Right or wrong, there is a perception in the entrepreneurial/startup space that when looking for a place to start a technology business, there is Silicon Valley and then the rest of the country. There is a commonly held belief, that most, if not all of the innovative and disruptive technologies being developed today come from roughly 1,500 square miles of northern California. Perhaps the biggest question from the rest of the country is “Why?” Sure, the Valley has a number of built-in advantages, including (in no specific order (i) a concentration of incredible research institutions; (ii) a robust job market; (iii) a highly skilled labor force; (iv) a well-established capital community; and (v) a pretty decent climate. But other cities have many of these elements as well. So the questions remains: What makes Silicon Valley the hub of innovation and more importantly, how can the startup environment that has been built there be replicated in other cities?
In my role with Think Big Partners,
I am fortunate enough to meet almost daily with incredibly sharp, incredibly
talented and incredibly motivated entrepreneurs who are sure they are on track
for building the next big thing. Their
enthusiasm and commitment to their idea/business is inspiring and one of the
best things about being a part of an organization like Think Big. While most of the entrepreneurs and a majority of the meetings are here in the Heartland, we have developed a very
solid strategic partnership with several key players in Silicon Valley. As such, I have had reason to interact on a
relatively steady basis with some of the power players in the Valley over the
past eighteen months. In that time, I’ve
noticed one very important aspect of the culture in the Bay area that does not
exist here in Kansas City or in any of the other cities we work in. It’s an attitude that is born out of
entrepreneurial activity and one that is difficult to develop on your own. The key ingredient: IT’S OKAY TO FAIL!!
No one likes to fail. No one sets out to fail. For most of us, we are taught at a very early
age that failure is bad. Failure in
school, failure in relationships, failure in sports. All of it is terrible and something to be
ashamed of. In Kansas
City and the rest of the country, the vast majority of business failures
quietly fade away and the founders are doomed to years of humiliation and
rejection. No one wants to associate
with a failure. Yet somehow, that early life
lesson seems to be nonexistent in the Valley.
Some of today’s most powerful business leaders in Silicon Valley have also
been the stewards of some spectacular failures.
Perhaps the most revered and famous failure of all, Steve Jobs, set the
stage for today’s acceptance. When Jobs
was in his first go-around with Apple, he was very publicly and unceremoniously
dumped by the Board of Directors. Very
few people who were paying attention to the tech world at that time were
unaware of the humiliation heaped upon Jobs when he was sent packing. But according to Jobs, it was a blessing. At a commencement speech at Stanford in 2005,
Jobs said, “I didn't see it then, but it turned out that getting
fired from Apple was the best thing that could have ever happened to me. The
heaviness of being successful was replaced by the lightness of being a beginner
again, less sure about everything. It freed me to enter one of the most
creative periods of my life.”
Jerry
Kaplan and GO Corp., Marc Andreessen and Loudcloud, Bill Coleman and DEST Systems--the list goes on and on. These
entrepreneurs wear their failures like a badge of honor. We’ve met with a number of VC groups in
Silicon Valley who will not invest in entrepreneurs who have not failed at
least once. It is often repeated mantra
that if four out of five of your startups don’t fail, you are not being bold
enough.
Now let’s be clear about the
concept. Failure by itself is not a
predictor of future success. Thousands
and thousands of entrepreneurs have failed because they didn’t understand their
business, they didn’t understand their market and/or they were simply not
capable of launching a business. What
appears to be pervasive in Silicon Valley is the attitude that it is only a
failure if you don’t learn from it. Many
of these spectacular failures provided the necessary learning curve that was
essential for the future successes achieved by such entrepreneurs. While
discussing a very accomplished business , a well-respected Valley
entrepreneur recently said to me, “During their startup phase, [the company] did
everything wrong, but they didn’t do it wrong for very long.” They learned from their failures and after
many years of struggling to break even, they are now a publicly traded
behemoth.
The most important aspect of
all of these examples is that the entrepreneurs didn’t read failure as an
indication of their inability to succeed.
It was what it was; a failure of that product or service, in that
market, at that particular time in history.
These entrepreneurs did not fold up their tents and go home, but rather, took the lessons learned in their failure and applied them to become better in
the next go-round.
This
is clearly something that can’t change overnight. The fear of failure is a deeply-rooted attitude
and one that will take years to change in both individuals and communities. But it is obviously something that can be
changed. The advantage Silicon Valley
has is not geographic or climatic (and thus unable to be replicated). It is in large part, attitudinal and capable
of evolving. If our institutions,
government, business, media and family can all begin to understand that failure
is not a dirty word, and can come to embrace the educational aspects of
failure, then the rest of the world can begin the process of emulating the
startup culture of Silicon Valley.
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