ENTREPRENEURISM ABROAD... FROM ALWAYSON
My Two Cents... Still a Ways to Go

Interesting interview and discussions at AlwaysOn on comparing entrepreneurism in the U.S. and abroad. I posted it up here with my quick reply and some other comments, but check out the rest of the interview and sign up for the AlwaysOn community if you're interested in the world of technology and business.

Here vs. There: Foreign-Born Entrepreneurs Compare
Watch out Silicon Valley, entrepreneurialism is alive and well—and out to eat your lunch—in other parts of the world.
NewsTeam | AO [Always On] | POSTED: 04.22.04 @10:45

Stone: In Silicon Valley we pride ourselves on having what we think is a unique blend of elements that makes starting companies so beneficial here: the availability of capital, the history of the Valley, and the tolerance of failure. In a splendid coincidence you are all foreign-born, so I'm curious to know if you think that you could start your companies today in your native countries?

Landan: You can. And the cool thing is that the unique combination of elements this place had for many years is now gradually being replicated in other places. We shouldn't fool ourselves that it is any other way. That just tells you what the situation is in Israel, which is my home country. Sometimes governments make good decisions, and in the early 90s the government of Israel had the insight to basically subsidize venture capital. That created a huge boom of investment, which was just amazing. Because the technical work force was already there, a lot of technologies that were incubated in the military industry were there, and the entrepreneurial spirit was there—what was missing was money.

The result is that—I might be wrong but based on my data—Israel is the country with the second or third largest number of public companies, and most of those are high tech companies. The number of high tech companies in Israel is significant, as there are only six million people there. I'm less familiar with other areas, but people have observed the Silicon Valley and realized how it works and are trying to replicate this. I believe the only thing to make Silicon Valley stand out for a long time is its proximity to the markets, which element you miss in remote foreign countries.

Kola: Could I have done what I've done here in India? It's a personal answer, for me, it's 'No, I don't think so.' But it is not a question of whether entrepreneurialism exists in India and can exist in India, the answer to that is yes. For me, it was only when I moved to Silicon Valley that I actually equated the stories of even the biggest tech companies [with] 'They are ordinary people, and if they can do it, I can do it.' And I think it happened to me in Silicon Valley, to be able to translate that to myself, to the competency, the ability, the desire, the ambition to do what I did. It's a path not taken, you can never speculate on that, but I don't think I could have done this in India.

Stone: There is so much fear now surrounding the migration of technology jobs to India. Do you think that's wrong-headed?

Kola: Stealing the manufacturing, so what's new about software? I think there will be something else that we innovate here and will be the brain trust of.

Magistri: I think Silicon Valley will remain an effective place. What made Silicon Valley was the dream of the startup, with example of HP, Sun, etcetera. They were all here, and they somehow attracted a given kind of people here. What is changing is that now some of these dreams are being planted worldwide.

Another fundamental shift that is happening here is that we have a lot to lose. If you look at what makes a startup effective it's that you're a small group of people with nothing to lose. Look at my company, InVision for my taste is becoming slower, it's moving at a lesser speed than two years ago because some of our energy is being allocated to defend what we have. In Silicon Valley there was so much wealth extracted from the marketplace during the Bubble. I believe there are quite a lot of people that are a tiny bit too comfortable and are spending too much time to protect what they have, to do another startup.

Therefore, I think we fit in an area where people still have the willingness to go after the startup, and the incentive is there, and there is nothing to protect. Israel is a good place—you see these wonderful companies that have three or four guys who are calling you three times a day because they want to do business. They want help, they want money, whatever else they want.

And the former Eastern Block countries have a very good school system. They are training people, the culture is still so-so, but there is willingness to do something. Some of the Asian countries. But there is a disclaimer, we have a lot to lose here. There is a lot of accumulated money here, and in my opinion, that is making us less willing to take a risk.


These excepts are from a panel discussion held at the Churchill Club earlier this year, when Newsweek's Silicon Valley correspondent Brad Stone talked to Vani Kola of Nth Orbit, Amnon Landan of Mercury Interactive, and Sergio Magistri of InVision Technologies. Read part one and part two.


Comments:

I believe the only thing to make Silicon Valley stand out for a long time is its proximity to the markets, which element you miss in remote foreign countries. "

"What is changing is that now some of these dreams are being planted worldwide."

The above two comments say it all. having markets is the key driver. The rest of the entrepreneurial ecosystem is already global or can be acesses remotely . The successful Indian & Chinese diaspora, the adventuring VCs, the local entrepreneurs are creating hot spots in Bangalore & Shanghai. Bangalore has on offer multitude of skills at very competitve terms , China has it's huge markets growing at a stupendous rate. But soon both will have both and ad all three (SV, Bangalore & Shanghai) will have markets, skills & capital.

"Could I have done what I've done here in India? It's a personal answer, for me, it's 'No, I don't think so.'"

What Vani Kola alludes to was still true till 3 years back , but is history now.

Ajay | POSTED: 04.22.04 @17:56
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Gentlemen, please stop thinking that all technology and money can be found in the Silicon Valley only.
There are so many talents elsewhere even in countries you would not think of. I appreciate Silicon Valley and I have been a student at Stanford University.

However, I have been an entrepreneur for many years and I think that I could start a business everywhere. Of course, my project would be different according to the place where I am. Some environments favor some specific projects. What I do not like in the Silicon Valley is the "success story syndrom". Being a successful entrepreneur does not necessarily mean that you have succeeded in building a big public company.

You could build a profitable small company and be very satisfied. Nobody would talk about you. But is-it what is important? What is important is to remain free and creative according to me. And this achievement is possible in any native country or anywhere in the world where there is at least a democracy.

Paul | POSTED: 04.24.04 @11:08
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Of course you can be an entrepreneur anywhere. This discussion is a matter of degrees and definitions. The entrepreneurial environments differ in each country with the amount of available capital, engineers, skilled management, exit avenues, and a host of other issues. Silicon Valley and much of the U.S. is naturally far ahead of the game because they've been through many more cycles, and the overly reported benefit of having the essential elements of strong research institutions, venture capital, and a deep talent pool.

I agree that countries such as China have the some of these elements, but if you dig deeper it is still very immature. How much smart money are backing these entrepreneurial efforts? Are they just looking for a quick flip like in the boom times? Do entrepreneurs have the legal and government infrastructure in their countries to support their efforts?

On the issue of talent, I would tend to disagree that many of these countries have sufficient talent pools. This is one big problem in China today. Not engineering talent, but management talent. I know from my native friends and relatives living there it's difficult to find solid managers there even if there is a inflow of Chinese nationals abroad with their Standford MBAs or 10 years at Intel, Virgin, or Nokia. This is even a problem in Korea which followed the U.S. during the boom times and created several entrepreneurial success stories, but for every success there were hundreds of failures and scandals. The same is happening in China and will happen if you listen beyond the headline success stories.

There is also the difficulty of being an entrepreneur in an underdeveloped market. If you already have deep capital pool, strong government connections, or close underworld friends :) then you don't have to deal with the hundred palms of greed. Even establish multi-nationals in China have to work with the problems of corruption and bribery to get many deals done, and such headaches as trying to clean up misconstrued booking of revenues or dealing with corrupt methods of competition against your company.

I believe it's up to strong leadership within the entrepreneurial community and established corporations to lead the charge for change in nations with lesser developed environments. Change to encourage and train more entrepreneurs, fair and just legal systems to protect investors and entrepreneurs, pushing for more government funding in R&D, etc.

BernardMoon | POSTED: 04.26.04 @01:52