Innovating Through Europe’s Economic Crisis
Venetian mask
Europe’s financial crisis is creating havoc, but as an ancient Chinese saying goes: crisis equals opportunity. There are many ways you can help Europe and your business through this crisis:
Hiring Europe Tech Talent – Silicon Valley is suffering from a serious talent shortage due to the rapid growth and hiring of Facebook, Google, Apple and other Internet and mobile companies. In the past, India was a key source, but European developers are plentiful and often more creative and innovative. Silicon Valley companies and recruiters should work closely with Europe’s technical universities, professional associations, and regional promotion agencies. The best places to look:
- Ireland: ConnectIreland.com is looking for foreign companies to invest, but they can connect you with tech talent. Silicon Republic provides tech news: http://www.siliconrepublic.com/. The Irish Innovation Center in San Jose, CA has numerous ties in Ireland and expanding its reach to other European nations: http://www.irishic.com/
- Italy: MindtheBridge.com runs a San Francisco incubator that brings Italian ventures to the Bay Area, but it’s bringing in ventures from other nations.
- Spain: InvestinSpain.org can connect you with tech talent, as well as Jobssy.com, a Madrid job-matching service.
- Germany: The German American Business Association (www.gaba-network.org) offers a variety of events and services.
- France: Parisoma.com has strong ties with France and Europe. I’m an international adviser to EPITA.fr, France’s largest computer science school so contact me via DreamscapeGlobal.com.
- Nordic region: Silicon Vikings (www.siliconvikings.com), Swedish American Chamber of Commerce (http://sacc-usa.org/), and Innovation Center Denmark (http://www.dabf.dk/Files/Documents/Finding%20Investors%20by%20Alex%20Portilla.pdf) are gateways to Scandanavia.
- Russia: Skolkovo Innovation Centre in the new Skolkovo tech park can introduce you to tech talent: http://www.sk.ru/en/
Marketing European Companies: Even though Europe is in recession, there are always opportunities to enter the European market if you target your entry markets well. Where are the opportunities? Probably the biggest one is helping European companies, both large and small, to expand their sales overseas, especially in the U.S. and Asia. Companies can be contacted through the above agencies and groups.
Entrepreneurship Training: European regions and entrepreneurs are seeking tips and insights on how to promote innovation and entrepreneurship since most schools and universities don’t offer practical courses in these fields. You can offer presentations and workshops, both online and in person, by partnering with European companies. For example, I’m partnering with an Italian company that will arrange and market my entrepreneurship workshops throughout Europe. I also write a periodic article on Silicon Valley trends for an Italian blog: http://www.lifestylentrepreneur.org/categoria/letters-from-silicon-valley/
Importing European Products: Importing products and services is always a popular business. The key is to do your research and find products/services in your area of interest or expertise where you know that you can easily sell them online. For example, Nordics make wonderful sweaters, while small Italian manufacturers offer top-quality fashions which you can find by contacting Netstyler.com in Naples. Seek and ye shall find. Now it’s fairly easy to build an online retail business using cloud services.
So there are many ways to help and partner with European businesses and regional agencies. Given the urgency, Europeans are very open now to working with people who want to work and grow with the. Plus, visiting Europe is always a pleasant reward! I’m going to Brussels and Italy in June, perfect timing since the dollar is strong. Come join me!
Job Creation Through Vertical Cloud Services
Job creation is probably one of the biggest immediate challenges facing most regions and nations. With the global economy tilted toward benefitting the top 1%, the other 99% are asking: How can we find and create jobs in this new global economy? Manufacturing and even service jobs are vanishing at an astounding rate due to productivity gains and slowing global growth. Where are the new jobs and how can they be stimulated?
I think the secret to the New Global Economy is “intelligence” — the application of information technologies (IT) to existing industrial sectors, not just to cut production costs, but to add value to products and services.
For example, Maker Fairs for inventors are proliferating and now partnering with IT developers to develop new types of smart devices aimed at specific sectors, such as the blind, aging, dyslexic, paraplegic, etc. There are plenty of sectors where smart solutions are badly needed, whether it be fresh water, sanitation or K-12 education. The new jobs and industries will be created by those innovators who, as my mother once told me, “find a need and fill it.”
Back in the late 1990s, my Silicon Valley friends lamented that the age of the garage inventors like Apple was over. The future would be controlled by major corporations. Meanwhile, a Taiwanese American couple were building home WiFi sets from off-the-shelf parts purchased at the nearby electronics stores. Their little startup, Linksys, was later acquired by Cisco Systems for $340 million. My friends said “I could have done that!” But the problem is that they didn’t because they thought it was impossible.
Belief is probably the biggest obstacle facing innovators and job seekers. If you believe something is impossible, you will not try and thus not innovate. Others will do it first. That’s probably the biggest lesson I’ve learned from growing up in Silicon Valley. The future belongs to the believers and builders, not the skeptics.
So how can people build businesses on the cloud? Right now, sector-specific cloud services are booming because Facebook and Linkedin are too generalized, rigid and inflexible. People want more flexible social and business networks where they can build community, attract advertisers, sell merchandise, etc. In other words, people are seeking greater control over their business and social lives. I think the future belongs to innovators who create specific business and social networks to address their main concerns, whether it be raising money for their local school, stopping suicides, or helping old people.
In Silicon Valley, we have have a favorite saying from Alan Kay, former Apple and Disney innovator:
“The best way to predict the future is to invent it.”
May you invent the future by building your own cloud services and smart devices!
Another Silicon Valley Dot.com Bust Coming?
Facebook going public is probably the longest awaited event in the history of Silicon Valley, which has a notoriously short attention span. Accustomed to startups becoming overnight successes, we valley folks expect Facebook to trigger an IPO (initial public offering) boom and more investments. But some observers worry this is just a new technology bubble that will lead to another crash.
Is it? Will Silicon Valley crash again? I don’t think so for several reasons:
1. Global Markets: During the 1990s, Internet startups were primarily targeting the 100 million or so U.S. and European PC users. This time, the markets being targeted by Silicon Valley startups are much larger and still largely untapped. There are a billion PC users and over 5 billion mobile users worldwide, who are technically savvy and buying online, so the total user base is sixty times larger and growing faster. Thus, ventures can scale faster and bigger than before. Even Facebook could attract billions of new users overseas.
2. Profitability: Facebook, Google, Zynga, SalesForce and other social media leaders have sustainable business models because they are profitable, unlike the 1990s dot.com ventures. Their key issues are scaling fast enough for global markets and developing new revenue sources, not figuring out profitable business models and raising VC funding. Many small social media companies also have sustainable revenue models.
3. Mobile Commerce: Unlike the Internet, mobile users are used to paying for services online and have yet to buy products in volume. However, mobile apps are changing that dynamic and will increase retail sales of all types of products. Mobile banking, Q codes and other innovations will accelerate the pace of mobile commerce.
4. Global Investors: In the past, Silicon Valley venture capitalists (VCs) dominated technology investments, but now angels, corporate funds and VCs from China, Brazil, Russia, and other cash-rich markets are entering Silicon Valley and other tech regions, which is creating competition for Silicon Valley VCs. Even if Silicon Valley VCs invest less, Silicon Valley ventures can raise money and go public offshore. Right now, China is the fastest-growing VC market.
5. Corporate Venture Funds: Google Ventures is funding and launching startups in Silicon Valley and could easily replicate this model worldwide since it has over $40 billion in cash. Microsoft, Facebook, Apple, Cisco, and other Silicon Valley corporations could also expand their venture funds to stay abreast of fast-moving technology markets since they are collectively sitting on over $100 billion in cash and looking for new places to invest. The valuation of the top 100 Silicon Valley corporations tops $1.5 trillion, or 10% of the size of the entire U.S. economy.
6. VC Moderation: Unlike the late 1990s, Silicon Valley VCs are much more cautious about over-investing and valuations, with many older funds shutting down due to their dot.com excesses, so the days of big, speculative investments is over.
7. Super Angels: In the place of older, conservative VC funds, new “super-angels” who cashed out of eBay, Amazon, Google, and soon Facebook are becoming the seed investors for the current round of startups. They are investing smaller amounts of money into Internet, software and related fields, and providing more hands-on guidance since they know the industry well. So the valley is shifting from older, bigger VC funds to super angels.
Will investing slow? It already is in over-subscribed areas like social media and mobile apps, but Big Data, energy efficiency, and other emerging fields are attracting new investor dollars. Probably over 80% of Silicon Valley startups fail, but investors know this and diversify their risk by investing in a variety of startups and fields. They know Silicon Valley is the “valley of failure,” which is a barrier to entry for companies, governments, and other regions that try to clone Silicon Valley.
In fact, the ability to rebound from failure is probably Silicon Valley’s biggest competitive edge. Most people fear and avoid failure; Silicon Valley embraces and works around it. In the valley, there’s a saying: “Fail often and fail fast.” You’re unlikely to hear that in most places around the world.
Sheridan Tatsuno is principal of Dreamscape Global (www.dreamscapeglobal.com), founder of Silicon Valley Global Network (http://svgnetwork.com and on Facebook), and author of the upcoming e-book, “In the Valley of Digital Dreams,” which features his amazing interview with Michael Dell (http://www.lifestylentrepreneur.org/2010/09/23/an-amazing-conversation-with-michael-dell-from-%E2%80%9Cin-the-valley-of-digital-dreams%E2%80%9D/
Personal Learning: The Next New Thing?
The e-book industry is maturing fast. Amazon’s success with Kindle and Apple’s recent forays into iBooks suggest the industry is shifting to a new phase. No longer are online publishers content to provide self-publishing tools and sell through their online stores. They are preparing to overturn the backbreaking textbook business with lighter, compact e-books and provide solutions for educators.
Apple’s iBooks will redefine the way that learning and education are done. Self-education will be the easier part. Reorganizing schools and retraining teachers will be the big challenge since e-books will extend learning beyond the school walls where 90% of the learning occurs anyway. To fill this void, lots of new e-learning ventures and services coming!
I believe e-books are the first step the coming revolution in Personal learning (PL) — the “Next New Thing”. Like PCs, tablets are triggering a boom in mobile apps for learning, training and educational methodologies, systems and services. Khan Academy has already proven that there is a huge pent-up demand for basic education online. MIT recently expanded its Open University program. Other universities, schools and training centers will follow suit to capture market share in this emerging business. In Silicon Valley, Neery Khosla’s efforts remind me of the Home Brew Club, which nurtured PCs. http://www.mercurynews.com/mike-cassidy/ci_19794734
With hardware prices declining due to China, tablets will be dirt cheap or even given away like low-end phones, with personalized libraries of education and learning apps and e-books sitting on tablets and the cloud. Tablets could save schools lots of money and kids backaches from heavy textbooks, especially if low-cost tablets are linked by WiFi to “teacher servers.”
What will we do with all this cheap hardware? What will this new world of Personal Learning look like?
- Experts and teachers will be able to offer personalized lessons to groups of students, whose performances are tracked in real time. Skype is already being used by music teachers to offer online classes, which will expand into all fields. Tutoring will become a multi-billion-dollar industry.
- Students will develop personal learning profiles, like art students do today, which will reside on tablets and the cloud. They will be able to identify career paths based on their interests and skills, study online, and find projects or work online. New online learning exchanges will appear, replacing or supplementing traditional universities.
- Companies already outsource training, which will boom during the next decade as the speed of innovation and new knowledge outstrip the ability of companies to keep up. Real-time training, testing and reviews will become more common, especially high-risk fields like finance, civil engineering, and healthcare.
- New online schools will emerge from online forums and clubs, as members try to find ways to monetize their social networks with valuable training services.
- Instant e-books with audio, video and animation will proliferate due to the availability of online authoring tools.
- Many people will defer going to college, instead learning online and through face-to-face workshops, in order to pick up practical work skills. Knowing how to manage people, data, money, premium content, property and other critical assets will become increasingly important.
These are just some of the “obvious” trends that are likely to emerge. It would take much more research and brainstorming to fathom the breadth and depth of the emerging Personal Learning industry, so I invite you to add your comments.
2012 Outlook: Cloudy but Clearing
Happy New Year! Thankfully, 2011 is over and we enter a bright new year. What are the big trends that will affect your business and career prospects? How can you leverage them to achieve your goals? Here are the big ones to watch carefully:
Global Economy: The U.S. Recession is finally come to an end, with manufacturing and hiring picking up and the elections and Olympics usually boosting growth, so the U.S. will probably become the main economic driver in 2012 as China slows and Europe faces a shallow recession. Social media technologies and marketing/sales are maturing fast so these fields are adding lots of new jobs. Japan is flat, but its corporations have $10 trillion in cash, which they are investing in M&As (mergers and acquisitions) in faster-growing overseas markets. Africa, Turkey, Indonesia, Brazil and SE Asia continue their rapid growth, so lots of opportunities are opening up for people who bridge markets.
Silicon Valley: The valley is enjoying a boom in mobile, cloud, Big Data analytics, automotive IT, some greentech and biotech fields. Social media will accelerate the shift to bottom-up and horizontal communications and business supply chain integration. The hot new fields are social media-based e-learning, personal health, consumer and small biz collaboration hubs, mobile commerce, and transmedia production.
Personal Learning: I think Personal Learning (PL) is the Next New Thing in Silicon Valley due to the huge global need to educate, train and retrain billions of people in preparation for a fast, IT-intensive global economy. Khan Academy, MIT’s Open University and Piazza are setting the pace for the new generation of e-learning systems, which will enable students, teachers and mentors to easily distribute content and collaborate online. I expect to see an explosion of sector- and topic-specific e-learning services provided through mobile phones.
Personal Health: Health 2.0 was about Web-based health information systems. Health 3.0 is emerging as the next generation of personalized health, well-being and fitness, largely based on smart phones, wearable pedometers and monitors, and sensor devices connected wirelessly to cloud-based health services.
Grassroots Collaboration Hubs: There is a noticeable pickup in collaboration hubs organized by individuals, investors, activists, small businesses and regions, in part influenced by Facebook, Linkedin, Twitter, office sharing and the Arab Spring, which emphasized crowdsourcing and knowledge sharing. New cloud services and mobile apps will make it easier to create powerful hubs that reach millions of participants in specific sectors, forming a tertiary tier of social networks.
Mobile Commerce: Mobile users have primarily used their phones for communicating and buying things. Now they will use them to sell products/services and transact business. Mobile retailing, auctions, and deal-making will boom as users discover the power of smart phones to generate income fast.
Transmedia: In Hollywood and San Francisco, the term Transmedia — the convergence of top-down Old Media and bottom-up social media — is a hot buzzword, much like multimedia was during the early 1990s. But this time, smart phones, social media tools and cloud services will make it possible to create, sell and distribute content faster and more cheaply. Watch for a boom in new Transmedia startups that become the next Facebooks and Googles.
As you can see, I’m pretty bullish about 2012 because of the plethora of new technologies, markets and business models emerging, which are converging with a huge worldwide demand for new jobs and careers. If necessity is the mother of invention, the Recession and Occupy groups have demonstrated that there is intense desire for better ways of doing things. Success will go to those who ride these trends, move fast, partner globally and work hard.
How to Build a Silicon Valley #2: Go Virtual!
Recently, I’ve had an interesting discussion with two colleagues in Dresden, Germany who are trying to create their own Silicon Valley. They’ve started an online game and want to leverage it to jumpstart tech startups and local economic growth. Our discussion: http://www.facebook.com/#!/RalfLippold/posts/176224045808378?notif_t=share_reply
How does one leverage the cloud to catalyze local economic growth? This is perhaps the biggest challenge facing a Great Recession global economy, not just Dresden. Those innovators who figure it out will be the new 21st century entrepreneurs. Here are my thoughts on some ways to jumpstart local innovation using the cloud:
- Silicon Valley is not a place; it’s now a mindset and philosophy about work and life, so it can be built anywhere. Think memes. Focus on relationships and markets, not building brick-and-mortar initially, which can come later.
- Leverage online technologies, including social media, mobile apps and cloud services. They’re faster, cheaper (often free) and easier to deploy. Think bottom-up grassroots initiatives by individuals and small groups, like the Arab Spring and Occupy, not top-down and formal government programs only.
- Connect and partner with Silicon Valley and other regional groups and individuals. Think “of the world, by the world, for the world” to build global ventures, not just locally. Avoid “the blind leading the blind” trap of local chauvinism. Be open and think globally from Day 1!
- Launch B2B entrepreneurship blogs, websites, mobile apps and groups on Facebook, Linkedin, Eventbrite, Meetup, and Twitter to connect entrepreneurs, service providers, investors, universities and regional promotion agencies.
- Use free cloud services by IBM, Amazon, and other service providers aiming to attract small businesses.
- Use crowd funding sites like IndieGogo, Kickstarter, and others to raise your seed round.
- Shoot promotional and training videos for distribution on Facebook, YouTube, Hulu, Vimeo and other social video sservices.
- Organize online contests using existing service providers.
There are hundreds of other practical, short-term and cheap/free ways to launch and build startups and a critical mass of entrepreneurs, so explore them and share them with your community. Rome (or Silicon Valley) wasn’t built in a day so you need to think long-term, start now and be patient!
Best wishes in your journey and post your progress on this and other sites.
How to Build a Silicon Valley
Many cities and regions try to clone Silicon Valley, but I think it’s a waste of time copying a rather unique region. Silicon Valley has many attributes that most regions lack: an open society, talented immigrants, world-class research universities, great weather, an entrepreneurial try-it culture, heavy Pentagon spending in leading-edge technologies, thousands of angel investors, hundreds of venture capital (VC) firms, etc.
So how can regions develop their own Silicon Valley? Bangalore has shown that it’s possible to build a “Silicon Valley of software” by investing heavily in infrastructure and partnering with Silicon Valley via TiE.org. Fortunately, India has a plethora of top IT college graduates and, even then, it’s better at outsourcing than original software design. But it has succeeded in creating many jobs. East London, Cambridge, Oxford, Barcelona, Stockholm, Shanghai, Beijing, New York City, Boulder (Colorado), and Austin, Texas show it’s possible to cultivate startups by creating a supportive ecosystem.
What’s the magic formula? Here are my tips:
- Leverage your strengths. Find your strongest areas of education, technology, marketing, distribution and finance where your region can become world class. In the 1990s, Nokia leveraged its digital technologies from the military to build a global presence. Today, Rovio is building on Finland’s fascination with online and mobile gaming. Entrepreneurs in East London and Berlin are taking advantage of cheap rent to build grassroots tech clusters.
- Transform your weaknesses into strengths. Chinese cities are leveraging their pollution problems to create a solar energy and other green industries, which is a good example of the principle: Necessity is the mother of invention. Find your biggest problems and figure out affordable solutions that can be sold worldwide.
- Connect with Silicon Valley professional organizations. The valley has hundreds of tech organizations, colleges, research centers, and incubators that are open to global collaboration. Just Google them to find suitable partners, offer to collaborate, visit the valley, then establish ongoing programs and projects. It’s easier than you think. The big groups are Tie.org, Monte Jade, Asian American Multitechnology Association, Keizai Society, Silicon Vikings, and Hispanic Net, but look for others.
- Visit Silicon Valley. Visit us or at least send college students, entrepreneurs and research professors here on tours and sabbaticals so they can meet valley organizations and people. The valley is very informal so it’s easy to connect with people. See article, which has a very good description of Silicon Valley values and culture. How can you extend this openness extend to your region? http://onstartups.com/tabid/3339/bid/74008/Visiting-The-Valley-Why-It-s-A-Special-Place-For-Startups.aspx
- Set up an online business network. Showcase your local talent and connect it with Silicon Valley organizations and universities. Direct, informal people-to-people communications is the fastest and most effective way to network with Silicon Valley and other emerging tech regions.
- Organize a contest or online game. Involve Silicon Valley and other regions to participate in your local contests and online games. Make it fun and challenging and you’ll get millions of visitors and many participants. “All the world’s a game.”
The key is to have fun, pick easy challenges initially, network with Silicon Valley and other regions, and just go for it. Bottom-up grassroots initiatives, like the Arab Spring or Occupy, are much faster and more effective than slow, bureaucratic, top-down government programs. After all, Silicon Valley’s entrepreneurial culture is led by entrepreneurs, not bureaucrats. So loosen up, connect and have fun! Then you’ll succeed faster than you can imagine.
