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Can Silicon Valley Startups Flourish Outside Silicon Valley?

Usually when people think about silicon valley they think of romantic pictures of daring entrepreneurs starting boldly trying to change the world by working on projects from their modest garages. This is not surprising considering the story of Steve Jobs and other silicon valley giants like Hewlett Packard, but the reality is that most silicon valley startups don’t start in a garage. In fact, many of them don’t even start in the minds of hungry entrepreneurs that got hit by the strange vision of the future. The reality is a bit more mundane and more banal; the reality is that many silicon valley startups start out in the minds of business plan writers.

There are many startups that are cranked out like they were produced by a cookie cutter system and they are produced not so much to change the world but to get funded and to go through the venture capital funding system. I’m not knocking this hustle. There are many players playing this game and for many, it paid off quite handsomely. We’re talking about several billion dollar IPOs and lots of yummy venture capital funding. With that said, the whole atmosphere for the whole startup development process in silicon valley has matured quite a bit over the years. It has become more bureaucratized and it has become a little world in of itself. It’s kind of like a system supported by smaller systems that feed into each other and one can easily think of silicon valley as these large network of interconnected networks of individuals. It’s somehow like a local brick and mortar version of Facebook but instead of your friends liking your posts or your funny pictures, your friends are throwing money your way and you are throwing money and influence their way. It can easily become quite incestuous.

While many critics could have a lot to chew on regarding how silicon valley is currently put together, it is a successful model. There are many millionaires made every single day in silicon valley. I’m hard-pressed to find another place on the face of the planet who can produce the same amount of wealth of such startling efficiency. Even China doesn’t produce as many millionaires in such a concentrated space and such a short period of time as silicon valley. The question that begs asking is, “Can silicon valley startups flourish outside silicon valley?” As mentioned above, silicon valley has this interlocking support system and your lawyer can lead you to your banker who can then lead you to more venture funding and those venture capital guys can lead you to your next CEO or CFO. It’s all interlocked and it kind of makes one wonder whether this kind of system can exist outside of silicon valley. This is not an academic or a shallow question because silicon valley doesn’t have a monopoly on the next big tech idea that would change the world. The next big thing might come out of Singapore, Hong Kong or even The Philippines.

The problem is not the idea but whether it has the support structure that can make it happen and whether there’s enough financial, legal and intellectual property infrastructure supporting the idea so it can live up to its full potential. This is a key question because many startups are beginning to pop up in Singapore, Hong Kong, Korea and Eastern Europe. Without silicon valley’s infrastructure, can these startups survive? The answer is yes but “yes-but”. Yes, the startups can survive. The idea is hot enough and somebody will throw money at it. The “but” part is how much money? You have to remember silicon valley has perfected the art of venture funding. These are companies and individuals that won’t flinch if they are hit up for several million dollars and they are asked to fund an idea written at the back of a paper napkin. As you can well imagine, these individuals and organizations are few and far between. Can a hot idea be funded in Singapore? Absolutely. Can it be funded enough where it can become a full fledged business and make a lot of money and go public? That’s the open question.

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