Paul Wallbank – Brilliant Communications

Tag: silicon valley

  • Silicon Valley and the rise of Chinese innovation

    Silicon Valley and the rise of Chinese innovation

    Silicon Valley could be soon surpassed by China warns Uber’s Travis Kalanick.

    While sceptics could dismiss Kalanick’s claim as his simply sucking up to his hosts in Beijing where he made the comment, or put the statement down to a PR campaign for his company’s renewed push into China, there may be a kernel of truth.

    If for nothing else, the Chinese diaspora across the Pacific Rim is known for its entrepreneurial drive. From Bangkok to San Francisco and Sydney, Chinese communities have a reputation for being full of smart and hardworking business people.

    Added to the Chinese cultural aspect is history. Fifty years ago car makers in Detroit and motorbike manufacturers in Birmingham, England, scoffed at the idea that their Japanese competitors could overtake them.

    Within a quarter of a century they were proved wrong.

    Another concern for Silicon Valley is that it could be losing its edge. As veteran journalist Tom Foremski points out, increasingly workers in the Bay Area live in a privileged bubble.

    Foremski discusses how younger, creative and innovative workers are finding opportunities in cheaper and more diverse American cities like New York’s Brooklyn.

    America’s diversity, and depth of its economy, will continue to be a strength for the foreseeable future but Americans, particularly those in the Bay Area, shouldn’t be resting on its laurels.

    Travis Kalanick’s warning might be dramatic, but it isn’t beyond the realms of possibility.

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  • Silicon Valleys of the Twentieth Century

    Silicon Valleys of the Twentieth Century

    The rise and fall of industrial hubs is a topic that fascinates this blog and the excellent BBC and US National Public Radio series Six Routes to a Richer World discusses how countries as disparate as Germany, Brazil, China and the United States are carving their own paths to prosperity in the 21st Century.

    In the US segment, the show looks at one of America’s industrial centres of last century – Dayton, Ohio.

    The home of the Wright Brothers, Dayton also saw the invention of the cash register, air conditioner and even the self starting motor. In the early part of the Twentieth Century it held the most patents per capita of any US city and workers flocked to the region for high paying manufacturing job.

    Manufacturing, and research, is largely gone from Dayton today and the question posed is could the successful cities of California’s Bay Area follow a similar path this Century.

    Whether Silicon Valley and San Francisco fade will be a matter of historical forces that are difficult to see right now, but the likelihood can’t be underestimated.

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  • Building a European Silicon Valley

    Building a European Silicon Valley

    The World Economic Forum asks can Europe build its own Silicon Valley?

    It seems the answer lies in money, investors’ money to be precise, with a lack of VC funds to finance emerging businesses and a lack of acquisition hungry corporates providing high profile experts argues the WEF piece’s author, Keith Breene.

    That appears to be a strong argument although there’s still some strong contenders for European tech hubs with the WEF identifying Munich, Paris and London as being major centres.

    London’s claims are reinforced by the city’s strength in financial technology with KPMG nominating 18 of the world’s top 50 fintech startups being based in the British capital.

    Interestingly, the Belgium town of Leuven which has styled itself as a centre for 3D printing and beer features on the WEF list of European startup hubs as well.

    While it’s unlikely Europe can create a ‘Silicon Valley’ – even the post Cold War US would struggle to do so today – the presence of major centres like London and specialist hubs like Leuven indicates another important aspect of creating a global centre, that of having an existing base of businesses and skills.

    That skillbase isn’t built up overnight, it’s a decades long process of commitment from industry, investors and governments and often as much the result of a series of happy accidents rather than deliberate planning.

    It may well be the question of Europe creating a Silicon Valley isn’t really relevant with the bigger issue being how the continent’s cities and nations put in the conditions to develop long term industrial hubs. Trying to ape today’s successes for a project that will take decades to come to fruition could be a big mistake.

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  • Researching the next generation of wearables

    Researching the next generation of wearables

    The Obama Administration teams with Apple, HP, Boeing and others to develop a Silicon Valley based wearable tech hub with $170 million in funding reports Venture Beat.

    Over $17o million will be invested by the US government and its private sector partners in hybrid flexible electronics manufacturing research that may well underpin the next generation of wearable and embeddable devices.

    For the US, its success in the electronics industry is based upon its strong research sector. Making the investments today will help the nation compete as the technology landscape evolves.

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  • Getting fat on venture capital

    Getting fat on venture capital

    “Raising money is like ordering dinner,” says startup founder Geoff McQueen about attracting investors. “If you’re only a little bit hungry, you should only buy an appetizer.”

    McQueen was writing about his company, professional services platform Affinity Live, achieving its first round of funding. While the amount raised is a relatively modest two million dollars, the main gain for the company is getting some experienced business people on board.

    Unlike many of the high profile billion dollar ‘unicorns’, cash flow positive businesses like Affinity don’t need large swags of cash to grow. As McQueen points out, big investment rounds put pressures on management and risks the company’s culture changing “from one of discipline and taking on the world to one of comfort and entitlement”.

    Pushing out the owners

    Another risk for founders is they could end up diluting themselves out of the business they’ve built, as venture capital investor Heidi Roizen points out it’s possible for the creators of a billion dollar startup to find themselves broke.

    Roizen observes “venture capital is not free money. It’s debt. And then some”, something that’s overlooked by many commentators who think a fund raising – and the resultant valuation  – goes straight into the pockets of a company’s founders.

    Unless it’s Google Ventures doing the investment, it’s unlikely the founders will be buying Porsches after a VC round and usually the funding goes into growing the business. For many big name startups those capital needs can be huge as we see with Uber where reports indicate the company is currently losing two dollars for every dollar it earns.

    Beating the burn rates

    Most businesses though can only dream of burn rates in the hundreds of millions a year and their needs are far more modest illustrating McQueen’s point about excess capital.

    As we saw in the dot com bust it was the lean and focused companies that survived the downturn, there’s little to think the next industry shake it will be different. That’s why companies like Affinity Live and founders like Geoff McQueen will probably still be around when the dust and hype settles.

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