Guy Kawasaki on – How to create the next Silicon Valley

Guy has come up with a great article on How to Kick Silicon Valley’s Butt. Guy’s extensive experience advising Apple’s independent software partners, and years of advising startups shines through. If only politicians would listen. Here are my favorite pointers

  • Beautiful, but not gorgeous, surroundings California is beautiful. The weather is good. It s fun to live here. No matter how great an entrepreneurial environment Cleveland creates, it s always going to have people wanting to move away.
  • High housing prices. If houses are cheap, it means that young people can buy housing sooner and have kids. When they have kids, they can’t take as much risk and don’t have as much energy to start companies.
  • Cities, crowds, and high- if not over- population. The pressure of these conditions make people jealous of each other; this in turn makes them compete. Cities also bring people together to work. People can’t telecommute to a startup. People need to get together to bounce ideas off one another, argue, and cajole.
  • Absence of multi-national companies, especially the finance industry. If your companies have to compete with conglomerates or banks like Goldman, Sachs throwing money at people, it’s going to be hard to get anyone for a startup. Pity the startups in New York, London, and Singapore.
  • Focus on educating engineers.The most important thing you can do is establish a world-class school of engineering. Engineering schools beget engineers. Engineers beget ideas. And ideas beget companies. End of discussion.
    If I had to point to the single biggest reason for Silicon Valley’s existence, it would be Stanford University—specifically, the School of Engineering. Business schools are not of primary importance because MBAs seldom sit around discussing how to change the world with great products. Mostly they care about how to get interviews at multi-nationals and consulting firms.
  • Send the best and brightest to Silicon Valley. I can hear the complaints already: “This will lead to a brain drain which is exactly what we are trying to prevent.” This attitude misses the essence of entrepreneurship: it’s not about preventing bad things, but fostering good things.
    The goal is to infect them with the disease called entrepreneurship and show them that there can be more to life than “a job;”. Sure, some people will never return—like me. But those who do return come back with a much broader perspective on what life and a career can be. Maybe they will build another Silicon Valley because they’ve seen it done before. Here’s a dirty little secret: Silicon Valley is more a state of mind than a physical location, and you can’t alter a state of mind by staying a home.
  • Celebrate your heroes.Every region needs its heroes. These folks take role modeling to an extreme; they have names like Steve Jobs, Bill Gates, Ted Turner, Steve Case, Anita Roddick, and Oprah Winfrey. Kids need heroes, so that they can say, “When I grow up, I am going to be the next Steve Jobs.” In many places, a successful person is pulled back down because of jealousy. Sure, there’s jealousy in Silicon Valley, but our way of dealing with it is to try to outdo the person, not pull her back down.


  • The short answer is that the government should not do much except provide more funding to the engineering schools.Unfortunately, that probably won’t seem like enough to most people.
  • Dont create a venture capital fund. The thinking here is that a government created venture capital fund would kickstart entrepreneurship because of the influx of money. However, if there’s one thing you can depend on in venture capitalists, it’s greed. If you show them good engineers with good ideas for good companies, they will appear by (private) plane, canoe, dogsled, and camel. Such a region doesn’t need to create a fund. A supply of capital does not create demand from entrepreneurs–at least not the kind of entrepreneurs that you want.

Guy has definately burnt his bridges with European politicians. Most European politicians know that you cannot delegate entrepreneurship and economic growth to the market and the masses. All you get is creative destruction, market disruption, and upset all the old encumbent monopolies. You bad boy !
Jacques Chirac, the french president, is so upset with these Google upstarts, his government is funding a French alternative. The state knows best.
A case in point are the entrepreneurs that have been successful in continental Europe. Disrespectful, unpredictable, and irreverent. Why do these individuals always try to beat “The System”?. How is a career politician supposed to work with individuals so outside the established network. They don’t even wear suit and tie!
Joking aside, the proportion of successful EU entrepreneurs that secured their funding from US and UK sources rather than EU sources is sadly high. Obviously, there is nothing quite like greedy money.
Guys definately pulled his punches on labour laws. Mr Paul Graham seriously let rip on the need for labour flexibility at the recent Amsterdam XTech conference. Not a popular view in France.
Guy has my vote for EU president.

All Strategy and No Tactics

entrepreneur sethgodin innovation

Two of my favorite thinkers, Richard Feynman and Seth Godin in the the same blog entry. How about that ? I have Seth’s The Big Moo and Richard’s Surely You’re Joking Mr Feynman on the same bookshelf. One is nobel laureate physicists, the other a marketing guru. What can these guys have in common ?
Seth is quoting one of Richard’s more serious stories, about not fooling yourself and always looking for the truth about why things work. Do not just copy what is the fashion of the day. Clearly they are both conceptual fanatics. Always looking at the concepts and fundamentals of why things work (or don’t work).
On a few occasions I have been asked what makes a good entrepreneur and innovator. Being an Oxford PhD, I like thinking that understanding why things work, being conceptual, is a must. Never copy a marketing design or business model unless you have understood why its going to work for you. Right ? Maybe not.
One of my partners often tells me “Who cares why its selling, lets just copy it and we will learn a lesson if we flop”. And he has a track record you do not argue with.
As I see it, a good entrepreneur is often just perceptual. Reacting to, adapting and copying things he sees in the market. By the time a deep thinker has finished strategizing and working out the market landscape, an impulsive copier has tied up the market. Sometimes you just have to copy and work it out afterwards.

Contrarian attitude in Venture Investment

contrarian vc

Good post by Fred, on turnarounds and dark times in VC investments. I would say, in the best contrarian spirit, the best investments are made during the darkest times, when all you see are smouldering ashes of a business model.
It takes true vision and trust in fundamentals to go against everybody’s advice to give up. Or, as with many entrepreneurs, it takes a contrarian pig-headedness that relishes going against the mainstream trend. The trickiest part of bucking the trend, however, is timing. And that is when you need luck.

Entrepreneur Lifestyle


Good post from Rajesh Jain, India’s premier entrepreneur
Talk of Blue Oceans and Black Swans an Entrepreneurs Lifestyle

As an entrepreneur, I have always bet on futuristic ideas. Most of the times they have not worked out. But that hasn’t stopped me from making the bets. That is the only way I know how to create new businesses. Until recently, I did not have a name for it. Now, I can term it as blue ocean strategy. The theory is easy to understand, but building a blue ocean business is tough. When one is trying to create a future that doesn’t exist, skeptics abound. This is where an entrepreneur has to keep the faith. There will be many testing moments through the venture the entrepreneur has to face up to them with confidence.
Till a venture takes off, it requires immense belief in the vision to live through the daily challenges. And if a venture is not taking off, it requires great courage to accept failure and move on in life. Either way, the entrepreneur’s life is about making difficult decisions and walking an often lonesome path.
This is not easy. Most of the time, I end up losing money. These are relatively small amounts of money I do not make bets which can wipe me out financially. I believe in making a few bets on what tomorrow’s world will be and hope that the companies I am involved in can execute well enough to not just make that future a reality but also be big winners. I didn’t have a name for this approach till I read Nassim Taleb’s book, “Fooled by Randomness”, And then a phrase came to me – I am a black swan entrepreneur.
Just like Nassim Taleb, who bets on extreme events as part of his investment strategy, I am betting on extreme ventures. These ventures are not about incremental change, they are about disruptive innovation. And as we were told again and again, most new ventures and products fail. But a few do succeed. Just because many new initiatives may have failed in the past, it does not mean that the next initiative will also meet the same fate. This is similar to seeing white swans. Just because one has not seen a black swan, one cannot conclude that it does not exist.

A good description of the trial and error fundamentals of successfull entrepreneurship. Not quite the turn of phrase used by Seth Godin in Zooming. Seth runs a mile with the whole embracing uncertainty concept. But good descriptions of entrepreneurial attitude and lifestyle are hard to come by.
In fact, little is successfully taught about entrepreneurial attitude. Formal “managing innovation” courses emphasize the systematics nature of making choices, with BCG matrices and weighting functions. Little prepares an MBA graduate, bursting with enthusiasm on graduation, for the day to day life of an entrepreneur. Like a goldminer setting out for the hills, the bad times are hard, while the good times ridiculous. Total volatility. MBA graduates can rarely stomach the extreme uncertainty, in wages and career path.