he question of whether or not Silicon Valley is still the best place to scale up your startup shows no signs of abating. Every city now seems to have a silicon something or other – whether it be London’s Silicon Roundabout, Berlin’s Silicon Allee or the Silicon Slopes of Salt Lake City.
My own experience with Zendesk, however, leaves me convinced that, at present at least, the original Silicon Valley remains the best place for budding tech startups looking to take their business to the next level.
There are many reasons for this. Some are economic – the EU is a smaller marketplace than the US. In fact, it isn’t a single market but a collection of many smaller markets, each with its own language and customs. This can make business difficult.
Beyond economics, however, there are deeply rooted cultural issues. Take Denmark’s famous law of Jante – an aversion to seeking or celebrating individual success. This undermines the imperative to think big and it’s a completely different mythology to that in the US. The American dream remains an irresistible draw for would-be entrepreneurs.
That said, things are changing in Europe. Take this recent study from the LSE, for example, which shows that despite popular perception some of the differences between the US and the EU are not as pronounced as we might assume. European startups raised more than $2.8bn in the last quarter of 2014 and are just as likely as their American counterparts to reach the hallowed ground of the Initial Public Offering (IPO).
Despite all this, there are still differences. According to Fortune Magazine, in 2013 venture capitalists invested $33bn in US companies – more than four times the amount invested in the entire European Union. The gap is even wider in the tech industry. Venture capital invested in US tech reached $8.67bn in 2013 compared with just $1.44bn in Europe.
So, what can Europe do about this?
There is still a perception of Europe as being overly bureaucratic, a perception that Europe sometimes reinforces. Take the EU’s tech-hub in San Francisco, catchily named the European Institute of Innovation and Technology Information and Communication Technology Labs (EIT ICT labs to friends).
Joking aside, it is this image that helps fuel opinions such as those of Peter Thiel, who recently commented that European regulations represent a “cure worse than the disease”.
Another thing holding Europe back is the persistent idea that failure is something to be ashamed of. This flies in the face of Silicon Valley’s fail fast, fail often mantra. Speaking from experience, failure has been a necessary and useful step on the road to success. For Americans, failure is a rite of passage.
Europe is taking steps in the right direction. In my home country of Denmark, for example, the likes of Podio are achieving great success along with a wealth of great startups, including Tradeshift, Unity and many more.
A bigger question for Europe, however, is: do you need to compete with Silicon Valley? Ultimately Europe and the US are very different markets with very different needs. There is no one size fits all when it comes to startup success. Take SongKick – a great live music startup based in London. London is the world’s biggest live music hub, so why would they want to move?
Ultimately Europe needs to recognise its own strengths and its own uniqueness. Silicon Valley and Europe face many challenges in breaking the vast new markets of China and other emerging economies. The question for everyone is not who’s the best, but how can we best meet these challenges?
The Internet is set for another revolution, much like the smartphone explosion of the 2000s. This revolution, the “Internet of Things” (IoT), will connect physical devices, such as air conditioners, appliances and lights to the Internet.
The IoT is generating particularly widespread interest due to its projected growth from $33 billion in 2013 to $71 billion in 2018. Like technology revolutions of the past, much of the market will be captured by new companies with innovative products.
We see connected-living startups pop up almost daily, but there are a few things that truly set successful IoT startups apart. So, how can you position your business for IoT success? Here are our top five tips:
1. Ensure your device tells a “story.”
Your product needs to tell a clear story that can both stand alone and also work well with other services. Consumers need to understand what specific need this product will serve, in their language.
The “connected lifestyle” is really a grouping of these individual stories -- a novel -- that work better together. However, average consumers rarely walk into Best Buy intending to purchase a full suite of connected products all at once. Instead, they focus on one need at a time.
The best way to handle this? Make sure that your product’s initial value proposition is crystal clear.
The Zen thermostat is a good example. Its initial use case was clear from the beginning: a simple thermostat that connects to the Internet. This clear value proposition coupled with the fact that setup was easy and the product already had an established team behind it (fact: Indiegogo campaigns run by two or more people raise 94 percent more money than campaigns by single individuals), made it a desirable and well-designed campaign from the gate -- attracting both consumers and press.
2. Plan your compatibility roadmap from day one.
Customers don’t want to invest in dead-end technology. They may not even fully understand the concept of the IoT when they purchase a connected device, but consumers have begun learning the value of combining several IoT devices together to increase their overall usefulness.
What many don’t know, though, is that multiple standards exist and that not all devices speak the same “language.” Thus, it’s critical that your product plays nicely with other devices and services.
3. Mentorship is even more important than you think.
Every connected product requires expertise in many different domains: hardware layout, standards interoperability, industrial design, distribution strategy and many more. Leveraging industry mentors will help you make the best product possible.
Mentorships can come in many forms: guidance through a crowdsourcing campaign, assistance with radio frequency design, navigation through complex certifications, and advice on distribution channel selection. Look to companies such as platform providers, chip manufacturers and business partners for this mentorship.
For example, you should know the difference between Zigbee and Z-Wave, and what each standard can offer in terms of distribution channels and strategic partnerships. Rather than relying solely on technical issues, startups should think through these types of implications to guide their connectivity decision. Mentors can help you navigate these multi-faceted issues.
4. Have a plan for handling privacy, security and data from the beginning.
Life is made better by sharing information, but as we share more and more data, you need to know how you’re going to protect it. Even technology goliaths have made privacy missteps, causing reduced consumer confidence and lower sales volumes.
This is certainly another area where mentorship can lend a hand. Partners can also accelerate your time to market by providing robust, safe, proven infrastructures that your devices can leverage.
5. Assume the person setting up your product knows little about technology.
The average consumer will not take the time to learn about technology in order to use a new device. Customers purchase IoT devices to make their lives easier, not more complex, so it’s important to ensure you are catering to novices, not early adopters. One of the most critical things to simplify and streamline: the set up of your connected device.
While it is most important to cater to the average consumer, technology enthusiasts are often early adopters. Since they fuel the early phases of your growth, it is also important to provide them with access to advanced configuration, customization and other features. Just don’t let those tech-focused features take center stage.
The future awaits.
Historically, upstart companies have had huge opportunities during similar technological upheavals such as the industrial revolution, the introduction of the Internet and the propagation of smartphones.
Consider the histories of John Deere, Oracle and Google. All of these companies grew exponentially due to technological shifts like the one we’re seeing with the Internet of Things. Give your company the best opportunity to take advantage of this huge market expansion by keeping these tips in mind.
You might not realize it, but some of the best new tools available for business owners today are being made by startups. Here are 23 tools and apps I love and use that could make your business better:
This is a lightweight Wordpress plugin that provides a one-stop solution for managing editorial calendars for blogs or websites that regularly publish content. It also automates social-media promotion when posts are published. Coschedule currently costs $10/month per website.
This service bills itself as “A/B testing you’ll actually use” and focuses on making testing as easy as possible. It allows you to track what you are actually interested in (as opposed to tracking information and data that you’re not going to use) and also allows you to set deadlines and run reports for specific timelines.
UserTesting records actual users as they view your app, website or other digital product. It records video of the user’s screen, and they are given tasks to complete on the platform being tested. They can create annotations for notes and also verbally give their feedback as they are working their way through the experience.
It offers a single video for $50, or pro plans that are $225/month for small businesses and $1,250 for enterprise businesses. The pro plans offer much more robust feedback and reports based on the user test findings.
This tool allows you to not only see your users’ behavior when they are using your online tools or apps, but it also helps you interact with them through popups while they are on specific pages or using specific features. This type of user interaction can help further your product development and customer service. Intercom ranges in monthly pricing packages from free to $99, depending on how many features you need.
Slack is an easy-to-use searchable-team communication platform that integrates with existing software that your team is probably already using, such as Dropbox, Google Drive and MailChimp. Slack currently ranges in price from free to $12.50 per user, depending on which features are needed. Pricing is based on an annual payment.
Fuze is a video and conference-call service that also allows users to type and send files during calls, record calls for later purposes and send participants calendar invitations directly from the app. It can be used via the web, its downloadable program (which is required for video calls), mobile app or via a conference-call number. The top-level plan also allows the facilitation of webinars. Its plans range from free (up to three call participants) to $40 per month.
Mailbox was created to optimize the email experience on mobile. You can swipe new emails to either trash or archive them, and can also schedule emails to reappear in your inbox at a specific period of time.Mailbox is currently free and available for iPhone, iPad, Android and a beta version for Mac OSX.
This app, currently only available for iOS, is a helpful optimized calendar that works with your existing calendar information (as well as the Internet) to make your life easier. For instance, it alerts you when you need to leave to make a meeting on time and automatically inputs conference-call codes to make dialing in easier. It has in-app purchases, but is free to download.
ZenPayroll aims to make employee payroll easy. It allows you to integrate with existing systems (such as human-resources platforms, invoicing platforms or insurance-plan management tools) to make employee management simpler.
Xero provides online accounting and invoicing services for small businesses and accountants or bookkeepers. It integrates add-on services such as popular payment, customer-relationship management and business tools such as PayPal and Salesforce. In addition, it integrates with your online banking, so you can automatically sync banking transactions. Pricing plans ranges from $20 to 40 per month.
This service is an online help desk that also integrates with your email, documents and other apps to make customer service as easy as possible. You can also use one user account to manage the help desk for multiple brands or domains, making it ideal for outsourced support desks or companies that own more than one product. It currently costs $15 per user per month.
This unique service is a tiny component of web design, yet crucial to the user experience. IconFinder helps you find the perfect icons for your apps, promotions or websites. You can either pay a per-icon rate or a monthly membership fee for its premium offerings, which are higher quality. There are also some free icons as well, depending on what you are searching for.
Drip describes itself as “marketing automation that doesn’t suck.” It offers marketing, trial and customer-email automation that makes campaigns easier. Once you choose an opt-in form, it walks through the automation set-up process, all on a lightweight platform. Plans range from $49 to more than $149 per month, depending on email volume, size of email list and desired features.
Canva makes great graphic design within anyone’s grasp. It has hundreds of pre-designed layouts, elements, fonts and image styles that make it possible to design everything from a great Twitter header to a flyer for your business. It offers free design elements, but also allows you to buy premium elements piecemeal, for about $1 each (at the moment). It also keeps track of all your designs in your account, so you can re-edit or re-download them as needed.
This service is a lot like If This, Then That (IFTTT), but for businesses. You can connect your well-known apps you are already using to automate your work process. For instance, every time you are assigned a new task in your company’s project-management platform, it will automatically create a calendar alert to reminder you to finish it. The pricing plans for Zapier run from free to $150 per month, based on the number of “zaps” (such as automated tasks) that are needed to run.
Buzzsumo is a content analysis and discovery tool to help you find out what type of content does best for a specific topic or industry. It also helps you identify influential online users that could help you promote and share your content. You can also research specific domains to see their social backlinks and which pieces of content are the most popular. Buzzsumo has a free account for viewing information, but the paid options (ranging from $99 to more than $499) allow you to export reports and alerts.
Related: 10 Affordable Tools to Help Online Entrepreneurs Succeed
17. When I Work
This tool (disclosure: I'm the vice president of marketing at the company) aims to makes scheduling hourly employees as easy as possible. You can create and send out work schedules for the next week just as easily on a mobile device as you can from your computer. Managers can text employees when their new schedule is out, and they can also request time off from the When I Work app on their phone. Plans range from $9 to $49.
BambooHR is focused on turning human resources back into what it is supposed to be: interacting with employees, not tracking data in spreadsheets. Its interface is focused on making data (such as time off, benefits and personal information) about employees easy to search and accessible by both the HR team and the employees themselves. Its pricing structure is based on the number of employees and ranges from $69 a month to $2,999 a month for 1,500 employees (beyond that requires a custom quote).
This is an edocument signing service that lets all parties sign a document digitally, while still being legally binding. In addition to an online platform to upload and send out documents, it also integrates with Google so you can upload documents that need to be signed right from Gmail. Its free plan allows for the signing of up to three documents per month, and $13 per month (when paid annually) for unlimited document signings, but one template. The $40 monthly plan allows for five templates and unlimited signatures.
This service allows you to “boomerang” your email to remind yourself to follow up with it at a later date. It will bring the email thread back to your inbox, making it great for following up with clients, sales contacts and other colleagues if they don’t respond. It has a free account that offers 10 boomerangs per month and also offer higher-level options from $4.99 to $49.99 monthly.
The CrashPlan from Code42 automatically backs up your computer’s files online with unlimited cloud storage (which is its main draw). The personal version starts at $4 per month and the family plan starts at $9. There are also custom quotes available for business backup plans.
Sqwiggle is a collaboration tool that is perfect for teams that are remote or have telecommuting members. Along with video and text chat, it also periodically takes photos of team members as they work (so everyone feels more connected), allows for easy file sharing and also utilizes minimal bandwidth (something Google Hangouts and Skype occasionally have issues with, according to some users). It offers a free plan, and also has two other plans that are $9 and $25 per user, per month.
This is a business intelligence-gathering tool that allows you to gather data from any source, as well as combine, analyze, visualize and store it. It allows you to combine data and information from other tools, such as Yammer and Salesforce. It doesn’t offer pricing options on its website.