By Ben Drury, Chief Strategy Officer, 7digital Group
For a long time there has been a view in some quarters of industry that if you’re an entrepreneur – particularly working in tech or digital – you have to move to Silicon Valley to be a success.. Its reputation is as the birthplace of hot new businesses and technologies and the fund raising and networking opportunities it presents are certainly now almost legendary. But is Silicon Valley really the only place for any budding technology innovator to be?
The short answer is ‘no’. There has been a huge drive to create new technology hubs around the globe over the last decade or two and this is dramatically changing the landscape for technology innovation and investment. In the UK for example, the government and leading technology businesses have invested heavily in Silicon Roundabout/Tech City, seeing it as a key industry for the future and critical to the overall growth of the country’s economy. Likewise, we’ve seen tremendous growth in new strong technology-led entrepreneurial ecosystems in places like Berlin, Tel Aviv and New York to name just a few more.
There has been considerable success too, with these new entrepreneurial enclaves driving exciting new developments and in many cases establishing themselves as world leaders within specific sectors. Today, London is arguably the world leader in Financial Technology innovation, while Scandinavia has spent the last few years cementing its place as the global leader in mobile gaming. The UK has also become a global hub of innovation for providers of B2B music download and streaming platforms – the industry we at 7digital Group play a leading role in.
These ecosystems matter. Because where a city or region has a particular strength or heritage within an industry, technology trends are likely to follow. Inventors and entrepreneurs will tap into their environments and use this to guide their development process. We’ve seen this borne out in the fact that despite its efforts, Silicon Valley has failed to create a real breakout success music technology company, Europe has produced Spotify, Soundcloud, Songkick and 7digital! Significantly, the first three of these, whilst developed in Europe, went to Silicon Valley for funding once they became really cash-hungry.
There is clearly a huge amount that can be learnt from Silicon Valley. There is no doubt that the investment climate in Europe is remains much more risk averse and conservative. To succeed in Europe, there is a need to be much more tenacious, patient and considered in your approach – something that many entrepreneurs find difficult to sustain. It could also be argued Silicon Valley culture gets a simple idea very quickly and is prepared to take a lot of risk in order to see if it works or not. In terms of ‘getting rich quick’, the case for moving to Silicon Valley remains strong. The risk is that we’ll see a drain of the best ideas from around the world to Silicon Valley if we continue to fail to support them. For all these reasons, Silicon Valley remains the biggest, but it is important to acknowledge that it is now not the only game in town.
Entrepreneurs do need to ‘follow the money’, but they should also consider what the right location for their business is in terms of existing ecosystems and what it can offer beyond just investment. The right environment, with the right culture and the right connections can be the difference between a good idea and a great business.