western Civilization box). Out of the top 20, four are not in the Western world: Singapore (Islamic), Sao Paulo (Latin American), Moscow (Orthodox) and Bangalore (Hindu).
A rock on the Boulder Theorem’s path
Brad Feld, amongst several other amazing things, wrote a very enlightening book aptly called Startup Communities, in which he states his Boulder Theorem: in order for a good startup community to exist it needs know-how, capital, rebellion and entrepreneurs. Nicolas Colin explained and exemplified very well on his Medium post “What makes an entrepreneurial ecosystem”. This theorem has been used since the publishing of the book to analyze and guide efforts towards the creation of entrepreneurial ecosystems. But is that just one biased vision of how entrepreneurs work or is it a concept we can apply everywhere without fear of creating a structure that will fall on our heads?
I believe that the Boulder Theorem does explain how ecosystems are created and maintained and how we can improve and transform society into a more entrepreneurial version, and I certainly don’t think we should throw it out in the garbage. But I do think it is necessary to look beyond what the Venn diagrams tell us and try to see the configuration and relationship between the different aspects as a cultural construction as well. That kind of vision permits us to stop and look at how to better take advantage of our reality and build entrepreneurial ecosystems that favor certain cultural aspects. Is Germany the land of efficiency? Then why should startups there not focus on efficiency related products and services? Does the US have a culture of mass consumerism? Great, let’s focus on B2C products. Does Brazil have vast areas of cultivated land? Then how can we disrupt agriculture in a way that makes this land evermore competitive or even better?
Internationally local
It may seem that I’m trying to focus startups on their local markets instead of a global scalable solution, but the truth is far from that. Economic theory states that the more specialized each population gets, they become more efficient in producing something the market wants, driving costs down and maximizing profits. So, if we take advantage of the cultural and structural aspects of each country, we can actually benefit the whole world.
Global problems that can be solved through entrepreneurial solutions are just that: problems that happen all over the globe. If we can benefit from local aspects of consumer behavior, like Facebook did in the US and, before that, Orkut in Brazil, then maybe we can create more products that actually change peoples’ lives throughout the world.
Imagine all the people
Returning to the main argument here, the truth is there isn’t just one heaven for startups. We should not make Silicon Valley the safe haven and overall solution to all startups that it has become. Each civilization has its own order of affairs and should have a special Startup Capital that focuses on attacking problems that benefit from local culture and business aspects while having an impact on the world. Admitting the existence of a perfect formula for startup development worldwide is just as near-sighted as admitting that the world can live only on oil for the rest of humanity’s time.
What remains is to understand how the different startup communities can benefit from their own culture and local know-how to develop evermore innovative products that impact the world on a large scale. And to internalize that while American startups do seem to be the ones that are successful while others simply struggle along, it is because trying to replicate their model outside of their context only leads us to mediocrity and a poor understanding of our market.
Startups can be those mythical creatures that revolutionize the world, but only when they understand the time and place where they are. Apple would not have become Apple if it wasn’t in the US in the 70s, as the homebrew computer clubs did not exist in other parts of the world (or at least not as proeminently as in the US). And it was exactly in that context that Wozniak and Jobs could imagine a future when everyone would have a personal computer.
Lastly, in order to create something that even tries to resemble Silicon Valley in our own cultures we should try to understand what it is that we can take advantage of and what are the values startups should uphold in your local ecosystem. Entrepreneurs are still the driving force of the world, but they need to see further than normal people and have the passion to struggle in that direction.
Thanks to Jean Lucas and Pedro Lopes for reading the drafts.
