We need more hi-tech, not hipster startups

Webexpo 2013 in Prague is over. It was an interesting weekend full of nice talks and meetings with interesting people.

I tried my best to deliver the key message during the keynote speech. The main topic for me was to raise awareness about the need for more hi-tech companies instead of creating hundreds clones of successful Silicon Valley startups.  That can’t be done without changing the perception of startup community and attracting more people from hi-tech and scientific communities.

Here is the transcript of the presentation.


Opening

  • Fact number 1. Who do you think are the most successful entrepreneurs? Young guys with no university degrees, like this one? Wrong. Most successful companies are built by people over 35 with PhDs.
  • Fact number 2. Out of the 246 new projects I saw last year do you know how many could be classified as high-tech or scientific? Only FIVE.
  • And finally, fact number 3. Although the Czech Republic is a good place to live and work, very few multinationals are actually headquartered here. That means that the real decisions about our jobs and our lives are being made outside of this country.

Why are these three facts important? Because we in the Czech Republic are focusing on the wrong kinds of startups. Although hi-tech companies led by older guys might seem uncool in the current startup scene, they are essential to our future.

So, how can we change this? I’ve got three proposals.

Change the perception of startup community and attracting smart people

  • First, we need to change the perception of the startup community.
  • Currently it’s seen as a hip place to start a social, mobile or web-based company. We are modeling our startup environment after something like Silicon Valley. But, we forget that Americans can afford this type of fun and relaxed attitude because of a strong foundation in other areas and a long history of innovation. We in central Europe cannot. Our ecosystem is too new and too narrow.
  • We need to start reaching out to people in the high-tech and scientific communities. We need to destroy the hipster image by organizing events that will be attractive to these much needed members of our society. They don’t blog or tweet, but they need to be assured that they don’t have to in order to be members of the startup community. We need to expand our vision of what this community means and what it can offer.


Sharing success, knowledge and effort

  • Second, our startup ecosystem needs to get used to the idea of sharing knowledge, success and effort.
  • Why? Because data is a commodity available for everyone. The difference is, what we can do with the data and how we can transform it into beneficial information. There is always some expert, but they are not always available or open to helping. We need much more and experienced people willing to share their knowledge.
  • Can you help someone by sharing your knowledge about design, user interface or programming? And if yes, be open to do so. They might be willing to help you out with marketing or sales in return.
  • And don’t stop with just knowledge sharing, talk about working together. Let’s work together more and create fewer but higher quality projects instead of creating hundreds copies of groupons or kickstarters.
  • When we use the words ‘startup community’ or ‘ecosystem’ this is what that really means, people!


Self-improvement

  • Third, we need to accept the fact that yes, in this country we are great at technology, but we suck at communicating our ideas. Once we accept that fact, we can start working on improving it.
  • We need to realize that the work isn’t done when the product is built, but it has to be pitched, sold and marketed.
  • But, we should not stop at learning how to sell only. We need technicians that are also sociologists, we need geeks that are economists. We need to be diversely educated to be able to think beyond our own subject and create something really new. This is how the great products of the future will be born – across the disciplines.


Closing

Right now, Czechs and Slovaks are defining the trends in computer security and electron microscopes. But, we can do great work in other areas, too. We need to have a finger on the pulse of the times.

What happens when the comfort of employment wins over innovation and entrepreneurship? What happens if we choose to create only clones of successful Silicon Valley startups instead of creating new hi-tech companies?

We will lose control over the decision making in our own country. We will be on a lower level of the value chain. We will be disposable. And what then?

For things to get better, we need better startups. We need more hi-tech and scientific companies. We need to be more open to smart people and exchange the startup lifestyle for a serious foundation for innovation and success.

Michal

3 Comments

  1. I agree that a lot of people are starting their business with low insight into problematics and so build mainstream and non-competitive products. Nevertheless, I do not agree that we should give up on non-technological startups, since:
    – We have some very good copies of foreign services that took all the market before foreign services expanded here. I am actually proud of it. There are doing good job, employing Czech people and paying taxes in the Czech Republic
    – I do not think we need to build just on technology. We need to build on exprertise and insights.
    – It is hard to find a good technology in the Czech academic environment. During my Ph.D. studies I noticed that often the least practical research was valuated most. This must change first.

    • good point. To clarify it, I don’t want to give-up on creating “low-tech”/”copy&paste” startups. They will be growing all the time. But we need to start thinking more about creating something more complex with higher value, otherwise, this services and products would be provided by foreign companies with local marketing and sales office. It’s happening with almost everything. How many jobs (and taxes) can you create with Microsoft marketing and sales subsidiary versus how many could you create with Microsoft research, development and production and sales department?
      FEI, Tescan and other companies in Brno employs thousands of highly-skilled people and giving jobs also to thousands of their suppliers.
      Definitely, it takes some time to get to this stage, but if we don’t start, we can’t get there.

      regarding expertise: definitely. And especially using cross-discipline knowledge and skills from people from existing companies (both SMEs and Corporations). Usually, more than 70% of spin-outs are from companies, not universities. But it could be fostered at academia as well. We need to start reaching out to smart people (that doesn’t mean necessarily “academicians” :-)

  2. Michale – music to my ears! :) Fully agree!

    One things to add – improve startups image also in their role in getting first experience, courage to start the business, learning to fail … e.g. hipster startup 1.0 evolving into startup 2.0.

    One question : what foundations do we need to create more quality projects? People cry that there are very few good projects but is there environment, infrastructure, knowledge and education to produce high quality projects?

    Keep on sharing!

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