The fundamental structure of the global economy is shifting- from the West to the East. China and India are expected to lead the global recovery and as such venture capitalists are also shifting their focus to these countries. Hoping to find the next big ideas and companies.
At the heart of successful new companies lie successful entrepreneurs. And if India and China are going to produce the next Microsoft’s or Google’s of the world, do they have the entrepreneurs to create and grow such companies?
It’s a question I have been contemplating for a while. On the surface, there are very successful entrepreneurs who have created large companies in the East. So, this should be a pretty easy question to answer. However, I feel there is more to the issue.
Silicon Valley is the undisputed leader in producing start-ups and innovative, large technology companies. The most promising Web 2.0 companies (Facebook, Twitter, LinkedIn, etc.) are all based in the Valley. Is it that that Silicon Valley produces the best entrepreneurs? No, but it has the right culture and ingredients that attract the best entrepreneurs from all over the world.
So, what’s unique about Silicon Valley? Having relocated to the Valley myself in the past two years, I feel the key ingredients that make Silicon Valley unique are talent, culture and money. Lets examine each one of them.
Talent: Silicon Valley is the Mecca for technologists around the world. The Valley constantly attracts the best people in the world. Spend any time on the main streets of the towns in Silicon Valley and you will see Indians, Chinese, Russians, everyone from all over the world. Being home to Stanford University and just a few miles from University of California, Berkeley also ensures a constant flow of new talent to the companies in the Valley. Most importantly, the Valley is like Hollywood. The talents who come here have big dreams and ambitions of making it big. In most other places people happily settle for good jobs, but in the Valley it’s all about the big dream.
Culture: This for me is the single most unique aspect of the Valley. There is a tremendous culture of experimentation and risk taking. It is common wisdom here that the best entrepreneurs are the one who have failed a few times. Failure is not just accepted but also in fact celebrated. This attitude simply does not exist anywhere else in the world.
Money: All this experimentation and openness to failure requires money and funding. Silicon Valley is the epicenter of venture capital. There is more capital spent on Silicon Valley firms than any other location in the world. In fact, about 50% of all venture funding in the United States is provided to start-ups in the Valley. That’s pretty amazing.
The combination of the talent, culture and money in Silicon Valley makes it an incredible engine for fueling entrepreneurs and successful start-ups. So, coming back to the idea at the top of this blog, what will it take for China and India to produce the large volumes of entrepreneurs and start-up’s? It will come down to will the best talent in these countries turn down, the safe jobs to pursue their dreams and risk failure. Will there be enough of these entrepreneurs with large dreams and ambitions to build global giants?
While there is an abundance of talent in both countries, the most promising graduates are still flocking to big companies and the relative safety of large salaries and security. Culturally, failure is considered fatal, let alone accepted and celebrated. But in all of this is opportunity – for those entrepreneurs who are willing to forgo the safety of big company jobs and embrace the roller coaster ride of start-ups.