If you do a Google search on the predicted global start-up scene in 2020, Ireland, Latvia, India, Dubai, Chile, Turkey, Estonia, Canada, Turkey or the Philippines will be listed as world leaders and many believe Berlin will be the start-up hub of Europe. This would be an unlikely guess for a business person from Silicon Valley, London or Tel Aviv. In our view, by the end of this decade, the global start-up scene will undergo massive transformation and will create unprecedented opportunities for those who have the focus on seizing the future regardless of past limitations. With that in mind, our groups’ vision is to maximise our footprint to be leaders in our chosen domains and market space.
Startups are rapidly transforming our world. Unlike any other time in history, they are proving to be the agents of this positive evolution and leading the growth of digital economies and disrupting existing paradigms. The entrepreneurs who are the founder(s) of these startups are the emerging leaders of this world who create economic transformation and growth. So how do you create an environment that inspires and unleashes this potential entrepreneurial talent and create an ecosystem that replicates a Silicon Valley mentality?
In our research to the question of “What is required to create a best-of-kind start-up environment?” we came across what is a relatively simple model based on the idea that successful entrepreneurial ecosystems have three key characteristics.
They are as follows:
- Capital. By definition, no new business can be launched without money and relevant infrastructures (which consist of a value-creation capital tied up in mostly illiquid tangible assets over a medium to more extended term period);
- Know-how. You need entrepreneurs, engineers, developers, designers, salespeople: all those whose skills are necessary for launching and growing innovative businesses.
- Rebellion. An entrepreneur always challenges the status quo. If they wanted to play by the book, they would innovate within big, established companies, where they would be better paid and would have access to more resources. Instead, they chose to make a stand and disrupt or optimise what currently is the existing paradigm.
Capital + know-how + rebellion = entrepreneurial economy.
When viewed in this way, Silicon Valley is the most obvious example of this. Capital initially came from the Department of Defence, then from early venture capital funds and now from more traditional investors such as Goldman Sachs. Know-how was present from the late 1940s on, thanks to the attraction of engineers in the field of microwaves and then semiconductors. Finally, rebellion is a mindset that is typical in California. Many rebels have gravitated to the area, from the first motorcycle clubs to artists, hippies, student leaders, LSD advocates, gay activists, Ronald Reagan, the personal development and new-age movement and of course computer scientists. The Valley is the byproduct of those three ingredients mixed together.
So how do we try and replicate Silicon Valleys recipe for success? Marc Andreessen, founding partner of Andreessen Horowitz, a leading Silicon Valley VC firm argues “We don’t want 50 Silicon Valley clones trying to do exactly what it does, instead we need to have 50 different types of Silicon Valleys taking a leadership position in a particular domain, such as Bitcoin Valley, Drone Valley or Stem Cell Valley or driverless Car Valley.” He makes the point that policymakers shouldn’t be trying to copy Silicon Valley. Instead, they should be figuring out what domain is (or could be) specific to their country or region that they can dominate — and then removing the regulatory hurdles for that particular domain.
C2 Capitals’ start-up platform will address what we believe to be our city, state and country’s challenges in optimising the three elements for developing a thriving start-up ecosystem and ways of breaking through these barriers to create a world-leading entrepreneurial epicentre.
