‘Everything that makes startups thrive, makes a small country thrive too,’ says venture capitalist Steve Jurvetson.
Currently there seems to be so little happening in Europe, apart from the Nordic countries and the UK. Plus maybe a little bit of activity in Germany, laments Jurvetson. ‘The world is full of budding technology centres, who talk the talk, but with little chance of success. Most of the “venture capitalists” there are actually risk-averse bankers. They do not have the necessary critical mass to prosper,’ he goes on.
‘Places such as Skolkovo, Chicago and Salt Lake City,’ Jurvetson expounds. ‘None of these are likely to break through.’
‘Location is important because the core team of a budding startup needs to be in the one place. Sure, distributed companies have been successful, and you can always work from somewhere in a more remote location like the countryside, but you will not benefit from the teamwork dynamic or being connected to a network if you do that,’ he explains.
Technology centres are now thought of in terms of cities rather than countries as Jurvetson gives an example: ‘build some kind of an incredible inter-city connection, such as a Hyperloop between Helsinki and Tallinn. This will create a centre similar to Silicon Valley, which links San Francisco and the San Jose.‘
An easy commute between Tallinn and Helsinki might make all the difference for finding the necessary talent. ‘Think of a situation where you have a fantastic team but you need an experienced VP of sales. If Helsinki were within easy access, they could shuttle to Tallinn in half an hour,’ he goes on.
The economic prospects for small countries such as Estonia has never been better, Jurvetson emphasizes: ‘We are moving into a time when smaller teams can have greater impact than ever’.
This is the opposite of the industrial revolution where economies of scale allowed the large get still larger. In the information age, a small country with a well-educated workforce now has an advantage in a way it did not before.
Success during the industrial revolution demanded a huge amount of capital, in order to invest in facilities, equipment and workers. The level of education was not of much importance. No longer are manufacturing and foreign trade the future.
‘We are entering the time of mental horsepower. Everything that gets startups to prosper, gets a small country to prosper,’ Jurvetson continues.
The largest Nordic Achilles heel is the lack of early-stage investors, however. ‘They think too much like bankers, are not entrepreneurial and do not take risks’, Steve says.
The likes of the Swedish Skype co-founder Niklas Zennström are truly an exception. Others try to protect themselves too much and are afraid of losing their reputation by making a bad investment. ‘I’m like a kid in a candy store,’ says Jurvetson, who continually hears pitches from some of the most utopian entrepreneurs in the world.
But if you are planning yet another ‘me too’ solution, don’t bother. Jurvetson is only interested in innovation on the frontier, the most difficult and impossible challenges, such as deep learning, sustainable transport systems and synthetic biology.
Computers will very soon operate much the same way as the human brain, but they are capable of so much more, he says. ‘I am most excited by things that have not been done before. I strive for the new,’ he goes on.
Venture capitalists are the hub of Silicon Valley. They ensure that the best ideas can receive the funds needed, and draw together talent and other resources. With their finger on the pulse, they often coach their companies and don’t simply fling money at them. The Nordic countries are great at building distributed systems and are effective with small-scale resources, Jurvetson says. ‘Soon the whole world will be online via new satellite broadband technology, creating a service which can be used in the most inexpensive mobile phones, with a voice interface. This will gain a huge new market in five years,’ he predicts.
Source: Life in Estonia