Startup ecosystems take time

Fred Wilson · November 10, 2009 · Short URL:

Think about 'decades' when you think about the development of new startup hotbeds

 Saul Klein, co-founder of Seedcamp and one of the top VCs in europe, has a long and thoughtful post up on the evolution of Seedcamp. In it he says:

In my mind, helping to bring some cohesion to our region's distributed network of talent, capital and is a 15-20 year project. ......

Getting to the right point takes time, and the cycles that kicked off what we now know as Silicon Valley began nearly 50 years ago.

Investing legends like Arthur Rock (Fairchild Semiconductor), Don Valentine (Cisco, Apple, EA), Don Lucas (Oracle), Dave Marquardt(Microsoft) and John Doerr (Netscape, Amazon, Google) and the entrepreneurs they backed created franchise businesses that still dominate the technology industry today. But maybe more importantly, all these businesses created the raw materials (talent, seed capital and technology) for next generation of the today's winners like Google, Facebook, and many many others.

I made the same point last week to Laura Rich of Fast Company who is doing a piece on startup ecosystems. I think it is good to think about decades when you think about the development of new startup hotbeds.

In the first decade, you are largely making it up, copying what works elsewhere, the VCs and entrepreneurs are largely doing it for the first time, and while you can have successes, they are mixed with a lot of failures. That was 1995 to 2005 in New York City and 1965 to 1975 in Silicon Valley.

In the second decade, you start to get it right. The entrepreneurs are doing it for the second or third time. The infrastructure has developed (lawyers, VCs, recruiters). And it is easier to get talented employees to do a startup. This is where we are in New York City now and is where Silicon Valley was from 1975 to 1985.

In the third decade, the ecosystem is fully formed and producing great companies. That is where Silicon Valley has been from the mid 80s on.

The only other startup ecosystem that is as fully developed as Silicon Valley is Boston. It got started even earlier than Silicon Valley with General George Doriot's ARD in the 1950s. Boston is an interesting case study because although it has all the infrastructure in place and plenty of serial entrepreneurs, role models, and success stories, it has had a harder time making the transition from tech deals to web deals. It is getting there now.

So back to new startup ecosystems developing in europe, asia, and elsewhere. It can happen and it will happen. But it takes time. And you can't fast forward because we are talking about experience which can't be manufactured. You simply have to put in the time.

(For more from Fred, visit his blog)

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