So there you go. In Teleport Cities we have accumulated 300+ dimensions of income, cost & quality of life data about 260+ cities around the world. And now you can embed quite a few subsets of those, formatted and visualized as widgets about your favourite cities anywhere in your own content as you like.
]]>Jänesetüdruk Viivika oli väikest kasvu loom, aga igas mõttes üle keskmise: nutikas, kannatlik, uudishimulik ja ilus. Ta kasvas täiesti tavalises peres, käis tavalises koolis ja elas üldjoontes täiesti tavalist jänese-elu. Ainus asi, mis tema juures oli silmnähtavalt teistmoodi oli see, et tal oli vaid üks kõrv. See üks kõrv oli nii pikk ja kena nagu üks jänesekõrv olema peab, aga teist lihtsalt polnud.
Viivikal polnud teist kõrva olnud juba sünnist saati, nii et ta ise ei osanud teistmoodi elu ette kujutadagi. Kui ta pisike oli ei näinud ta üldse mingit vahet, aga mida edasi seda rohkem kippus see eripära talle ennast meelde tuletama. Viivika ema muidugi ütles, et see puuduv kõrv teebki ta kõikide teiste jänestega võrreldes eriliseks ja armsaks. Aga teiste loomalaste suhtumine rääkis midagi muud.
Lasteaias olid lapsed veel avameelsed ja ausad, aeg-ajalt vaatas keegi talle otse silma ja küsis otse: “Kuule, Viivika, miks Sul ainult üks kõrv on? Mis teisega juhtus?” Ainult Siil Tingo ei küsinud nii otse, vaid puksus kohmetult, kuigi oli aru saada, et ka temal oli lihtsalt siiras huvi.
Algkoolis hakkas asi minema natuke häirivamaks, sest vahest ilmus välja mõni narrija. Näiteks pisut õel Nugisepoiss Märgo, keda teised loomad kutsusid vahest selja taga ka ka Loll-Märgoks, aga samas tundsid natuke kaasa ka, sest metsas oli üldiselt teada, et Märgol ei olnud just kõige soojem ja sõbralikum urg. Märgo veetis praktiliselt kogu kolmanda klassi Viivikat jälitades, et igal võimalikul ja võimatul juhul torkavate naljadega meelde tuletada puuduvat kõrva.
Ja millalgi põhikoolis pöördus kõik pea peale. Viivika puuduv kõrv muutus millekski, mille ümber jäid justkui õhk ja aeg seisma ja kõik hakkasid teesklema, et seal ei olegi midagi küsida, vaadata ega rääkida. Häbelik lõvipoiss Füügibert, keda Viivika pidas üldiselt oma heaks sõbraks, ei vaadanud temaga rääkides talle kunagi otsa, sest silma vaatamine tundus jube lähedal sellele kohale, millest Füügibert ei tahtnud kunagi juttu teha. Silmside oli probleemiks teistelegi, ikka uitas klassikaaslaste pilk Viivikaga suheldes mõne vana kännu, põõsas istuva kireva linnu või oma tagakäppade peale. Teiste ebamugavus Viivika teistsugususe pärast tegi kokkuvõtteks ebamugava tunde hoopis Viivikale.
Ja siis tuligi keskkool. Viivika, kes oli, nagu öeldud, mitte ainult ilus vaid ka tark jänesetüdruk, õppis hoolega füüsikat, matemaatikat ja bioloogiat. Ülikooli-eriala valimise ajaks oli tal selge, et temast saab geenitehnoloog ja seda ta õppima asuski.
Juba kolmandal kursusel tegi Viivika laboris ühe väga huvitava uurimisprojekti. Ta leppis kokku Siga Prändoniga, et too eraldaks talle oma põrnakudedest mõned kvaliteetsed tüvirakud (ja Prändonil polnud üldse valus!). Viivika sekventseeris DNAd, paljundas vahvaid amniootilisi tüvirakke, siirdas, kopeeris, testis ja inkubeeris. Juba mõne kuu pärast oli tal peas kaks kõrva. See, mis täitis varasema tühimiku oli muidu “vana” kõrva peegelpilt, ainult õige vähe läikivamat karva, sest: ikkagi päris uus!
Jänesetüdruk Viivika avaldas läbimurdelise artikli, mis jäi viimaseks, kus tema nimi oli autorite seas veel professori oma järel. See on teadlaste puhul on jube oluline märk sellest, kes on kelle õpipoiss. Sealtsaadik edasi tegi Viivika veel palju aastaid ise üha uusi ja uusi läbimurdeid teaduses ja jagas juba teistele tudengitele uusi tarkusi.
Doktor Viivika ei ehitanud ju endale uut kõrva mitte selle pärast, et see puudus kuidagi teda ennast otseselt seganud oleks, vaid selleks, et teistel loomadel tema ümber oleks vähem ebamugav. Ja nüüd, nende samade oskustega sai ta aidata veel miljoneid metsaelanikke, kellel tervisega hoopis tõsisemad hädad. Näiteks Karuvanaema Libraato kehvapoolne südameklapp või Koopaorav Rein, kelle pisikesest kintsust Hunt Hälvo kord joomatuuril tüki haukas, mis oli üsna valus ja oleks ilma Doktor Viivika tehnoloogiata jätnud koleda armi, ükskõik mitu korda Hälvo ka järgmisel päeval vabandamas käis.
Nii selguski, et Jänesetüdruk Viivika puuduv kõrv ei olnud mitte probleem, vaid suur võimalus teisi aidata.
]]>Aga nüüd mõtlesin, et panen need parem avalikult välja. Eriti endasugustele kaugemalviibijatele, kellel pole enne homme algavaid e-valimisi olnud juhust tunde ETV ja eraportaalide debattide ees istuda ja kelle inforuumist Eesti päevapoliitika kajastused moodustavad kaduvväikese osa.
Kui Sul on vaja teha otsus ja aega vaid tund või paar, siis mind on aidanud enim need lingid:
Kui tahad võtta kraadivõrra emotsionaalsemalt või lihtsalt ülaltoodud pingutusest pisut lõõgastuda, siis tuleta meelde ka:
Ja lõpetuseks avastasin samasuguses meeleolus 4 aastat tagasi kirjutatud blogiposti. Ehk paari nime vahetades kirjutaks põhimõtteliselt alla ka täna.
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1. What’s the opinion and the image of Estonian IT overall and e-residency especially (is there any real interest in it?) overseas, at Silicon Valley. Is it recognizable?
Awareness of Estonia as both a startup country and a country as a kind of a startup itself has been gradually bubbling up over the last decade. Probably Skype’s first exit to eBay in 2005 is a good milestone to think about for increased visibility, and there has since been a steady flow of cool developments both on the startup scene and from the government who builds tools for a digital society. Estonians themselves have gotten already tired of talking about cashless mobile parking or literally three-click tax reports or casting parliamentary votes online — but for most of the world these stories are still utopian compared to how they live.
Why the e-residency is such a unique thing is that it builds on top of all these digital services used internally in Estonia since the digital signature laws of 2001. Estonia was not handing out the first e-resident card, but like a 1300000th ID card with all the learnings behind it. It is a complex layered cake from legal setup, infrastructure to manage the certificates, end user device adoption, private and public services playing together, etc. And now Estonia has decided to open all that up for the world, to become the nation state underwritten SSL for the Europe and the world. It certainly has gotten noticed, especially in tech circles. It is no accident the first Americans to become Estonian e-residents were Silicon Valey tech VCs Steve Jurvetson, Tim Draper and Balaji Srinivasan.
2. If Estonia has such advantage over other countries, so why do Estonians leave the country (mostly to the US) with their startups?
Ha, that’s precisely the trick. The way I see my life is that have not left Estonia, but I am choosing my physical and regulatory locations depending on particular needs. There are places with good weather, great talent, available funding, great schooling for kids, enjoying the beach – and it is very unlikely you’ll find one single perfect place for everything. These days I spend roughly about 1/4 of the year in Estonia, around half in Silicon Valley and then traveling elsewhere. I keep legal entities in Estonia for EU presence, the favorable taxes and super low operational overhead, and in Delaware to make it easier to work with certain investors.
And now, having an Estonian passport and Estonian digital ID is a massive enabler for this kind of modern mobile reality of building a global startup. I spend 100 times less effort on transferring money or filing taxes via Estonia while I live in Palo Alto, compared to the painful, paper-and-fax driven US banks and government systems.
I see dozens of other Estonian entrepreneurs living the same way. Estonia is our home base, but we get around a lot. In my current startup, Teleport, we have talked a lot to startup founders globally about this and we hear that the main drivers for choosing their location are around being closer to their clients, raising funding, hiring top talent, etc. It would take us nowhere if Estonian startups would just sit at their 1.3M people home market and hope to achieve all of the above AND conquer the world. If you want to own the world, you have to spend time there.
And the #EstonianMafia founder scene stays tight and helps each other using virtual channels, not by co-location.
3. Why there is no new Skype on the doorstep? I mean worldwide project. Is there any special reason for that and signs of it coming?
I like your thinking – being involved in just one $8.5B exit per decade, is not enough! Also, we shouldn’t forget it is just first 20 years since the end of the Soviet occupation that punished entrepreneurship as a criminal offense.
Estonian startup scene is bustling above its size, just remember there are about 600,000 working people in the entire nation, and maybe 20k in tech. GrabCAD just had a $100M exit, there are others like Fortumo, Creative Mobile, Pipedrive, ZeroTurnaround likely above that valuation. TransferWise will likely be next to enter the $1B+ club of unicorns. There is a constant flow of news of Estonian startups getting $1M+ early stage rounds funded internationally. This should be a signal we should look at which of these startups made their potential in 3, 5, 10 years.
Already today, top 50 nascent startups in the country are creating more high value jobs (as measured in social taxes paid to state) than Microsoft’s Skype 500-person R&D center in Tallinn. Estonian Energy, the largest employer in the country overall. So there are other ways to measure why we need startups and if they are successful than just worldwide domination. Even if certainly our top teams are very much aiming for that goal, too.
Skype will always be a unique story in world startup history, not just in Estonia and another dozen countries where it had team presence, because of the profound impact of people’s lives and the resulting brand awareness. And it has had an amazing effect on kickstarting the rest of the scene, pretty much behind every Estonian startup today you will find founders, employees, investors or advisors with past experience from Skype.
4. There is a popular blog among Estonian IT-people – Dotteebubble – which speaks about governmental overfunding of Estonian startups. What’s your view on that opinion, is it worth of such funding of IT-sector by Estonian government?
I am not going to comment specifically on a judgmental and patronizing blog by anonymous trolls. Haters gonna hate, makers gonna make. Probably a sign of a vibrant scene if there are losers trying to get their share of limelight – our own petty little ValleyWag.
On your broader question, if you study the history of innovation and look at practices around the world there has always been collective money pooled together to help explorative science and technology to survive. Startups are fragile, bold ideas typically look stupid at their start and 9/10 experiments fail. So the choice is simple – do we, as a society want to help all these seeming mistakes to happen in order to stand a chance to reap the benefits of the few breakthrough winners or not?
Now, how we pool resources together is a matter of technicality. Internet itself was born from publicly funded DARPA. Silicon Valley venture capital boom started in 1978 when pension funds were allowed to flow into private equity, and now a huge part of the funds comes from university endowments — both of these categories would Europeans think of as a kind of “public money”. Israel’s startup boom is deeply rooted in decades of state funded military R&D. Then think of China, Singapore…
Compared to many of these examples I’d say that the Estonian public support systems for startups are quite a level playing field, with clear rules and transparent process. I like how the state doesn’t try to make solo decisions over which startup will win – rather the investment parts are set up to invest in private venture funds run or co-invest with pros with their own money and reputation in the game.
And best of all, if anyone has any ideas how to make these systems better, all the agencies and government officials and politicians are super accessible and adaptive in a tiny country. I collated a bunch of founder concerns about running their company legally in Estonia to a blog post last year, and mere 11 months later the parliament passed an update to the business laws. Try that anywhere else.
]]>As it isn’t a good tone to have a blog sit stale for a year, I figured this place deserves at least a brief set of links as an update on what’s been happening.
The EIR period at Andreessen Horowitz was not only amazing on personal level, but also fruitful professionally. Even though I wrapped up there only in May, since beginning of this year I’ve been working on my next startup venture: Teleport. We officially founded it with Silver and Balaji in April, closed some seed funding soon after and now have been head down building team and product.
On November 14th, we released the first modest piece of our location search tech in public preview, aimed at helping startup people find the best place to live in the San Francisco Bay Area – give it a try and tell me what you think!
If you’re interested more about what we’re up to, read the coming-out-of-the-closet blog post from April, or a more recent one explaining our focus on startup people. Or just lean back and let me explain it to you in 10 minutes in a speech held at Slush 2014:
It is quite amusing now to see how all of this builds on my Slush 2013 speech and blogpost series on Looking at Europe from Silicon Valley… Some things are just meant to come together, I guess.
As you can guess, life on the early stage startup road is quite busy, the good kind of busy. Hence you can find me quicker at these places than on this personal blog for now:
]]>The tool I chose to increase control of the process is super simple: write down the list of properties that define an inspiring next venture for you. And then, iterate through discussions.
The actual elements that make the list are very subjective, of course, covering anything from the mission of the new business to the technical aspects or business model preferences to requirements for a personally fulfilling role. They can come from your life experiences (good and bad), education, aspirations and role models. Actually, I’m sure every entrepreneur, or any professional seeking for the next stage of their career has a list like this in their head (at least, sorta-kinda), but the trick is to write it down and actually use it systematically.
Writing anything down in a concise, systematic way makes you understand it better. While writing you reconsider the order and importance of your criteria, and realize how even a nuance in language you use when talking about what excites you can lead to quite different paths. Sometimes you will learn that how most of the world buckets things, might not necessarily work for you: for example, after thinking long and hard about if I want to limit anything about consumer vs enterprise businesses on my list I came to a conclusion that dichotomy is irrelevant for my interests; I ended up adding a bullet about human users and another one about business model simplicity instead.
As far as daily usage goes, I’ve developed the following habits around my list:
As you go through your search process, the list itself will change. I tend to take a few minutes after any meeting that you felt changed your perspective, open up the Evernote doc with my list and see if I want to add, change or even remove something. The first version of my list looked like this:
Smart/great people
IP versus just some kind of intermediary
Never p/hour — a real product/service company that is scaleable
Creative, quicky, crazy, spikey
Fun, good relationships
Diverse
Doing the right thing — not cutting corners
strong mission/passion
And, this is what my list of criteria has evolved into by today over the last 4 months:
Validation criteria to narrow down choices (v1.8):
Ideally, whatever I end up doing should…
- solve a notable problem for people and give them direct value (and more time), not help them “waste” time
- -> where are people solving some really hard problems yet they are relatively clueless about the natural modus operandi of nimble internet startups? (ex: robotics, synthetic bio, drones, space, food, health, education…)
- -> some themes in themselves feel too “light”, e.g gaming is low prio without, say, educational mission
- -> open Q: what about other limitations? avoiding just “first world” problems? pure financial engineering is boring too?
- have a critical software component, not be driven by just rearranging atoms
- -> coming from consumer/internet/software background, what could I be doing that is NOT consumer/software/internet? what are interesting adjacencies?
- -> I have little or no hardware/manufacturing/logistics background to win by just doing _that_ part better
- prefer clean & simple business models over complex multi-edged setups
- -> transactional, provide-value-get-paid models preferred over advertising & others where user is not the customer
- stay close to human users and build towards a recognized brand, not sink too deep in the value chain / tech stack
- -> consumerization of enterprise UX can be cool, but deep layers of enterprise data centers or network security are not personally interesting
- let winning be decided by innovation & execution, not just regulatory environment or any other dominant party
- -> healthcare, education, consumer finance, e-democracy have notable yellow flags here
- scale with little additional human hours
- -> consulting/agency models with linear manhours to revenues ratio are not interesting
- be internationally repeatable in nature, not designed narrowly to only work in a specific market
- -> not exploiting US-only market failures or regulatory loopholes
- reside in the intersection of disciplines, not solely in one
- -> because that’s where the surprises and game changers usually happen, for ex design+engineering, CS+anthropholgy, space+big data, social sciences+mobile…
- created together with a tight team of co-founders/early staff with shared values, not alone
- -> I work better in iterative arguments and collaboration than say, dreaming alone & having anonymous contractors execute
- personal role with full accountability for business and the organisation building it
- -> co-founder/CEO; or very high bar of scope if not those (COO? CPO? VPP?) and broad influence on the overall org’s direction & culture
- + enable a lifestyle that somehow includes Estonia (and Europe) for my kids, family & myself (e.g a notable part of business tied to Estonia; at minimum spend weeks or a month every summer in Saaremaa at will; retain ties & contribute to Estonian startup scene, etc)
Obviously, this is an illustration for the structure rather than contents of what your list could be.
]]>If you rather prefer long form reading (and to contribute to discussion), this short version later expanded into a series of 3 blog posts :
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In many ways, an EIR is the ultimate meta-job, in the sense that the sole purpose of the job is to figure out your next job.
The objective of this entire exercise for me is to come out on the other side with a new entrepreneurial mission, either by creating a brand-new startup or joining some early stage team met along the way. I have co-founded a few companies in my early days as an entrepreneur, and more recently spent years as an executive on a true rocket ship (Skype). Comparing these experiences I have learned the inspiring substance and impact you can have matter more than if you personally are the first, second, fifth or thirtieth guy in a budding team.
I have become somewhat agnostic to the exact organizational stage of the company I join or found and to be clear, so is Andreessen Horowitz. We can both be happy if I start my own thing again, or help lead an existing startup. If to draw any lines, it is unlikely I’ll join something that has already reached triple-digit headcount.
The objective for the hosting VC firm is to keep the “family network” active and productive for everyone involved in the long run. In our setup there are no up-front agreements about any money changing hands. Should the company I end up building need financing I get to pitch the General Partners the same as any other incoming opportunity. One difference will be I have spent more time than usual getting to know the investing team, and they have had a chance to develop some opinion about me as a person. But no matter how much time we spend in the lunch line together, the firm may choose to invest or not based on thinking related to me and the business I pitch — or equally on external arguments such as the makeup of the current portfolio and the firm’s focus. Bottom line: no guarantees on anything other than that we’re very likely to remain friends on any outcome.
While I and the firm keep our ultimate end-goals in mind, here’s what I find most valuable of the kinds of things Andreessen Horowitz is providing to me during my time here:
All these resources, and virtually no obligations outside of my own explicit choices result in quite humbling freedom but at the same time can also drive one crazy with the absolute lack of focus in the broad ideation phase I’m still in. I find it is sometimes way too easy to fall into the trap of only reacting to shiny new ideas swooshing in every day from others, and completely loosing inertia on things I proactively want to push. To bring some balance and structure into the chaos, I decided that every week I need to do at least one thing in each of these four categories:
Work on my own ideas. That can mean taking an hour to brainstorm, and make my list of potential ideas longer. Or sometimes, it’s taking a day or two to dig deeper into a particular item already on the idea list, and talk to potential users and industry insiders to test if anything is there.
Examine others’ ideas. By Monday morning usually the group calendars show the pitches for the week ahead from which I pick and choose. If possible, I join at least one of the internal deal reviews in between.
Connect wit the existing portfolio. This is slightly tricky to manage, because I don’t want to appear as if I’m looking for a job when I’m really not, and also to be very mindful of sucking up busy people’s time without an agenda. The most fruitful conversations thus far have been with founders who are just planning to hire some key product management people or someone to help them to scale, especially internationally – these are topics where discussing what worked and what did not at Skype can be a good use of time.
Get out of the firm. As a matter of balance and diversity, I try to fit something unrelated to a16z into every week – either catching up with some old contacts or dropping by a meetup with strangers, of which Silicon Valley has plenty. A perfect example is a dinner we recently had with EIRs from different VC firms to discuss each other’s approaches to the role.
When I started, an EIR who “graduated” the firm just this spring said that he came in with a plan to be in and out in 3 months. He eventually had the idea he is now building a company around in month-seven and was out on the day of his nine-month anniversary.
After my first three months here have passed, that pace seems about right. Every week I know better what I want and where I’m headed. I have iterated on a personal decision making framework that helps to filter and also kill ideas and requests quicker and more consistently (which could be a blog post in itself, if anyone cares). I am not quite there yet, but with some tools in place to quell the EIR chaos, how exactly my next business will change the world can become the sole focus.
Which is what an EIR fundamentally tries to do, much like any entrepreneur, in or out of residence.
]]>After looking at the widening gap between European and Silicon Valley tech scenes and establishing that the usual first priority, raising money from the other side might not be the most feasible way to fix this – the questions becomes: how can we build more non-financial ties between our scenes?
As US is not paying close attention I believe that the key to the solution is on the European side. And to succeed in driving this change in relationships, Europe needs a mindset shift.
When building high-value ties in any network the question should never be what you get, but rather what can you can give to the other party. What can you help with, what can you teach, what can you spare. This tends to be true with your friends, your community, your country… and I would suggest also when you think about doing business with Silicon Valley.
Too often startups from around the world and among them from Europe go to Silicon Valley only to get something. Unfortunately, as it usually goes, a begging little brother will be treated as one.
Dear European entrepreneurs: we have been too modest sharing what we’ve got. Despite of the stereotype of history obsessed Old World trotting behind the brave New World rushing to The Future, I believe Europe has a lot to give in the global high tech game. There are ideas Europe should proudly put front and center as distinct and unique value we can bring. Let me give just a few examples:
Silicon Valley’s weakest spot today is the constantly unsatisfied demand for talent capable of solving hard problems. Yes, there are amazing, experienced people around – but if they want to live anywhere fancier than a tent in Mission or Palo Alto, let alone afford good schools for their kids — they will cost a lot to hire. And worse, despite of their high price the endless inflow of exciting ventures to join drives down average tenure and loyalty in the Valley, compared to how these same people would behave in similar companies even on the East Coast, let alone in Europe.
European contribution here has been largerly the simplest: sending talented immigrants to US. Even if we shouldn’t stop people of the free world from living and working wherever they want and departures from Europe are at much smaller scale than from many places in Asia, talent immigration has one unpleasant feature – the source of talent will in the short term always feel they are loosing out.
The next in level of complexity, but more sustainable for both sides would be setting up more development outposts across the pond, helping Valley firms build offices and hire people in Dublin, Prague or Kiev. Or alternatively, Europe could offer more well-functioning M&A targets. Meg Whitman used to call this “off-balance sheet R&D,” when she was acquiring auction sites for eBay from around the world, especially those doing something better already than their new mothership. In this model jobs do remain in Europe, but not the large exits or even annual dividends.
As a more far-fetched idea, why couldn’t we make this a two-way street and provide interesting “job adventures” in Europe for early-career Valley experts. There could be some who would drop their product management, product marketer or business development roles as the #3481 guy in Facebook to a 3-year stint in a cool European city where they can be #1 in the entire country in what they do. And once they go back – they can sell their new-found international experience as a truly unique skill. Yes, this is a tough sell at first, but we did that repeatedly at Skype and companies like Soundcloud are doing this again.
For any European who has spent an extended stay Silicon Valley it can often feel surprisingly backwards if you are just trying to live your life as an ordinary citizen, or may I say e-citizen as you do back home. Silicon Valley is not uniformly as advanced as it often looks.
I gave a short speech on this experience alone at Stanford last spring and will not repeat the whole argument here: Future That Should Be Here Now video and a blog post with full transcript are available if you’re interested. The underlying point is that when it comes to online and mobile applications truly embedded in how people go about their daily chores, how they sign and exchange legal documents, how they interact with the government, how they do their consumer banking, how they get service from their doctors and so forth, many places in Europe are lightyears ahead of what is available to a normal American resident today.
This is a huge opportunity to openly share the experiences and teach what we’ve learned in Europe to the waves of startups (and why not the various levels of US government, looking just at the IT-side of ongoing healthcare reform) attempting to only start solving similar issues for the people in their markets. Valuable, “been there done that” advice could take the form of board seats or equity stakes for Europe, too.
Even for the most self-focused entrepreneurial ventures, should they make it to their B-rounds or even cashflow-fueled growth, comes a day where they need to look outside of the home market to expand their business. And no matter how much the mobile handset makers talk about the next billion people coming online in Africa and how lucrative the already-online billions of users in Asia are, the most common scenario for the Groupons and Airbnbs and Ubers of the forseeable future is still to figure out their expansion strategy for UK, Germany and France. Europe still is the rational next market for most US rocket ships who are looking to find customers with above-average income and access to credit cards who live in understandable regulatory environments and enjoy reliable infrastructure you can deliver your products and services over.
Yet, as the truly single market of European Union is still a slowly evolving dream, figuring the operations out on a country-by-country basis to cover the full 400M user potential can be tricky. And who else to help US entrepreneurs to crack Europe than those who are in Europe and understand Europe. Again, we have something to selflessly teach here.
The value of understanding foreign markets does not stop with homely Europe, though. Still far too much of US-originated innovation is born in the form of English-languaged iOS-only apps with hardcoded $ signs. European entrepreneurs are much better fit for operating globally. Multi-currency, multi-culture and continued adaption through expansion are much deeper in European startups’ DNA. As a proof point, look at how the likes of Rovio (Angry Birds), Supercell (Clash of Clans), Skype and Evernote have conquered the Chinese and Japanese markets that have remained not just a challenge but rather impenetrable mystery for many American competitors come before them.
Counter-intuitively the teams that have the most natural skills for global adaption come from the spots on the map of Europe so tiny that they are hard to find even for the geography-savvy Americans. If you’re a startup coming from Iceland, Estonia, Luxembourg or Slovenia you have virtually no notion of such thing as a home market. You are preprogrammed to think global, and thus, you probably have a lot to teach your friends in US how that comes so naturally for you.
In the post-Snowden days we’re living in the questions about physical and legal location of users’ data and the regulations governing their privacy are high on the agenda for internet entrepreneurs. Since the internet was born in the US and the strongest private players on it have been US-regulated companies the rules and behaviours have been evolving accordingly to date.
Now, if you look at where the users of internet live today, less than 10% of them are Americans — a share still on decline. It is obvious that other nations will attempt to have an increasing say in the governance mechanisms and regulation of the system.
This can potentially become a tidal wave of change and risking international breakdowns and further fragmentation of the internet is not in our shared interest. Likely some fundamental agreements on how our global networks will operate and what are the rights of people and companies on them are will be defined across the Atlantic before they get to a global group hug, especially involving the BRICs. As a little signal, look at who is chairing the panel of internet luminaries ICANN created this week to adress these topics.
Europe is already thinking a lot about digital security, privacy, net neutrality and regulation. And this is not just a governments thing, European tech scene can help US peers to figure things out as private entities first.
I hope some of these examples of non-financial contributions Europe has to offer to the Silicon Valley and broader world resonate. I’m sure you can think of many more if you put your mind to it, and create new business for both sides.
Just one additional thing I wanted to mention here while all this potential bridge building is going on: I think we also owe it to ourselves to fix a bunch of legacy misconceptions that make working across Atlantic harder than it should be.
First, when talking to my friends in Silicon Valley it is startling how geographically over-simplified the widely spread image of Europe is. Even those who know the continent well still think that startups only happen in the “big business cities” like London or Berlin.
The good news we should spread here at any chance we get is that European tech scene is much more diverse. There are pockets of startup activity with global ambition in hundreds of cities around Europe, and dozens of them are likely to realize some of that potential on global scale. Yes, Valley-like physical gathering has massive benefits and would only seem sensible over time but I would not bet on that happening in European ecosystems any time soon. The gaming gurus of Helsinki will not move to London en masse, and design wizards of Copenhagen will stay mostly out of Berlin still. For the visible future the right mental models for thinking about European tech ecosystems are still those of interconnected islands or molecules, rather than few huge metropolitan hubs. As one sign the European investors with the highest quality portfolio are the ones who take the time to tour around the continent at regular intervals, such as Seedcamp who scouts their annual batch of investable startups through events in dozens of Mini-Seedcamps across Europe every year.
And secondly, because of the Iron Curtain legacy as well as the dichotomy Americans use to distinguish between their own two coasts back home there is still way too much thinking of Europe in the East vs West dimension. This distinction has become outdated over the two decades since communism fell. Mind you, many of today’s tech entrepreneurs are too young to remember that end of an unfortunate era of repressions as a personal experience. If you look at the borders of European Union or which countries belong to the single-currency Eurozone or the Schengen area where you can move around freely without a visa or generally in which countries people speak fluent English – the continent looks both formally and informally more unified than ever before.
When it comes to tech, the picture is made even more diversely interesting with bordering countries such as Russia, Ukraine and Turkey. If anything, the recent years have introduced a bit of a North-South differentiating axis to European entrepreneurship mindset, macroeconomic growth and youth unemployment numbers and such – but I think it is in all our benefit to not get dwelled in that new separating axis before it grows into a chasm. Single Europe is a much more beneficial concept for everyone, including Silicon Valley.
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Thanks for hanging in there until the end of this post series. I do sincerely believe that Europe and Silicon Valley tech scenes should become closer than they are today. For the US side this would presume paying a little bit more attention to the world outside. And for Europe a bit more confidence and a mindset of giving something unique and valuable, as opposed to just trying to get early stage funding from the other side.
As a result, I am sure more non-financial bridges can be built and as it has been shown by some VC investment related research: cold hard cash will eventually follow the international corridors where smart people are already on the move.
]]>Europe’s tech scene is buzzing. Those of us who have been on both sides can attest that the people innovating there, business models attempted and technologies applied in Europe are very much aligned with what’s happening in Silicon Valley, despite of the separation. So it would make sense to link up more, right?
As a healthy sanity check before jumping to that conclusion, let us ask: why would we need stronger ties? Looking from Europe, that is.
As witnessed in Part 1, Silicon Valley is not spending much mindshare outside and the pull for tighter relationships has been on European side. Yet, I have been surprised how often I meet European founders who are still planning to buy a plane ticket or have already landed in SFO but can not answer this simple question: why? I mean, selfies at Infinite Loop Drive and group pictures at Facebook and Google campus logos are nice and all, but beyond that – what’s in it for your startup’s success?
Even walking through a list of obvious external influencers and checking their relevance could be enough for a sane answer.
Is it about the climate? (And believe me, coming from the European equivalent of Alaska — I could actually see and acknowledge this point alone).
Is it about the expectedly omnipresent buzz, geek celebrity sightings and the hope for striking gold by just being at the right place at the right time?
Or, getting slightly more serious – are the companies that matter in your space already in Silicon Valley? The ones you want to compete with, learn from, partner with or steal bored employees over from?
Speaking of talent – is hiring what you’re here to accomplish? The sheer brain power graduating or dropping out Stanford and Berkeley is amazing. On more seasoned front you find people who have not just built for three companies but scaled them to hundreds of millions of users (and I’m afraid — in a repeatable way). And San Francisco breeds the culturally unique combination of hipster-engineers. All true. Yet all these people get 5 headhunter calls a week and you better have something to sell them between pre-IPO jobs at the next Facebook or Airbnb or Pinterest or Twilio — or the $500k seed funding with their own startup’s name on it.
Is it about building your story then, or more Earthly: public relations efficiency? While you can spend about the same amount of time telling your story to a reporter or blogger in Barcelona or San Francisco, it is true that in the latter case your message will be spread from TechCrunch or Wired or Buzzfeed to people you want to reach in 200 countries around the world and among them – you would get the the Barcelona coverage as a side effect. Less localized and personal, maybe, but more efficient – for sure.
What about the users of your product, your customers? Sometimes what you’re building can be designed specifically for the consumers or companies of US and it makes all the sense to be located close to them. In other cases I see Europeans looking at US as a better-wired (not sure I agree to this one as a consumer on both continents), credit-card enabled, tech savvy market they believe will boost their take-off faster than their home country – alternatives they were comparing as stepping stones for their eventual global dominance.
While both of these arguments could be valid for many cases, more intriguingly there are some other business ideas coming from Europe that would actually not have a good fit with US as a launch market. There would have been no sense in Skype selling SkypeOut first to Americans in 2004, if majority of the calls in US stay inside one area code or state. Nor no sense in Transferwise attempting to convince American consumers to buy foreign money from their peer-to-peer currency exchange, if they only need any once in 2 years, compared to British retirees who need Euros for their Pounds every month to pay for a summer cottage on the coast of Spain.
Besides the market match for a startup’s business, European entrepreneurs have to frankly evaluate their location choice with the personal strengths of themselves and their founding team in mind. Speaking from personal perspective, I am currently lucky to be an EIR at Andreessen Horowitz, one of the top venture firms in the world. Yet, the relative advantage over thousands of other fresh immigrants I get in form of a friendly temporary home on Sand Hill Road doesn’t change the fact that I have been building software companies for 16 years in Estonia and worked most with teams around Scandinavia, in Prague or London much more so than in San Francisco or Mountain View. Europe still is where the best engineers I know are, it is the core of my network, my actual unfair home court advantage. Pragmatically, whatever I end up doing next will have an important European component – and if I were to be personally based stateside for some time more, this decision better outweigh the distance from the strongholds I’m leaving behind.
Only after this honest reflection can you decide the role Silicon Valley should play in your effort to build a great company in addition or instead of Europe. It might well be that relocation makes sense and you believe Palo Alto just has to be your new home to win. Or it might be you need a sales outpost in a more manageable half-way timezone, say in Boston instead. Or an annoying quarterly recurring flight to do that one specific thing you need to do in US, without moving your family. Whatever the outcome is, you have to know and believe in the logic that took you there.
By now I’m sure smart readers have noticed that I’ve carefully left the topic of funding for last, even though this too often tends to be the #1 thing to come over founders’ lips when asked why they’re in the Valley.
There is a simple, sobering reason why companies should have the logic for their “home” location locked down before discussing money: you will be far more successful raising seed and early stage VC financing close to home, on whichever side of the Atlantic it may be. It’s a fact.
The internationalisation of VC industry has been well on the way and one can draw quite pretty graphs of the $ flow into startups increasing over the last dozen years and so forth. Without going into all of that, I’d like to just leave you with one near-realtime data point from this year, 2013. Looking at closed early stage deals listings in Pitchbook, American VCs still invest in US and European VCs still invest in Europe, loud and clear:
There are some notable exceptions who are swimming agains this current (like Dave McClure with his Geeks on a Plane movement and resulting above-average geographic diversification of 500Startups portfolio), but in my overall experience, the “stay close to home” mindset applies to most institutional investors in a clearly structured way and is a notable behaviour pattern even for private angels on AngelList.
Successful tech investors — especially so on the “fat VC” side, but I’d argue across the board — believe that there is much more than they bring to the table than just money. No matter how much video calling has improved over the last decade, helpful actions such as committing time for board seats, opening hiring networks, pushing corporate development efforts and just making quick (unscheduled!) calls still work so much better with the investor and entrepreneur in a close location & timezone. Vast majority of investors fail at doing all this over distance, and don’t invest if they can’t do these things.
And further more, just the mere attempts by European startups arriving to Silicon Valley to open a conversation with trying to raise money to another continent hurt potentially larger relationships they could be building.
Think of it as an example of the query theory fallacy in action: our judgments are constructed based on the responses to a series of mental questions. These queries are processed serially (as opposed to simultaneously) and earlier queries produce a larger and richer set of responses compared to later queries (due to both cognitive processing limits and interference of the first queries’ responses on subsequent queries).
Now, if an European founder walks to a Silicon Valley investor, skipping “hello” to ask “would you invest in my seed round?”, they are very likely to get a “no” for all the right reasons that have nothing to do with their startup, but everything to do with how the investors run their business. And this conversation gets a “no” too early in the serial query, it never even gets to any potential mutually useful bridges we could be building across Atlantic.
In the final post of this series we will further discuss what these other, non-financial bridges between Silicon Valley and Europe could be.
Continue reading: On Bridges, Part 3: What Can Europe Give to Silicon Valley? >>
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