Valley v Europe… or Lon Francisco

Great guy and pal Basti interviewed on Tech Crunch TV by Paul Carr and Sarah Lacy and has generated some good chatter – I thought I’d put one of my excerpts on the blog. In exciting news (to me), it actually inspired me to re-instate my domain forwarding and is my first post in about 1.3 years. Ok, mebbe I’m back. Mebbe not. In any case:

Original Video: http://techcrunch.com/2010/10/11/euro-entrepreneurs-either-come-to-the-valley-or-stay-home-and-play-with-the-losers/

And my email / post:

Basti, Baby,

Being double-teamed by two of the better minds in the business on one of your first TV interviews is definitely a great rite of passage.

And, guess what, even bringing the debate of Silicon Valley v London (Not Europe, Hon) is a fine thing.

How-evah, a few thoughts:

 - What is your company / model?: Basti’s co definitely has a super-charged factor by being closer to the centre of the Twittosphere

 - 80:20… ROW > USA: I love Sarah’s point about traffic coming from outside of the US; The reason I decided to plant the proverbial flag in London in 2008 was that I felt that international is key – If I look at why GoIndustry beat out 8 competitors funded w/ $1B it was because the international aspect of our particular business mattered and once we got the international model nailed, the US was just one more country (admittedly, with an American founder team).  You can’t miss that FB, LI, Twitter, Zynga are all moving East to London and Dublin and kicking butt, but even better is having multi-national in your DNA… Including USA

 - Just like in high school, being cool is fun… But dangerous: Anyone who wants to make in dance should do a stint in NYC; In start-ups, making sure that you ‘measure up’ to the Valley crew is key.  But I think that Sarah makes a(nother) great point about whether it is whether we get caught up in being ‘down with the cool kids’ that are ‘cool’ (in a geek kinda way) because they are Valley-known / echo-chamber approved / ‘backed by the right angel’ versus ones who identify a need, build a great product, and execute like a mother f**ker

So, why London?

Disadvantages
I gotta admit, what I saw in London in early 2008 was tough – expensive devs, high rent, no product people, no cash, no experienced angels, conservative VCs, small market.  However,

I’d now say
 > Frankly, in 2010 (helped by the demise of the ‘City’ and it’s endless contractor pools of devs, it is easier and better to get a fantastic dev and product team in London than the Valley (where they’re always going to be drawn to the next or to the GOOG) and cost-competitive to India… But you can dip in and get more, from Romania, Ukraine, Estonia.  Endless supplies.  H1 Visa issues?   Bite me, it’s EU.

 > High rent: Still a pain, but well-managed, seek the buildings doomed for the wrecking ball (Slicon Soho, TransWorld House, more – I’m in – it’s simple arbitrage)

 > No Product People: Not enough, but better (shout to Janna / ProductCamp)

 > No Cash, no experienced angels, conservative VCs: Yup.  That’s a bitch.  But getting better. And a) nigh eliminates the ‘limp-alongs’ cited by Sarah, b) angels are increasing, if slowly, c) VCs got pummeled and are licking the wounds of ‘99, ‘02 and even ‘06 … But they’re getting more aggressive today.  Really, today. And, guess what?  US VCs are learning how to use IBANs and those crazy ‘+’ signs on their phones.  Have you seen the influx of talent from the Valley.  Mark my words, they’ll be crampin’ my style in 18 months.
 
> Echo chamber? Artificial social valuations vs. real traction?  Sure.  But so much less so than the Valley.  I (unsurprisingly) believe in the benefit of an experienced set of investors / advisors.  But there’s too much glam around ‘this was backed by xxx’ – What really matters is getting real traction and getting s**t done.  

 > Defense, baby.  One great thing about being Euro is that it is easy to get native German, French, Spanish and other peeps here.  The US can definitely assail the UK.  A quick look at top sites confirms it.  But if you think European, you can build your ‘fortress’.  

 > Don’t confuse a good defense with no offense: Get on the goddamn plane.  Get to know the Valley crew.  Build the bridges.  Impress them.  Do the deals.  Biz dev is easier in the US – we Americans are straight shooters, consumate networkers, and do deals quickly – and the US has bigger firms / networks / publishers. Compare your speed, agility, talent, ambition to the brightest.  But if you think about trying to compete for dev talent w/ Google, Facebook and 200 misguided VCs versus the best missile command system designers from the Eastern Bloc and their spawn, I’d say that there is a rationale for here.  It’s not easy to span both, but world conquest has it’s cost in jetlag…

 > Govt support: It’s not perfect, but the Technology credits and loan guarantees are ok, and there should be more coming down the pipe.  It doesn’t make up for smart money, but most money isn’t really that smart after all anyway.

 > Ecosystem: The Valley is exciting because everyone is in tech.  But sometimes it’s nice to be in the minority, working together on the great conspiracy.  ( Faction. Noun. “A minority group working within, and in opposition to, a majority group.” ) Supporting one another and helping one another grow.  But only if we make each other better.  And I’ll say that I believe we can, we will and it’s a little more fun that way.  

 > So, the answer?  Both.  That’s why I ultimately picked here.  I’m fortunate, I’ve got years in the Valley and childhood friends there. But you don’t have to. We’ve got a collective network over there. If you are good, compete w/ the Valley – But there are reasons why having a European HQ is not loser-ville.  Just make sure you are seamless.  It used to be NY-LON – Maybe it’s more Lon Francisco these days.