Jyllandsposten om Silicon Venture

Recap: The Entrepreneurial Buzzwords in The Bay Area

by Krisitan Brøndum


We are near the end of our trip to the most extreme entrepreneurial environment in the world, also called The Bay Area. It has been a great experience being here sensing what I have been reading about in books and academic papers during my studies at Aalborg University. But what have I learned about entrepreneurship and startups in the last 4 weeks, which I have not learned in my entrepreneurship program in Denmark?

Since this entry is a recap, I would like to start out by introducing the two entrepreneurial buzzwords I have heard the most out here: traction andscalability. Coincidentally, these “concepts” or words were kind of new to me but both appears to be some of the most important things to grasp when doing a startup in The Bay Area and wanting it to succeed. 

TRACTION

Firstly, traction has been named at every single event I have attended here; be it a talk at Stanford, a VC pitching event or a company visit. Generally speaking, "getting traction in the market" or "your product gaining traction" means that “your customers” is getting aware/showing interest in what you offer to them, i.e. your value proposition. So what I have learned out here is that it is important to get customers as early as possible. A better conceptual might be “early adopters”, as these adopters do not need to buy anything from you – that is not essential. Adoption is everything; you can make the smartest and most sustainable product in the world, but if nobody wants to buy it, it is not a success! So, regarding business startup you need to ask yourself: is this [read: value proposition] something someone would pay for? Is it something people would show interest in? Investors might not even consider you if cannot prove that your business idea has traction.  ¨

SCALABILITY

Scalability is another buzzword I have heard at every event in The Bay Area. Scalability of a business implies that the underlying business model offers the potential for economic growth. You need to be able to quickly extend your business into new markets and/or customer segments.  Now, out here this buzzword plays a vital role in the overall theme “entrepreneurship”, as entrepreneurship in The Bay Area is equal to funding. Bootstrapping your business is only a temporary thing - you need to have funding in order to succeed and become the next Facebook, Twitter etc. which every entrepreneur out here dreams of. Scalability and funding goes hand in hand, as VCs only want to fund businesses which are scalable, i.e. ideas that have the ability to scale. They invest in you because they want to flip over the company and get 7X or maybe even 10X in return of their initial investment. VCs will think: “how does this business turn into a billion dollar exit?” or they ask: “is this business scalable?”.    

In short, your business idea needs traction and your idea needs to be scalable, in order to raise funding – be it seed funding, angel funding or venture capital. Even though most entrepreneurs want to avoid giving up equity of their startup, out here it is the only way to go if you want to succeed. Scott Engler, CRO of Longboard Media, even stated that growing your business in a healthy way is by not taking in funding. When you take in money from the outside it becomes a little less fun, he said. However, if you are a technology company (which most of the startups in The Bay Area are) it is very hard to grow your company organically and not take funding from the outside, as technology is changing so fast.  

"Only Those Who Dare to Fail Greatly, Win Greatly"

-- by Yuval Oren

It is soon time to pack my luggage with all the new insights and inspirations i have collected in the past 4 weeks, and get back to the real life. The trick now, is to se what of all I've seen here will actually stick, and how could I implement this in my future actions.

I think that the events I've been to during the last few days in many ways sum up this experience for me. We began with an event called VC Task Force. This event was an excellent opportunity to see how entrepreneurs pitch to VCs in real life. I thought that it was very satisfying to see how the last 3 weeks have changed my mind set; I could see the exact structure the different entrepreneurs used for their pitch, noticed small "mistakes" they have done, and then heard the panel of VCs correct these exact things in their feedback. I found the VCs feedback to be especially interesting, as it opened my eyes to the exact issues they care about: e.g. amount of costumers needed to break even,  why are you uniquely suitable to run this company, how much money do you ask for, how will you use this money, present your team and so on, and so forth.

The following event was the Clean Tech Open 2011 Global Forum, in San Jose, CA. This event allowed us to enter a very special environment of entrepreneurs and investors and hear how developers of different products and services pitch their ideas and how VCs responded to that. Furthermore, this event gave us a great networking opportunity. I pitched www.fundtalent.com to many different people and companies, including the HR managers from PWC, and came back home with great feedback and a stack of business cards. The highlight of the evening for me without a doubt, was hearing the presentation of Edward Lu, former NASA Astronaut who spent 6 months in space. He brought forward NASA's innovation view - "To predict the future - invent it!".

Perhaps one of the most inspiring meetings we had during this trip was the one we had with Juha Christensen from Progression Partners - one of the founders of Progression Partners, as well as a board member and/or president in several other companies. Juha has a great knowledge base in the development of Startups. He gave us a very critical and useful point of view regarding what they look for in new startups, in order to take them on board. I have pitched www.fundtalent.com to him, and he found it very interesting. I plan to keep him in touch and try to use his advice as much as possible. I especially liked Juha's final remark: "When creating a startup, aim for big ideas. If you aim for a multi-billion exit, even if you hit around it, it will still be a success. There is no point wasting all that time on a small idea". This for me is Silicon Valley in a nutshell. I love it.

In the last few days of our stay here we tried to take all the great pieces of information we got during this trip, go out and try to process it all and come out of some take-home key points. Hiking in Yosemite Park, cruising to Alcatraz Island, and simply walking across the Golden Gate Bridge, reminds you how beautiful this area is, and how good life is here. It is my personal view that when life is good, when you are calm and happy, your mind is open to create great things. Not to counter the "Necessity is the mother of all invention" which I greatly agree with, i believe that this area is so amazing, that one simply gets in the mood to take over the world. And this leads me to my bottom line; The beautiful thing in Silicon valley is that everybody wants to take over the world, to be the best there ever was. This is done through the understanding that it is sharing rather then fighting with everybody, and hiding in your basement, that leads to the greatest of improvements. People are open to new ideas, to new people, always want to hear about a new concept, a new point of view. It is by pitching and explaining your idea a thousand times, hearing a thousand different responses and feedbacks, and pivoting the original idea again and again until it is perfect - which leads to truly inventive ideas, and to success. Be all you can be.

iPivot

- by Johan Stockmarr

We are now close to the ending of our trip and this is my personal sum up of how my initial Business idea have changed (Pivoted) during my stay in San Francisco and what I have been doing.

As stated in many of the other blog posts; Lean Start-up methodology is the hype here. The central reason for its popularity are in my opinion related to fact that the business around Venture Capital (VC) funding have changed. It seems that the classic VC funding of small promising start ups have broken and are now focused more on small companies that are all ready ”making it” and needs capital to scale their business. In this environment, concepts like Lean Start-up is a popular and applicable method to for start-up companies to ”Bootstrap” there business – getting started without funding.

The main concept of Lean Start-up is to go out an test your business idea and your related assumptions about your marked – what the customers want. As you test your assumptions a find discrepancies you change your business model to fit your findings – lowering the risk of product failure. Every time you change the business model due to new test findings you 'Pivot' your Business model. This is the general concept of Lean Start-up and has been the methodology that I have used to test my own Business Idea; The Edition.

My original idea – before going to San Francisco

The Edition was to make multiple mobile applications that provided users with information about a specific niche environment of Copenhagen Night-life – places, events and users of the environment. Whether it was Tango music, Jazz, Techno-clubbing and so on, users could get access to this information through a small fee, buying the mobile application.  

Experiences, Findings and testing in San Francisco

After meeting many entrepreneurs the start-up companies during the first three weeks, it has become clear to me that my original business model; making people pay for every new mobile application, would not work. A more precise strategy on how to get people to use my product was necessary. 

During the first day San Francisco I found the company Yelp that was already doing something similar to what I was working on. I was not the same product – but had many similarities. Yelp does not operate in Denmark and had never hear of it. Yelp is a web and  mobile platform that encourage people to rate local business and services, so that people can make a choice on behalf of others perception and experience. I want to do the same, but be more narrow in my scope and focus on real-time information – what goes on here-and-now around you.

Because of the many similarities I decided to make a personal study of Yelp – how did they engage people to rate local businesses, how did they engage local business owners, what was the business model and how did people actually use the application and for what:

1)    I started my research by finding every interview and news spot I could get my hands on. This gave me some insight on the history of how they build the company and what strategies they had used. I also had some good talksith Torsten Kolind from YouNoodle about the project. He had been working on a similar idea many years ago – gave me some great inspiration and things to consider – how to do that extra little thing that brings customers more value, than you put into it. He also new some of the original start-up team members of Yelp and gave me some insights into their initial strategy in getting people to use the service. The created a team of early vangelists and nurtured them to help building up the database with recommendation.

2)    I wanted to know how people used Yelp. So I started to use the program myself and go out on café's and into stores – asking customers if they used Yelp, how they used Yelp and why they used Yelp. As a reversed Dane this was quite wird to do at first. But I got use to it and got some very interesting insights. Insights that made me change my original assumption on how people use these kind of services and what risk that comes along when letting people in power of the content. To my surprise many people used the web application of Yelp on there mobile, because they searched businesses through Google and found the Yelp business profile in the search result. This made me think – because I originally did not plan to make a web application of the product. But now it seems that this would be a mistake. The most important finding though, is that the user is not willing to pay for this service, if it is to generate user-recommendations. So now I am working on a different business model that has to do with ticket sales and advertising.

3)    After starting my research I have been working on developing my pitching skills – every time you find something new, you start to see you product in a new light, forcing you to change you pitch. This has been very healthy and made my business idea more and more clear, even thought more knowledge brings more unanswered questions too. I view it as a healthy sign of getting closer to something useful.

The Present Idea

Too structure all this new information, I have started to use the Lean Canvas as a way of structuring my present view of the business, based on the findings I constantly get:

I'm very pleased with this opportunity of going to San Francisco and the experience of the business environment in Silicon Valley. It is definitely not the last time I have been here. As Danes we can learn a lot from this place when it comes to entrepreneurship. But I think it is important to emphasis the fact that it is a culture and mentality and not just a model or busniess cluster that makes this place special. If we strive for this environment in Denmark I'm convinced that facilitating and promoting entrepreneurship early on in the education system is the essences and central strategy for being successful in this goal.

I hope to be able to give share, by creating a new way of discovering the many amazing events and places Copenhagen night-life has to offer – bringing together local artist, businesses and you.

Reflections on three weeks in the valley

- Johan-Ulrik Lervang

So after three weeks in the valley I have learned quite a few things. One - three or four weeks will never be enough time to network in place like this. Although my "colleagues" might not agree, the only one actually having traction in regards to his business idea has been Steven. Steven has had the advantage of having friends living here prior to coming and therefore being able to leverage their networks. That being said, it has in no way been a waste of time for the rest of us. Seeing how networking occurs here raises quite a few questions - especially as Danes. This leads to my second point.

Networking in Silcon Valley at least seems to have people divided into two categories.  On one hand we have the people too busy to interact with people not within their area of expertise for more than 20 seconds and on the other hand we have people wanting to network, hoping that other things might be brought to the table. I am sure that all the us, the participating students, have experienced people coming up to us, sounding genially interested in knowing more about us only to walk away within a minute - as a Dane that comes off quite rude, but it is the rules of the game here. At the same time we have also experienced the other version. Last Thursday after having visited Progression Partners in Palo Alto - Yuval, Johan, Jakub and I went to visit a two women company called Panafold. Johan had befriended one of the two founders at an investors pitch event earlier that week. After having played around a bit with their application allowing Panafold to record our feedback and how we interacted with their application we sat down to talk about we had been so far and our ideas. Now these two women knew a lot of professors around the US, especially who to talk to even though our ideas ranged from employer branding to image recognition software.

Now I have since asked myself what I think about these two ways of networking. First of all both types network with the sole goal of obtaining access to the other persons network - in my mind a very shallow way of interacting with people. That being said I see reasoning behind both types. Going in depth with multiple people is time consuming and if you are on a mission and need to meet the right people now, it is likely not the way to go. On the other hand pursuing the right person now also means that you could cut yourself off from befriending the person, who himself might not be interesting, but knows the right people. Especially at these meet-ups this would appear to be an extremely fatal networking strategy as people do vastly different things.

In the end there is definitely a cultural difference. In Denmark we like to get to know a person before we introduce them to our network - here you don't. We've been told several times that we need to improve our ability to cut people off introducing their idea by simply leaving. I must say that I often find people's ideas interesting and inspiring and be honest I like to give people feedback on their ideas - at least when I am able to comprehend them. Deep down I am probably too Danish for this game because in the end I just want us all to be friends.

No fear necessary - A guidebook in failing for Europeans

- by Jakub Bares


My definition of entrepreneurship is “Asking smart questions and finding most relevant answers”.
The bigger variety of sources and points of view the better. 
In a sense, your own opinion doesn't matter, because it moves faster than a river. What matters is how you fin relevant points of view for the given problem you are trying to solve at the given time.
As result, the mind of an entrepreneur is a mosaic of interchangeable parts - each reflecting nothing more than the current best point of view.


POV 1:  Failure vs. Collapse - The truth about innovation

Most ideas are bad!.  9 out of 10 startups fail.

The other side of the coin is that US job growth is “entirely run” by startups  Study named “The Importance of Startups in Job Creation and Job Destruction” states that between 1977 and 2005, existing firms are net job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, new firms add an average of 3 million jobs,

See these articles:
Something is happening here.
Big Shift - Why it Matters
The Power of Pull, How Small Moves, Smartly Made Can Set Big Things in Motion


POV 2: How do you fail and win at the same time? 


"My willingness to fail, gives me ability to succeed" 
- Vinad Khosla




Problem = Opportunity


Wrong is necessary to understand right.


“If you haven`t failed before, VCs wont trust you have enough experience”
- Manu Kumar (K9 Ventures

The most important thing you can lose is time.




“Don`t even doubt it, your idea sucks, now go do it anyway”  

POV 3: Learning to swim 

 “Entrepreneurship is the management discipline that deals with situations of high uncertainty”
- Eric Ries 

“The goal cannot be reduction of uncertainty, but to build capacity to live creatively within uncertainty”
-  Tim Kastelle

Definition of entrepreneurship: “Insane perseverance in the face of complete resistance”


POV 4: Vision

“The entrepreneurs who make it, are focused on the vision and have unreasonable expectations that the world will be as they see it…


The key is that they see a world that is different from the world they live in now. That gets them through any the obstacle” Frank Chen (Andreessen Horowitz)

Getting around

- by Stephen Gregory Lutsch

Wednesday Nov 9^th:

Today was interesting. I was able to make a few meetings and connections within the energy industry here in California. Setup a meeting with a friend of a friend for tomorrow. She has been working for the big utility provider PG&E for years and now just moved into an energy consulting position. I look forward to picking her mind and getting a better idea of how utilities work and perceive the renewable market. Also, to find out how we might partner with them instead of compete against them.

Then in the evening I met up with Magnus and Lasse from the Innovation Center Denmark to attend the Yammer tour event. Yammer is a 3 year old company that develops social networks for enterprise customers internally and externally. I must say the 3 hours of presentations were INCREDIBLY underwhelming! 

I mean wow. How can a three year old startup be SO boring and excited about mundane features. They announced the release of a news ticker (like Facebook), a watered down wiki system called "pages" (I believe) and collaborative same time editing for the pages (pretty useless). I am impressed at how boring and corporate a 3 year old startup can sound. 

Oh and not only were the features more than a little weak they were suppose to be demoing them. However the CEO simply played a pre-recorded video and talked about it! What is that all about. Not a little embarrassing to "demo" live features but not do a live demo for the audience during your big launch. They should keep that in mind next time.

So I am thinking "wow, you have to be kidding" and that I could not possible be the only one thinking how unimpressive this was, but no. I look around to see basically the whole room nodding in agreement and smiling! I must have missed something. I've worked in IT for over 7 years administering systems like this and network infrastructure so I HOPE the big deal is not what they talked about but rather the enterprise AD integration and auditing tools. I hope!

Oh and the company recently received 50 million dollars…yes $50,000,000 for this product. I guess if you say social media and app you get at least 20. I seriously do not understand but I am also not one of their high paying customers. 

Ok. Enough ranting and criticizing yammer. They are obviously doing something right. Besides that was just the first part of the evening. I have to give them two thumbs up for throwing a decent party afterwards. Good food and open bar plus some odd things (see photos) made for an entertaining rest of the evening. We Yammed it up the rest of the evening…we used verb variation of Yammer all evening. :)

Some pics from the night:

Thursday Nov. 10^th:

A good day today. I met up with Niki, whom I was introduced to through two good friends here in the bay area. She has worked in with PG&E for years and had tons of good advice. I meet her for lunch and she answered lots of questions but as the same time made me realize just how little i know about the energy industry. I have a ton more to learn if I want to build a business within this market. She also connected me with a Berkeley professor that has been working a ton on miro-grids here in the USA and China. I will meet him next week Thursday. 

It is crazy how quickly you can get in contact with people out here and the general attitude is very conducive to this. If you show a little interest and are not a jerk then people want to help and will often go out of their way. It does not feel like "networking" so much as meeting really interesting people that you want to know better.

Then it was such a gorgeous day I walked around a bit and snapped a few tourist pictures. Below.

In the evening I met Magnus from the Innovation Center Denmark and we took the  Bay Area Rapid Transit (BART) to Berkeley for a panel discussion on clean tech entrepreneurship. Unfortunately, due to some protests or riots in Oakland our train was delayed. This meant a very crowded, warm slow train that put us at the discussion a little late. However we were not the only ones so I do not think we missed much. The three companies represented were working with printing rechargeable batteries Imprint Energy, Tenrehte, and Primus Power. Primus Power has generated lots of startup capital by applying and receiving grants. This strategy should not be overlooked when developing a clean tech business or research based company. Lots of government money out there.

After we grabbed some local and very unhealthy american food. Way too much of it. We definitely are still used to Danish prices and quantity served. There also happened to be an Oakland vs San Diego football game on so the bar was enthusiastic to say the least.

During this trip I have definitely seen how important building, maintaining and expanding a strong network of smart people can benefit you and them. Also, the importance of gaining traction with customers and revenue is so important before pitching to investors. Another key is the ability to "pivot". This could be related to my class in getting to plan "B". Your original plan is simply a set of assumptions and through customer validation you alter your business plan until eventually you, hopefully, get to a successful version. The idea is to go through these "pivots" quickly and cheaply to reduce your burn rate.

The “secret sauce” of entrepreneurship in The Bay Area: Networking

- by Kristian Brøndum

So I have been around the innovative hotspot Silicon Valley and the entrepreneurial city of San Francisco for two weeks now. My schedule has been booked with events, company visits, visits to co-working spaces, pitching sessions and academic talks by inspiring entrepreneurs and they all seem to have one thing in common: the ability to network. But how do you network and what does it take to be good at it? Here are some lessons I’ve learned about networking and why it is so important to master this discipline, if you want to succeed as an entrepreneur, particularly in the Bay Area.

WHY NETWORK?  

First of all: networking is not a new phenomenon, but for me as a Dane coming here and experiencing the importance of it, has benefited me a lot in many ways. I would regard it as some sort of tacit knowledge, which you cannot read about or study – you simply have to experience it and learn it by doing.

Networking is about social skills; starting a conversation (in most cases to complete strangers), be open minded, ask questions, show interest in the one you are talking to, do “micro pitching” about yourself, your interest and business idea(s) and most importantly, master the ability to end a conversation. The last part is often said to be a problem for Europeans and Danes especially. But, there is no way out of it – you need to end the conversation, because you have to move on to the next person since every single individual can introduce you to a lot of interesting people. You will never know who you can get introduced to. Therefore, you have to meet a whole bunch of different people, who might give you advice, or introduce you to a potential mentor, customer or investor. This is important, because there are a lot more aspiring entrepreneurs in this area, a lot more start-ups present and starting up and the density of investors is higher, so getting in contact with the “right” people is much more difficult than in Denmark, simply because the concentration of “agents” in this particular field is higher. So, the importance of networking and being good at it seems to be much more vital out here, compared to Denmark. 

REAL TIME EXPERIENCE

Let me give you an example: last Thursday I went to a local bar to get some dinner and a beer with one of the follow participants in the program. At the bar, I started a conversation with a girl and told her that we were here because we won an entrepreneurial contest in Denmark. It turned out that this girl was an entrepreneur herself and she had a Danish partner as well. She suggested that I should add her on Facebook and Linkedin (that is the way it is done here). The next day I got an invite to a “party” via Facebook, which she hosted – even though we only talked together in 5 minutes. At Saturday we attended this “party”, which turned out to be more like a private networking event with numerous entrepreneurs and MBA students, whom we got in contact with and they introduced us to some other interesting people. So, it all started in a bar with a 5 minutes conversation Thursday evening and we ended up with rewarding contacts to individuals who were willing to help us, just 2 days later. 

PUTTING THINGS IN PERSPECTIVE

Your ability to network (get introduced to other people, e.g. others than the initial individual) and the ability to get people on board and believe in you, are necessary in order to make it as an entrepreneur. You need to gather a team, which investors believe in and want to invest in, because a great business idea is not enough to raise funding; the team is the most important thing. So, as an entrepreneur, you need to master the ability to convince people, for example external individuals, and get them to believe in you. Generally speaking, entrepreneurship is about people; individuals who interact. Consequently, trust and credibility are highly important in this interaction. In order to do so, you also need the social skills described above. Being a good networker with the essential and required social skills definitely helps you along the way.

The real deal

- by Johan-Ulrik Lervang

So the last couple of days have been quite something else. On Saturday Peter and I went to Stanford University to look around. While standing at the train station, a woman comes up to us and asked if we were Danish - color us surprised, but what are the odds of an American woman coming up to us and asking that?! in any case we spoke all the way from San Francisco to Stanford and exchanged numbers - so now we got a local showing us the ropes.

Anyhow, once at Stanford we went to see the Stanford Hospital, having heard it in itself was almost an attraction. Coming up to the Emergency entrance we were somewhat baffled by the fact that it had a red carpet and valets. We also spoke with one of the physicians at the Emergency Ward who told us, that of the six tending physicians at the ward, four of them were VCs within Emergency Medicine.  The trip not only gave us an insight into the American culture when it comes to talking to complete strangers and how private hospitals work compared to back in Denmark, but also how much the Silicon Valley set-up is ingrained in the regional educational institutions.

On Tuesday we all went to the Innovation Center Denmark offices in Palo Alto to participate in a networking event and to experience two speakers. Now one of these speakers was Saul Griffith, the found of Otherlab. Saul come into the room, wearing overalls and being totally confused, but once he started speaking we knew why. This guy was and is beyond any doubt the real deal. He was a physics PhD and started projects like you would not believe. Currently Otherlab is working on revolutionary projects within everything from solar and wind energy to education and prostheses. The guys at Otherlab are also faced with the downside of the workings of Silicon Valley. The capital in the Valley works put in a simple way, very dysfunctional at times. On one hand they are very strongly focused on the customer in the development phase as well as on projects with a short development cycle. This means that people looking for funding with truly revolutionary ideas are in quite a tight spot - especially companies like Otherlab that is doing projects with a 5-10 year development outlook and in need of high capital investment to truly make it. All in all, Saul was truly inspiring and hopefully we will get the chance to come and see what they do in person, before we leave for Denmark.

A Danish Footprint in the Valley

On Wedensday we went to San José to visit the company Asetek. For those of you that does not know Asetek (and I am guessing quite a few), Asetek is the world's leading manufacturer of water-cooling for PCs as well as being a Danish company. They were founded by André Sloth Eriksen, a former Aalborg University alumni, and moved to the US a couple of years ago. Today they have their sales & marketing in San José, their development in Brønderslev in Northern Jutland and their production in China. While not very theoretical, André without a doubt gave us the most useful insight to Valley of all the places we have been to so far. His experience in gathering venture capital and how to maneuver in the system that is Silicon Valley, was very inspiring. Should Aalborg University ever chose to do keynote speakers like Stanford and Bases do, I will strongly recommend them to hire André to do the show he gave us.

Following the meeting at Asetek we went to Stanford to listen to one of the founders of Method, Adam Lowry. Under the rule to fight dirty they have created quite a niche for themselves. One thing is for sure - they rock the marketing space. Their ads and design were hilarious and quite something else.

Rap up

Time flies these days. Looking back on the last two weeks I must admit the business plan has grinded to a complete halt. While the Bay area definitely brings a lot to the table, it is also not the time to develop the plan much further. To acquire funding in Silicon Valley you need several things, amongst others:

a) Proof of Traction (proof that someone will buy it - letter of intent stating intention of purchase, existing customers etc)

b) Flipping the company (moving the company to the US or at least creating a Delaware holding company - VCs are not fond of getting intertwined with pesky European law unless they are investing in a proven company)

Starting the company, developing a prototype and then coming here, would be the right course of action - the ability to bootstrap (grow organically etc without giving up equity) within health science equipment is significantly higher in Europe compared to the US and bedding the VCs too early might only kill an eventual company. On the other hand I've accumulated so much experience and insight from this place to inspire me for a lifetime.

Discovering Technological Intelligence (TI) in Silicon Valley

- by Peter Thomsen

Time to recap the second week in the entrepreneurial mecca of the US. After a productive first week with an almost completely packed schedule it was now the time for us to take lead and individually decide how we could develop our business idea further. But where to start? Now, before I boarded the plane in Copenhagen I spent some time reading and studying “technology intelligence systems” for the two main reasons: I was aware of the enormous geographically proportion of Silicon Valley and that I wanted to find a potential business partner/supplier.

Technology Intelligence (TI) is an activity that enables companies to identify the technological opportunities and threats that could affect the future growth and survival of their business. It aims to capture and disseminate the technological information needed for strategic planning and decision-making. As technology life cycles shorten and business become more globalized having effective TI capabilities is becoming increasingly important. In the execution phase TI is closely linked to technology scouting which is basically a systematic approach by companies whereby they assign part of their staff or employ external consultants to gather information in the field of science and technology and through which they facilitate or execute technology sourcing. Technology scouting is either directed at a specific technological area or undirected, identifying relevant developments in technological white spaces. Technology scouting relies on formal and informal information sources, including the personal networks of the scouts.

Personally I see TI this as an extremely important tool whenever managing a start-up business simply because speed is so very important. As a typical entrepreneur you will never be financial competitive with larger corporations, but because of the size of your business you have the ability to become more agile through flexibility and quick decision-making. I believe systemic TI allows you to eventually cut some tricky corners in the product development phase, by discovering skilled subcontractors and/or business partners.

Well one thing is theory… another is reality. Obviously I didn’t expect TI or technology scouting to be easy to execute during my stay here in Silicon Valley, because where would I start? And who should I talk to? However reality turned out to be quite different. Networking here in the Bay Area is extremely efficient and I have already made some contacts, which allows me be updated technology wise even when get back home to Denmark. People are generally very open-minded and interested in helping you – or at least they might know someone who can help you. I am now beginning to understand why thing move faster over here simply because of networking. Thereby not stating networking to be the only catalyst for progression, but only how much better I believe it works here compared to Denmark

I might not find an actual business partner over here, but already I have made some connections, which can function somewhat like scouts within my business area in Silicon Valley. So when I get back home I will therefore still be able monitor some of what is going on in Silicon Valley. Hopefully over time this will provide knowledge regarding either competition or maybe even business partners.

  

The next step

- by Yuval Oren 

The second week in Silicon Valley has taken us to the next step in our research of the entrepreneurial environment of Silicon Valley and the San Francisco Bay Area. This week we got the opportunity to move away from the theoretical background we built so far, and speak to real entrepreneurs, people who are working in the area day-in and day-out, know exactly how it works, and are creating great success.

We had an inspirational presentation by Saul Griffith, PhD & Founder of Otherlab. Saul is an engineer by education, who has a very genuine view of entrepreneurship in general, and in Silicon Valley specifically. See him as a Ted speaker here or here. Saul has founded multiple startups in the area, including one that wishes to produce wind energy using autonomous flights, which will produce more energy, and with significantly lower investment then a regular wind turbine, you can se the prototype here, 

In my opinion the most interesting thing about Saul, was his point of view over the way the western world uses his money, saying that we invest hundreds on millions of dollars in websites and mobile applications such as Facebook, or Zynga, and instead of things that are truly important of our existence, such as finding another source of energy which will be efficient enough to cover for the traditional fossil fuels we currently use. Mr Griffith is an untraditional character, who tries to focus on what really important, be it clean energy, or his fascination with robots, and their applicability in helping paraplegic people walk again, and not on lesser things like what VCs think, or what to wear (see picture bellow).

Another very interesting meeting was our meeting with André Sloth Eriksen, founder of Asetek. Taking his company from Jutland, Denmark, to San Jose, California, Andre has a very hands-on, no-bullshit approach to life as an entrepreneur, a CEO of a startup, and life in the bay area in general. Andre gave us a very inspiring presentation of his view on what's really important to focus at when you try to push your good idea, into a successful and profitable venture. The team you choose to help you in the development process of your product or service holds a very important position in his view. He has also introduced us to the fact that being an entrepreneur is not just a rose garden, it is a process which includes also difficult times, and tough decisions, many of them relate directly back the choices you made when you were building your team. Entrepreneurs need to develop elephant skin, in order to deal with the pressures from investors, costumers and employees, especially during less good times,  in order to stay on your feet, and push yourself back up to achieving your true  potential.

Meetings with these guys which talk to you on eye-level, not with theories, but in a ver matter-of-fact way, give in my opinion the best insight into entrepreneurship, and the day to day life of a founder of a small company. I think that theory can take you only so far, and from that point on it is all about going in there, and do it for yourself, and this, in a nut shell, is the reason we are all here in Silicon Valley to begin with - getting first-hand knowledge, the kind you simply cannot find in a classroom.

Logging in! - What makes this place so special?

By Johan Stockmarr


Normally I really hate Mondays, but i have to admit waking up in this sunny and inspiring environment of downtown San Francisco, only 40 km from Silicon Valley, surely does make a difference. Beside having been through an amazing first week program, set up by Lasse and Marie from Innovation Center Denmark, I last Monday got the opportunity to attend a session in the lecture series: THE PAST, PRESENT, and FUTURE OF DESIGN, at Stanford D-school with professor Barry M. Katz. The focus of this lecture was how Design Thinking had functioned as an integrated part in the development of the first personal computer - though no on called it such at that time. But the story turned out to be more than just the story of the laptop and the role of design. Clearly, the story was closely interconnected to how the eco-system of Silicon Valley had come to be what it is today. A story that in many ways summed up and connected our many impressions of the present eco-system of Silicon Valley. Personally I found that Prof. Katz characterized it very well, by describing the system as a horisontal network structure, that resembling the same structure found in Silicon Valley founding product line -  the integrated circuit board.


Silicon Valley is a huge pool of interconnected technologies that feed of each other, creating new connections, bringing forward tomorrows products. In the Silicon Valley world you find that every  company or new start up is constantly seeking to innovate and disrupt the industry they are a part of. And this is true whether it is the Semi-Conducter industy - hardware, Software Development, Design, Clean tech, E-commerce and so on. 


The whole area seems to function as multiple connected circuit boards and the output is new businesses. A contributing factor is the opportunistic mentality that flows in air. A mentality properbly connected to the area being an old golddigger area back in the Hey-days. Today people that working more than three years in the same company is a rare sight. Everybody is seeking new opportunities - wanting to become the new Facebook or Google. Whenever you go to a café you´ll find the room filled with laptops, coffee cups and hardworking people working on their new business project. People often work on multiple projects at ones - being founder of one company, software developer on another and advisor on a third. Its a very inspiring atmosphere to work in. Next time i will elaborate on my own project: The Edition. I will go into how i’m working on implementing key testing strategies from the Lean Startup as expressed by Eric Reese and Steven Gary Blank and how I’m testing my concept in San Francisco. 


See you next week...
...Standby!

An inspirational speaker

Saul Griffith, PhD & founder of Otherlab

- by Stephen Gregory Lutsch

I just have to share a super inspirational speaker from Tuesday night. His name is Saul Griffith of OtherLab. Specifically, he had spun off a company doing some game-changing wind solutions called Makani Power that are developing Airborne Wind Turbines (AWT). I don't know if you are familiar with this technology but it is incredible. The issue they are running into is funding for large scale production and global scaling. He is also working on some incredible solar efficiency concepts that they have already prototyped.

My understanding is they are stumbling on the scaling up, connecting with the right manufacturers and acquiring proper funding. Immediately Know-Who and business model innovation came to mind. It is not about the technology (which is incredible) so much as getting wide scale deployment with financial viability.

Human Capital in Silicon Valley (first impressions)

by Rasmus Thomsen

Many people perceive Silicon Valley as the center of entrepreneurship and innovation. Nations around the  world are eager to understand what is special about Silicon Valley in order to copy some aspects and implement them elsewhere. For instance, Russia is trying to build a ”Science City” in many ways similar to Silicon Valley – at least that is their goal. Other countries such as Japan, Egypt and Malaysia have already attempted to do so but with little or no success. On the other hand, countries like Taiwan, Finland and India have successfully managed to build a technology industry, however, in another way than Silicon Valley.

This raises the question about what determines success and failure for clusters like Silicon Valley.  As part of  he Silicon Venture program, I and seven others have the opportunity to experience the pace of life in the Bay Area and gain insights into the anatomy of the ecosystem. In this blog post I will describe the importance of human capital in the Bay Area based on my – non-academic – impressions during my first week here.

Talent: a scarce resource
All the companies we visited during the first week emphasized the importance of human capital. Zendesk, a Danish start-up located in San Francisco, just recently set up a new development department in Copenhagen because the firm finds it hard to attract talent in the Bay Area due to keen competition from major companies like Google and Facebook. Scott Engler, founder of Longboard Media, pointed out that because the company was founded just after the financial crisis it was much easier to attract talented people. He was sure the company would have developed very differently had it been founded today due to the growing demand for human capital. Everywhere one goes in Silicon Valley one gets the impression that scarcity of human resources is a substantial problem despite the close proximity to world leading universities that supply a lot of talent like Standford and Berkeley.

Stanford Campus

The supply of entrepreneurial talent 
One aspect is the supply and demand for talented people. Another aspect is the “supply” of entrepreneurs. According to Michael Mose Biskjær, a Danish Ph.d. student at Standford, Stanford is the best place in the world for students who want to become entrepreneurs. I got the impression that is not only about professional competences – that the whole mentality is different compared to what you see at Danish universities. Stanford is a for-profit research institution with a strong relation to private companies. For instance, professors only get paid nine months a year meaning that they have to find funding elsewhere for the remaining three months. This means that professors at Stanford, to a larger extent than their Danish colleges, have to rely on market demand. This can be both positive and negative. Stanford also has a world renowned student organization for entrepreneurship called BASES, which is able to attract famous speakers and create events that go beyond what we see  n Denmark. Funding plays a crucial role in this regard. When we talk about the “supply” of entrepreneurs it is important to stress that 52% of Silicon Valley tech companieswere founded by immigrants in the period from 1995 to 2005 (see source). This indicates that Silicon Valley has been successful in attracting talent from around the globe.

Get your haircut at Google

Working culture

We visited the Google Campus and found it to be a pretty amazing experience. The employees have access to almost everything – for free. It was even possible to get a haircut on-site. Although this undoubtedly creates a good working environment, it also indicates that Google wants its employees to stay on campus for as much time as possible. It simply removes the incentive to go home. From a company perspective this may be profitable. The human benefits may be more questionable. On the other hand, from my observations it seems like working longer hours is incorporated in Bay Area mentality.

After my first week here it is definitely my impression that talent is the most critical success factor in Silicon Valley. Although this fact my not be surprising, it has been very interesting to observe the differences in the working mentality compared to Denmark. In general, people in the Valley are to a large extent willing to provide “sweat equity” and take the necessary risk in order to be successful

Lots of Good Stuff

by Stephen Gregory Lutsch

Wow what an amazing first week. Innovation Center Denmark really outdid themselves with a fantastic program. Marie and Lasse did an incredible job! You could call it a crash course on Silicon Valley. Still fighting the almost 24 hours of jet lag from a few fog delays in Copenhagen and Zurich, we plunged right into the fast paced life here in San Francisco. There is definitely an energy here that is hard to describe. Besides this being the “center of the universe” for startups the area has tons to offer culturally. We happened to hit some gorgeous-danish-summer-like-weather so that made sight-seeing and walking to meetings an absolute joy. Highlights would have to include the visit to Google, speaker at Stanford campus by Marten Mickos and informal talk by Scott Engler of Longboard Media.

I had heard about how cool Google so I was a bit skeptical before our visit. However, I am very impressed that such a young company does so many things right. They have all the perks and seem to really invest in their most valuable resource…people. Also, the fact that they base projects on a 100 year timeframe is unheard of for a publicly held company. Apparently across the board 10% increases in salary was not enough so the CFO handed out a second bonus from his backpack. Thousand dollar bills to each employee. Crazy. That is a model for my future company. Big vision and solid follow through to make it happen.

Stanford has a pretty nice campus and that might be a bit of an understatement.  Every week they invite in a well known speaker to inspire both the audience and anyone around the world tuning in. This week’s speaker was Marten Mickos – CEO, Eucalyptus. The talk was “How to build international disruptive companies” since he was the CEO of MySql AB, the open source company that was eventually sold to Sun Microsystems for around 1 billion dollars. It was interesting how he described playing an antagonistic role with the big competitor of database products, Oracle. That they viewed themselves as David fighting Goliath. He encouraged small startups to not be afraid of “throwing rocks” at the big guys and you must get out there and “make waves”. Also, he commented that you need to have someone that really believes in you because growing a business is really hard. There is a ton of self doubt together with the struggles and successes. That makes sense to me.

Our last organized event of the week was one of the best. A very informal talk about advice on investment capital here in Silicon Valley and his insights on growing a company by bootstrapping. This was another great example of how things tend to work out here. People are very open and forthcoming. Not only when it comes to giving advice and listening to ideas/pitches but candidly explaining how they succeeded or failed. Let’s see the points that stick out for me were: start lean so you can keep things cheap, get customers and revenue/profit fast and the best time to take venture capital money is when you don’t need it. So a top trend coming out of everyone’s mouth is lean startup. A method of rapid prototyping the most basic product, getting this to customers for feedback, iterating the product until you have something customers will buy and doing all of this with as little capital as possible. Therefore, reducing your risk and burn-rate. This is a concept I am now starting to integrate into my business ideas.

Coming up is what happens here: meet-ups and networking events. These are used to gather information and get in contact with the right people. I have already had much success just talking to friends of mine here in California and mentioning a few of my ideas. Immediately, actually the day after we landed, I already met someone that was working in cleantech and energy like me and also connected me with three others. This evening we finally met through mutual friends over a beer and nerded out about the energy markets here in California while setting up a lunch date later in the week. Luckily we will able to attend the Cleantech Open 2011 Global Forum. I am really looking forward to this. I can’t wait to be informed and inspired. Off to working on the pitch and learning as much as possible.