Here’s why your country doesn’t have a Silicon Valley – and that’s ok
It’s not uncommon for cities or regions to publicly profess their plans for building the next Silicon Valley in their backyard. We’re heavily investing in "startup ecosystems" around the world but rarely do we stop to ponder the hidden assumptions of Valley-style startups. Are these high risk, winner takes all ventures a feasible model and – perhaps more importantly – something to aspire to in different cultural contexts?
Based on my experience with trying the Valley-style startup model in a small European country, I argue that it’s time to question the prevailing startup narrative and explore alternatives that will draw their strengths from our cultural characteristics instead of fighting against them.
The invisible assumptions of culture
It’s tempting to think that globalization has established a homogenous global McCulture. After all, we now all binge the same shows on Netflix, argue about the same things on Twitter, share the same memes. While values and attitudes do change over time, you only have to look at the news to see that we aren’t over our national cultures just yet. Even the supposedly diversity-embracing European Union now has a commissioner in charge of “Protecting the European way of life”.
Geert Hofstede describes culture as "the software of the mind" that we unconsciously pick up from an early age from family, school, peers, media and other sources as we learn what’s expected of us and what’s considered acceptable in our society. For instance, should you blindly accept orders from superiors and other authority figures or is it ok to challenge them and discuss them openly? Is it better to work together and make sure everyone’s included or should you always prioritize yourself? Do you live to work or work to live? Is it ok to give direct feedback and ask for what you need or is it considered too blunt? Does the host expect you to arrive at a dinner party precisely on time or will everyone be at least half an hour late?
Yes, there are personal differences in how you answer such questions, but deep down we all have a sense of what’s normal and expected in the culture we grew up in. The tricky bit is that we don’t even realize we have all these collective assumptions until we come in contact with groups – and corresponding expectations – that are different from ours.
The hidden cultural assumptions of startups
Even though we also have different cultural assumptions about workplace dynamics, we somehow decided that startups are the way to go when it comes to building new businesses. The assumption is that everyone in the world wants and should aim to f(o)und the type of fast-growing and high-risk ventures that Silicon Valley is known for. Blinded by growth hockey sticks, we ignore the highly individualistic cultural context of the Valley and fetishize startups in our national strategies, election campaigns, media coverage, and elsewhere. Young entrepreneurs dream of being the next Steve Jobs, Mark Zuckerberg, Elon Musk. The narrative is: if you want to change the world – and get rich in the process –, you must found a startup.
I get it. “Startup” is such a sexy word that we don’t even bother translating it in other languages. A sexy, universal shorthand for innovation and growth. I do, however, worry that by calling every new venture a startup, we unload a bunch of unrealistic expectations on entrepreneurs. Like the need to work insane hours, chase 10x growth, and seek venture capital; and on the consumer side, the willingness to embrace products in perpetual beta. This kind of model might make sense in the US – or, more specifically, Silicon Valley – given its values and practices, but why should the rest of the world play the same game?
Let’s do an experiment. If you’re reading this from any other country than the US, go to this country comparison tool and compare your country’s culture with the US (see example comparison for Slovenia and US). Chances are, you’ll notice quite a few differences. Obviously, this doesn’t mean that every individual from a particular country will fit the cultural profile perfectly, but it does mean that differences in values, attitudes, and expected business practices will emerge in larger groups.
In practice, this means that you can’t expect management approaches that have been pioneered in a different cultural context (mainly the US) to work equally well in your country. I have first-hand experience with trying out US-based management advice on our side of the Alps, and I can tell you it was working far from advertised, even in a smaller company in which our company-level culture was still being formed.
Is Silicon Valley the only way?
How do we rethink startups outside Silicon Valley then? Elsewhere in the US, companies like Basecamp are choosing to stay small and are literally writing the rulebook for calmer businesses. In Europe, we can look to the Swedish Ikea for an example of a company that took their sweet time to expand internationally and takes social responsibility seriously. Despite ups and downs, Danish LEGO is still a family-owned business that is still innovating. And there are countless other types of successful businesses that don’t follow the startup rulebook, aren’t household names, yet manage to provide steady employment and create value.
Getting over startups
Raising insane amounts of funding shouldn’t be the ultimate goal or a sign of success for a young company. Having more Valley-style startups – with an almost guaranteed 90% failure rate – isn’t going to create enough jobs to provide a decent living for most people, improve our well-being, reduce inequality or tackle the challenges of climate change. We keep forgetting that innovation doesn’t equal startup, that it doesn’t have to be global to be meaningful, and it’s becoming clear that the whole "moving fast and breaking things" creed wasn’t such a great idea after all.
Here’s what I propose:
Let’s start by acknowledging that startups are just one way of doing business – and not necessarily the most desirable way.
Let’s come up with new, sexy words to differentiate other ways of building businesses or creating impact to avoid the cultural baggage and assumptions that are attached to the word startup.
Let’s also explore ways to celebrate and nurture "startups" that don’t play the startup game but find new ways of creating value and strengthening their local communities.
To put it another way, instead of grooming lonely young trees that will greedily grow fast and tall and be vulnerable to the first major storm, let’s find ways to seed resilient forests by figuring out what makes our soil unique and playing by our advantages. Let’s draw from our values to innovate instead of imitating a unique set of circumstances from a faraway forest filled with mythical creatures. After all, even Netflix is discovering the value in storytelling from different cultures, why are we so afraid to do things differently in business?