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Comment by aerosmile | Hacker News Reader

This 100 times. It seems that people confuse the term "Silicon Valley of X" with "overindexing in tech relative to expectations."

I have worked in tech in NY, SF Bay Area, and LA. While all three geos were perfectly suitable for launching and running a startup, nothing comes even close to the experience of working in the SF Bay Area. There are many facets to this, but here's a very simple litmus test: take a meeting with a local VC and benchmark their behavior and expectations.

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This is the cynical view. In the generous view, other governments are studying the environment that led to the creation/success of Silicon Valley in the first place. Most often, they use Michael Porters framework on "Clusters" to analyze [0] how and why certain geographies have advantages in certain industries. The focus is on marshaling public infrastructure/incentives, private investment, and skills/education to create critical mass in a certain field. Indeed, this article mentions the impact of multiple government programs.

Your tech example comparing NY/LA to SF is the direct inverse of comparing the film industry in LA to SF, or finance in NY to SF. Those cities have their own clusters and vastly outperform in those industries. NY and SF also have good universities minting new engineers and lots of wealthy individuals to invest in those people. They would be silly not to attempt and foster a "new" Silicon Valley based on their specific strengths (look at biotech in Boston for the perfect example).

[0] https://hbr.org/1998/11/clusters-and-the-new-economics-of-co...

You can study all you want but that won't change the reality on the ground: Silicon Valley has a head start that will be hard / impossible to overcome within the next 50 years at a minimum, and any country that has such aspirations would do well to realize this and to aim for something they can actually achieve.

On top of that, even if you are successful in getting a world-class start-up off the ground in another location (random pick: Stockholm), how are you going to stop SV to buy out the founders and the investors and then proceed to reap the bulk of the returns? This is the problem.

Instead of reflexively dismissing, lets look at actual results. For a way to foster a new industry, we can look at Berlin.

SAP is one of the largest software companies in the world and also headquartered in Germany (not Silicon Valley). One of their initial founders, Hasso Plattner, has created the Hasso Plattner Institute [0] in Berlin (Potsdam, really). The Institute's focus has been primarily on business processes and software to analyze and improve those processes. Two of that institutes startups have been acquired in the past 6 months.

Appian buys Lana Labs [1]

SAP to Acquire Signavio [2]

EDIT TO ADD: Before Silicon Valley was the heart of innovation, it was New Jersey and Upstate NY. Things change and governments are wise to invest that way.

[0] https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&c...

[1] https://www.startbase.com/news/appian-kauft-lana-labs/

[2] https://www.summitpartners.com/news/Promoting-Process-Excell...

That's two comments in a row where you've started off with an insult.

And your data? TWO EXITS.

I've been looking in-depth at the actual results for the last 15 years professionally as an investor in Europe and a service provider to a very large fraction of the EU investment scene, and before that as an entrepreneur.

Your proof amounts to absolutely nothing on the scale of any European country versus Silicon Valley and to claim that it does is risible, and does the EU a disservice. If you are serious about making a dent in this then the best way forward is to acquire some background knowledge on the difference in scale that you are looking at.

It is quite possible to start a novel company in the EU. It is next to impossible to do so without either getting a much better funded and faster (and quite often better) executing competitor from the United States to come along and eat you for lunch, acquire you or woo your customers away with a 'free' plan that puts you out of business. That there are a few exceptions to that rule proves the rule, not the opposite.

What are you investing in then?

To date in > 20 start-ups of many different kinds, medical, social media, hard tech, consumer goods and so on, a fairly good mix of various segments.

Edit: updated the count.

Ah and I forgot to mention one of the ones I'm most happy about and which indirectly got generated through HN, a food start-up in America.

Then maybe there is hope for European startups after all and it’s not so all gloom and doom?

Absolutely. But if you have the option to join YC or some other US based accelerator you should probably jump at the opportunity.

I only shared my parent comment with the hope that some people might benefit from the lessons I've acquired quite painfully and over many years. It's not a diss at anyone's country or sense of pride.

From the governments' perspective, it makes perfect sense to do everything they can to turn their countries into the next Silicon Valley. Same with the VCs - there's a lot of money to be made with the local talent that for whatever reason chooses to work in a geo with less attractive valuations and less favorable terms for the same quality of work.

But from the entrepreneurs' perspective, it really does matter if your local VC can get away with shenanigans because they are a big fish in a small pond [0].

[0] In this context, small pond is not a measure of the size of the city or its population, but instead a measure of the opportunity cost. If a NY VC screws over a NY entrepreneur and that entrepreneur somehow gets a big enough megaphone to ruin that VC's reputation, the VC in question would simply just focus on one of the many other sectors of finance that exist in NY (eg: private equity, investment banking, etc). If the same thing happened in the SF Bay Area, that VC would have to relocate their family to a different city in order to have a hope of a career in something related to finance. I am exaggerating a little bit, but not much. That power dynamic is very evident in interactions with VCs in the SF Bay Area.

> SAP is one of the largest software companies in the world and also headquartered in Germany (not Silicon Valley)

It should then be noted that SAP has been left behind and is approaching fossil status. They're not a great example of a thriving European tech company (there are far better examples of that, such as ASML). If they run any slower they'll shortly be the next IBM. Someone should knock them off in Europe, they're begging to be toppled by a local, faster moving upstart.

CRM had $10b in sales in 2018. Now they're at $22b (trailing four quarters).

SAP had $23b in sales in 2018. Now they're at $27b.

Run a reasonable growth projection on the two for the rest of this decade and it ends with CRM being twice the size of SAP.

And of course everyone knows the AWS growth story.

I suppose SAP is keeping growth pace with Oracle, which similarly has little growth and is also a fossil that is hoping to not get killed off in this era's inflection.

In the time that Microsoft has become a planet eating juggernaut with $70 billion in operating income, SAP has been mostly swimming sideways. Azure is an increasingly huge business for Microsoft, and it'll end up larger than SAP all by itself. SAP used to be a substantial peer to Microsoft in the software world, if you go back ~15-20 years ago, in terms of scale. SAP was a very prominent first tier software company, now they're not, they're fading (and yes, I know lots of companies still use their software; the same goes for Oracle).

I like SAP. I think they are doing pretty well with the new direction, common platform etc.

But yes - Microsoft for example, if they decided to play harder / lean in more on the ERP space - going to be compelling for folks. I think microsoft needs a few more years to sort out / gel their story (ie, get to Azure, get rid of some of the crap old ballmer style stuff).

I don't see SAP though as a good example of a silicon valley startup scene. Can you start a new SAP in EU? Not so sure. Can def do it in US (Sap also competes and wins against Workday).

I'm not counting SAP out yet - I think their leadership hasn't been bad - which is key.

Right. The vibe in the SF Bay Area, is just amazing in terms of tech companies.

I'm in LA now, and "Silicon Beach" in Venice and Santa Monica is an utter joke compared to the entire Bay Area. Silicon beach is a few square blocks, whereas the entire Bay Area is awash in tech, no matter where you go.

Silicon Valley is entirely geared around tech. You can find anything and anyone there.

It is the same as Los Angeles to movies. You can't beat LA, because they have been doing it 100 years and have a zillion companies backing it up - all the little companies. There are oodles of movie industry lawyers, talent agencies, accounting firms, all geared to specifically the film industry. Are you going to be able to find 10 law firms in Silicon Valley or Chicago or Miami that deal exclusively in the entertainment industry? No.

Unfortunately it falters in every other measure.

how so?

For me, as an Argentinean visiting NYC, LA and SF, the overwhelming “superiority” of SF in terms of entrepreneurship was seen in the small details. Like riding a bus and siting next to someone that was coding their startup (real example). Or driving a few miles south and visiting a biology/lab in a garage (also real example).

The VCs and all that is probably true. But the air you breath on SF is different.

Its funny that you feel you have to specify that those are real examples, since those (especially the person coding on the bus) are just such obviously common things that nobody in the bay would even think those might be made up examples.

Right. To anyone in the Bay Area, it's no big deal. But anywhere else, it don't happen.

> It seems that people confuse the term "Silicon Valley of X" with "overindexing in tech relative to expectations."

Isn't that the primary definition of "Silicon Valley" nowadays?

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