Starting up a business has its own unique set of rules. Starting up a business in Silicon Valley is different from anywhere else on the planet. Here I explore some specific difference between Europe and Silicon Valley start-ups based upon a variety of entrepreneurs insights and learnings.
Innovation in Silicon Valley is the intersection of invention (idea, process, technology, IP) with commercialization (use, adoption, employment). Around the globe everyone thinks that Silicon Valley is all about technology but the reality is that innovation can come from anywhere and technology is an enabler.
In Europe start-ups are very business and cash-flow focused. In Silicon Valley start-ups are very customer and scale-up focused.
- European start-ups are offer-driven (product and service) *versus* Silicon Valley innovation-driven enterprises.
- European start-ups are driven to achieve steady cash flow as quickly as possible *versus* Silicon Valley drive to invest for faster growth.
- A European start-up will accept a customer, even if the customer does not fit the focus of their business, *versus* Silicon Valley will hold fast to their business vision and not dilute or distract their focus.
- The initial goal of a European start-up is for financial independence *versus* the initial goal of a Silicon Valley innovation enterprise to build and test their business model.
- European companies will often have multi-person management boards *versus* the US mindset that “only one person can be president.”
There is a different mindset, not necessarily a different skill set at play. Steve Jobs exemplifies the Silicon Valley mindset, “it’s more fun to be a pirate than to join the Navy.”
- EU defines “customer” as anyone with money *versus* SiV focus on the definition of buyer attributes.
- EU asks the customer what they will buy *versus* SiV asking “what can I do for the customer?”
- EU outlines the sales process *versus* SiV wanting to know the customer buying process.
- EU business grows *versus* SiV planning for scale up.
- Mediocre products will survive in the EU *versus* SiV where competition is tough and pushes you to be the very best.
- EU business success is barely noticed versus SiV business which is visible to world media.
Silicon Valley start-ups grow faster and larger than similar European start-ups because of the intense customer focus. Pay attention and build your company around seven simple customer-centric questions and your start-up will have a chance to make its mark.
- Who is the target customer (industry – market – segment – user characteristics)?
- Is the target customer accessible (directly or with partners)?
- Is the target customer well-funded with the ability to buy?
- Does the target customer have a compelling reason to buy?
- Does the target customer have a sense of urgency (pain, priority, payback)?
- Is there competition or inertia that can block you?
- Is the sales cycle fast enough to test, prove and pivot as needed?
Whether you are starting up a business here in Silicon Valley or bringing a business into the US from another country these are important differences to understand. Make smart focused choices to grow a successful business.
Thank you goes to Christian Prada (Swiss) of Coup Camp (www.coucampcom), Eric Amram (French) CEO of Evenium (www.Evenium.com) and Wolfram Doelker (German) of WDE International, Inc. and GABA (http://www.gaba-network.org/socal) for inspiring this blog with their experience bringing European companies into the US .