SILICON Valley has become something of a mecca for talented entrepreneurs looking to make their mark. As a professor teaching them, I have had a ringside seat as some of the most driven businesspeople on the planet slug it out. Life here is not all billion-dollar valuations, poolside parties and drinks with venture capitalists, however. An intoxicating blend of innovation, money and cutting-edge technology means the story is told with a liberal dusting of magic.
So what can the rest of us learn from the thinking and personalities of Silicon Valley? To answer this, we need to strip away the veneer and focus on a mindset forged in an intense competitive environment.
A CLEAR PROPOSITION
The first lesson is the danger of distraction. It’s a familiar workplace problem: with so many personalities seeking to bring their ideas to the table at 1,000mph, focus on the end user is often forgotten. In the Valley, a surge of venture capital and a growing appetite for risk all too often combine with a highly effective pitch (a common skill these days) to seed companies that don’t concentrate on the customer. People fall in love with ideas, not businesses.
The companies that do succeed are those that deeply understand and empathise with their target user to deliver a clear proposition. There are a few that can dictate to their users (offering a bite of a tempting Apple, for example), but this is the exception rather than the rule. Failure comes because a grand vision, which leads them to try and offer everything, is preferenced over value.
BEYOND A “CAN-DO” ATTITUDE
These big visions often kill many of the region’s young startups. A “can-do” attitude gets many firms to market, but the enduringly successful ones are those that have also worked out what they “should do”. In spite of the Valley’s legacy, and company valuations that many think are still on the high side, having a clear business model with a route to profitability is the norm for most successful new ventures. A can-do attitude is a trait observed alongside success, but only because it is a necessary condition for it – it is definitely not a sufficient one.
DON’T UNDERESTIMATE DECISIONS
The third lesson is the importance of decision-making. In the entrepreneurial process, while research and planning is crucial, Silicon Valley’s increasingly concentrated business cycle demands the most nimble, yet calculated, judgment and execution.
This is where the most successful entrepreneurs really earn their stripes. The best prove the value of being able to set clear, long-term objectives and weigh up risk effectively against these, while also taking decisions based on a range of opinions and other data – all under considerable time pressure. That is no mean feat.
For this reason, beneath the skin of the typical entrepreneur is often a stressed individual under intense pressure to pluck the right choices from a plethora of information. Just like the rest of us, these people have no innate intellectual ability that allows them to glide through work. Behind the facade, company founders are often holed up late into the night, sweating over their next move.
FIVE KEY INGREDIENTS
For all the hyperbole, Silicon Valley excels at bringing together bright talent and providing business opportunities. The media rarely hypes how well it does teamwork, planning, learning from those around you, a passion for execution and hard work. Whether you’re in a fast-growing startup or the corporate world, all the free candy and table football in the world won’t replace these five elements.
Yossi Feinberg is a professor of economics at Stanford Graduate School of Business, which has just launched Stanford Ignite-London. Applications are open until 2 June.
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