The content of this blog-post was presented during the keynote titled “Success Favors the Prepared Mind”, I delivered last Friday (June 21, 2013) at the 2013 Endeavor Entrepreneur Summit, in San Francisco, California, USA.
What makes Silicon Valley[1] unique? Does the Valley’s success lie in its geography or in the mindset of the people who live here? While many of my posts focus on the Valley as a model to learn best practices and emerging trends, today’s post picks up the historical perspective of an earlier post published exactly one year ago — on June 29 2012 (http://carlosbaradello.com/2012/06/29/mining-the-silicon-valley-mind-a-perspective/). In this post, I share the ten attributes, which emerged over the past century and a half, which help to explain this region’s dynamism. Today, I expand on a new perspective on the required characteristics of today’s arriving foreign entrepreneurs to be effective and seize the opportunities that Valley offers.
I don’t believe it is Silicon Valley’s water or air that makes its people more creative, innovative or entrepreneurial than others. Instead, I’d like to share my perspective that the Valley’s entrepreneurial mindset has been 165 years in the making. In fact, this mindset has roots in Northern California’s infamous Gold Rush in the mid-19th century.
The early West Coast of the United States was largely inaccessible to the rest of the world. It was a harsh continental landscape away from the established East Coast, vast oceans away from Asia and Europe, deserts and mountains away from its even closer neighbors in Latin America. As a result, Northern California remained sparsely populated and isolated from the rest of the world for a long time, and people did not consider it worth the trouble to “Go West.” However, all this changed when gold was discovered in 1848.
Sailing to Northern California at the start of the Gold Rush
Northern California’s Gold Rush started in 1848. Among the first to hear news of gold were people in East Asia and South America, and many chose to immigrate. Interestingly, these migrants’ motivations were very different from that of migrants who had arrived from Europe to the American Northeast two centuries prior. While the Mayflower Pilgrims came to the New World seeking the political or religious freedoms denied to them in Europe, migrants to Northern California fundamentally sought economic rewards.
The personality profile of Gold Rush migrants consisted of two key attributes: (a) a natural self-selection of risk-takers willing to migrate over vast and harsh terrains, and (b) a no-nonsense desire for economic rewards. As a result, the region’s DNA was self-selecting: people who chose to “Go West” were overwhelmingly risk-taking, adaptive, flexible, tolerant of discomfort, and even ready to die in their pursuit of economic prosperity. Seen through another lens, these migrants in fact were quintessential entrepreneurs. These gold-seekers, called “forty-niners” (in reference to the year 1849, when immigrants arrived in large numbers), often faced substantial hardships on their journeys to get here. Once they arrived, they faced mining accidents, diseases, and in many cases, death.[2]
Today’s foreign entrepreneurs mimic certain characteristics of the gold rush migrants of the 1800s. Instant broadband communications keep foreign entrepreneurs connected to the Valley prior their arrival and keep them connected to home upon their arrival.
What is the mindset required for an entrepreneur to be World Class?
The unique characteristic of this rugged, dangerous and isolated terrain had an enormous influence on the early settlers of the “Wild West.” I have concluded that the key attributes of the Gold Rush mindset can be summarized with 10 key characteristics that capture the spirit of the early settlers. Interestingly, these characteristics are not in isolation. They have much in common with the enabling characteristics of the 21st century’s Silicon Valley mind.[3] Furthermore, I have added a third column to the original mindset table published one year ago. This column addresses the required characteristics of the foreign entrepreneurs today to fully benefit from Silicon Valley’s resources and opportunities.
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Northern California Dreaming: Key Enabling Mindsets in the Mid-19th Century & Now[4] and what it means for Foreign Entrepreneurs arriving today to the San Francisco Bay Area |
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Gold Rush Settler-Entrepreneurs in the Mid-19th Century[5] |
Current Silicon Valley Mindset[6] |
Characteristics required by Foreign Entrepreneurs to take full advantage of Silicon Valley |
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1 |
An independent and individualist mindset — evidenced by their willingness to defy the naysayers in their home countries.[7]Ecosystem: NatureCost of Risk: your life (and possibly your family) | The same individualistic and independent mindset is an essential characteristic of entrepreneurs attracted to Silicon Valley today.[8] | Pragmatic, confident and prepared to deal with the unknown — Willingness to defy naysayers in your home country. Become fully aware of what is required to perform, and prepare fully before arrival.Required actions before arriving:
Ecosystem: Innovation/Knowledge Economy Cost of Risk: your time (and possibly some savings and/or your investor funding) Be yourself: real and pragmatic |
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2 |
Risk taking mentality and tolerance of failures — the adversity was such that failing was often the norm and accepted, as leaving was not an option. | A climate that rewards risk-taking and tolerates failure — no stigma is attached to failure. | Readiness to deal with rejection, proven wrong, learn fast, adapt quickly, be energized by adversity — Recover quickly and no one remembers. Demonstrate ability to listen, by your “improved” answers incorporating feedback. If you persevere unchanged with your perspective, you better be right! Be ready to be humbled.Required characteristics:
You will be transformed from a big fish in a small pond to a very small fish in a very large ocean! |
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3 |
Diversity reinforced by openness — settlers were heterogeneous, arriving from across the world to begin their lives anew. | A high-quality and mobile work force — the Valley is a global magnet for talented engineers, scientists and entrepreneurs. | You are adding to the diversity, so be yourself! — Do not try to be what you are not. However, do play by the valley rules and business protocols. Everyone expects you to master pitching and networking, and play win-win at a hyper fast-pace.Required actions:
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4 |
Friendliness with an open mind — as a consequence of diversity and isolation. They were one of the few committed to do something really hard. | Open business environment — win-win exchanges of knowledge. Rapid circulation of ideas enabling free exchange of information and experiences. | Leave the non-disclosures and confidentiality agreements in your home country — Your best insurance policy is your brilliance and speed. Share as much as it is reasonable. It is likely you are not alone or the first to think on what you think is “the great idea”. However, be aware: the Valley is paved with great ideas!Required characteristics:
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5 |
Natural cluster formation in the mining sector — by necessity to specialize was to increase overall efficiencies. Distinctive features of Gold Rush towns included bankers, goldsmiths, miners and traders. | Collaborations among stakeholders — business, government and nonprofits develop a coherent infrastructure of information sharing.Specialized business infrastructure — Financial, Legal, Investors, Headhunters, Accounting, Consultants, etc. The most distinctive feature of the Valley’s ecosystem is its array of support services for new high-tech businesses, including over 30% concentration of US-based VCs and angel investors. | Partner, partner and partner — You cannot make it alone. You need help from many. Make explicit decisions on your value creation proposition (your uniqueness) and leverage the rest from partners in win-win relationships. The name of the game is to create wealth…. And share it!Required actions:
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6 |
Trial and error consciousness — the problems encountered had to be resolved locally with practical results. | Knowledge intensity — pro new ideas for new products, services, markets, and business models. The Valley generates the highest flow rate of ideas about information technology globally. | Global grand vision and great execution —You have already demonstrated in your home country. Do you have the right stuff to play in the global business Olympics?Required characteristics:
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7 |
Passion for success — it was more than economic success; Gold Rush settlers loved the chase! | Passion for success that is paired with a results-oriented meritocracy — Talent and skills are king. Age, ethnicity and seniority do not dictate opportunity or level of responsibility. | Passion for success — Your success depends on your
MIND + HEART + EXECUTION Required characteristics:
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8 |
Creation of wealth — not just money but creation of a community. | Universities and research institutes that interact with industry — rich sources of well-trained, experienced scientists and engineers willing to transform their knowledge into entrepreneurial ventures. | To get from the community you will have to give to the community — Your pressure to capture the window of opportunity is very real and your limited resources are omnipresent. Yet your success depends on others and the successes of others depend of you. You will be asking favors and you will be expected to return them.Required characteristics:
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9 |
Pitching as a way of life! — each Gold Rush settler was his/her best salesperson. | Pitching is the essential skill of an Entrepreneur[9] as he/she attempts to obtain the initial customers, employees, funding, etc. | Your Pitch is your currency — Like the early gold rush settlers you are the best sales person of YOU and YOUR VENTURE! Perfect Pitch = Content + Structure/Organization + DeliveryRequired actions:
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10 |
Eternal Optimism — overcoming the challenges was the only available option. | Favorable rules of the game — pro-business formation. | You will participate in the most sophisticated ecosystem on the planet —It depends on you to take full advantage of the resources and opportunities it offers!Required actions:
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Bonus |
An attractive place to settle with mild weather and abundant natural resources. Attracted initially by gold, but later most stayed. | High quality of life — a beautiful place to work, live and play. | The Bay Area is a great place, enjoy the ride and make it memorable! — Whether your venture succeeds or fails, this will be a memorable period of your life. Your start-up is important, but it does not define you fully as a person. On the contrary you define your venture, Therefore, enjoy the ride! By every criterion your stay in the Bay Area will be a period of personal and professional growth! Required actions:
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Every day, foreign entrepreneurs bring their ventures to Silicon Valley in their quest to scale them up globally. Their goal is to leverage the SV ecosystem’s advantages to catapult their ventures to stratospheric success. However most of them fail. Actually many fail because the nature of this endeavor is very Darwinian, but there have been many others that were never in the running because they were not properly prepared, or had misaligned expectations, or probably some of both. The objective of the table above is to bring into focus the evolution of the Silicon Valley mindset from its early gestation days to today and what it means for the arriving global “gold seekers” of the knowledge economy. In fact these ten characteristics will help the entrepreneurs not only in Silicon Valley, but anywhere. Furthermore, as these ten characteristics are embraced by many they will help to transform the local ecosystem in a more dynamic and effective. As a summary these 10 characteristics are:
- Prepare for the unknown
- Adapt quickly
- Be yourself!
- Openness brings rewards
- Partner, partner, partner
- Global grand vision
- Passion for success
- Give back to the community
- Your pitch is your currency
- Eternal optimism
Hundreds of ecosystems pursuing innovation and entrepreneurship are sprouting up throughout world, and each one is seeking to create its own color and texture, learning from one another and improving and adapting the Silicon Valley model to local characteristics, norms and codes. Most have wisely given up any effort to replicate Silicon Valley after recognizing that the Valley could not replicate itself even if it wanted, since the conditions that fostered its creation are impossible to replicate! Without a doubt, though, gears are in motion to create such a “Global Valley”. However, this will take probably decades — note that SV construction did not happen overnight – in the meantime globally minded entrepreneurs will seek to come to the Valley, as actors dream to go to Hollywood or athletes crave to participate in the Olympics.
What do you think? Do you agree or disagree? Let me know, especially if you disagree!
Until my next post. – Carlos B.
[1] In my posts I often use three terms, Silicon Valley (SV), the Valley, and the San Francisco Bay Area (SFBA) or simply the Bay Area interchangeably. [2] Levy, Joann (1992). They saw the elephant: Women in the California Gold Rush. Archon:N.p., pp. xxii, 92 [3] Adapted from The Silicon Valley Edge, Edited by Chong-Moon Lee, William F. Miller, M. Gong Hancock, and Henry S. Rowen, Stanford University Press, 2000. [4] http://carlosbaradello.com/2012/06/29/mining-the-silicon-valley-mind-a-perspective/ [5] This is the personal perspective of the author. [6] Adapted from The Silicon Valley Edge, Edited by Chong-Moon Lee, William F. Miller, M. Gong Hancock, and Henry S. Rowen, Stanford University Press, 2000. [7] In 1861, the telegraph connected San Francisco to the East Coast enabling cross-continental businesses and news-share; however, it had to wait until 1869 when the railroad connecting both coasts was completed to trigger the physical integration process to the USA. Still, the ten attributes described in the table below were so deeply rooted that continued to evolve becoming a distinguishing characteristic of this region. [8] This is not part of today’s 10 key enabling characteristics shown in reference 2. [9] This is not part of today’s 10 key enabling characteristics shown in reference 2.
Carlos S. Baradello 