July’s Global Innovation Summit (GIS) in Silicon Valley brought together 400 people to share ideas and on what makes a good startup ecosystem. After much debate, shareholders determined that there’s no single solution. However, there are several tactics that may work to replicate Silicon Valley's success anywhere:
- Persevere. Facebook CEO Mark Zuckerberg’s
first venture went from a student startup to a $100billon IPO in 8
years. But a typical profile for a successful entrepreneur is more
likely to include a number of ventures that didn’t quite work out.
Ultimately, what makes them succeed is their endurance and the
willingness to try and try again.
- Collaboration is king.Successful innovators
know that sharing ideas makes their company stronger, not weaker.
Sharing ideas and best practices makes things better for everyone,
and ecosystems that are built on a culture of collaborating produce
more successful startups.
- Choose venture capitalists that can be more than an
ATM. In Silicon Valley, entrepreneurs talk about
"dumb money" and "smart money." "Dumb money" is cash from someone
who can’t help in any other way. "Smart money" is cash from someone
who can also provide valuable advice, connections, assistance,
press, or introductions. Good VCs do this for their portfolio
companies, and great VCs do this for the entire ecosystem.
- Connections, connections,
connections. Successful ecosystems are filled with
people endlessly networking and sharing their networks with each
another; some people even compete in their ability to help others.
Competition might not be necessary, but it's important to cultivate
a sense of generosity.
- It’s not about the tax breaks. Some
governments around the world focus on tax breaks to stimulate
innovation. But Silicon Valley has some of the highest living costs
and worst tax regimes in the world. And yet, startups live and
thrive there. Tax breaks alone won’t do much to build an
- Government should invest in demand, not
ventures. Investing in companies that don’t have a
market is setting them up for failure. By investing in market
development and driving demand, governments can play a key role in
supporting entrepreneurs without backing ventures that don’t have
the right fit.
- Foster mentorship. Good mentors and good
role models make good ecosystems. Mentors guide and advise
startups, but also get startups their customers and partners.
- Involve your customers and stakeholders in early
stages. Whether you are designing a prosthetic leg
for the wounded, a new tech incubator, or a location-based app, the
best designs are ones that go to the customer to understand their
needs, processes, and daily lives very early on.
- Capital is overrated.The real drivers of success are strong teams and good market fit- not how much money a company is able to raise. The focus should always be on getting the basics right, on making sure your team has the right skills to deliver, and on getting your product out there.