With a name like ours, we are almost always asked ‘where is the next Silicon Valley’. People ask is it Bangalore, or is it London, Berlin, Shenzhen, Tel Aviv, or some other city. I always explain that while it was an ambition in the past of many governments around the world to create the next Silicon Valley, the phrase has now really become a metaphor for places around the world that are creating their own version of a successful innovation ecosystem designed to create economic growth and development.
We see this as we travel around the world. We are based in London and New York and can see the thriving ecosystems for specific sectors that take advantage of the cities’ natural skills base – like fintech, digital media, fashion tech and adtech. On our travels, we have witnessed the same kind of buzz in many other tech and non-tech clusters, with their own tech or industry vertical focus. Whichever city it is, whether it is in Bangalore, Toronto, Alexandria (Egypt), or Sao Paulo, there are specific national or local initiatives that have generated some kind of incentive for innovation, entrepreneurship and economic regeneration and growth.
Courtney Klein, cofounder and CEO of Seed Spot, a globally ranked incubator that focuses exclusively on supporting entrepreneurs building solutions to social problems, said in an article for the Kauffman Foundation that cities don’t just need to aspire to be like Silicon Valley, they can be better in their own way.
She says, “Being the mayor of a city is like being the CEO of a startup in a constant cycle of iteration, failure and success. Just like business leaders, mayors have to look at market trends and high impact opportunities while adapting to constant change, stakeholder pressures and unexpected crisis. Yet, any good startup CEO knows that the only way to ensure long-term success is to align unique assets with market demand.”
Klein adds, “Stop trying to become the next Silicon Valley. While Alicia Keys may be the driving voice behind the ‘do you’ mantra these days, there is truth in owning what is uniquely yours. Silicon Valley has a corner on the capital market, but money alone does not build strong companies. A strong business model is key, and more cities should be helping entrepreneurs to find gaps and see them as opportunities. Phoenix has a compelling case to make to solar innovators just as Sacramento does for sustainable agriculture. Attracting and retaining brilliant minds to solve problems with assets that are unique to a region should be a focus for all civic leaders.”
It’s also necessary to democratize education and support entrepreneurs of all types at all stages. She says, “Many cities compete for the relocation of Fortune 500 companies while simultaneously ignoring the small startup that has knocked on the door for support. Stop slamming the door. Big companies start small. Small companies grow big. All companies matter. Whether an idea is on the back of a napkin or generating revenue at scale, companies in the product, service and technology sector need support to better understand their customer, ensure product-market fit and scale a viable revenue model. Incubators and accelerators have played a critical role in providing such education, but more work can be done to democratize the education and training that early-stage entrepreneurs receive at all stages of growth.”
Two other points she makes are equally important in understanding how to create your own version of Silicon Valley.
One is to take problem solvers seriously – the world does not need another frivolous iPhone app. The world needs more entrepreneurs solving real problems. “It seems to me that solving the problem of how to feed 7.5 billion people and make a financial return with an agricultural technology is a hell of a lot harder, more sophisticated and badass than a face-swapping app. For social entrepreneurs, it is not about an exit or liquidity event, it is about solving a problem in the world. Elevating the stature of social entrepreneurs who are tackling real problems with market driven solutions is what every city should aspire to build density around.”
Lastly, she says, that the community should not be allowed take advantage of startups. “A community that maintains an inclusive approach to entrepreneurship must ensure that local attorneys coach entrepreneurs through legal terms; local bankers engage in fair deal-making; and seasoned startup executives help entrepreneurs negotiate fair term sheets for their next raise.”
She concludes, “Civic leaders empower entrepreneurs from all backgrounds at all stages to solve real problems in your community. Be brave and bold in your pursuit to build startup ecosystems that are inclusive of your city’s greatest assets, and diverse human capital to define a new era of what it means to be a truly great startup city. Nothing new comes through doing the same thing. Stop trying to become the next Silicon Valley; own a new and better version of what’s possible.”