Wall Street Journal: Location No Longer Determines Success
Oculus, the latest technology startup to be acquired for billions of dollars, was based not in Silicon Valley but in Irvine, California. Snapchat, which is rumored to be worth billions, is based in Los Angeles. The Los Angeles area is a good place to live and has great weather, but it has no real advantage as a technology center. These companies could have been based anywhere with equal success. You can’t predict which technology hub the next Oculus will come from—or whether it will be a hub at all. Anyone anywhere—whether in an incubator, garage or tent—can now build world-changing technology.
It used to be that venture capital was a prerequisite for starting a technology company. The software, hardware and disk storage needed cost millions of dollars. Entrepreneurs therefore had to begin their journey by writing a detailed business plan and pitching it to investors. Silicon Valley had a big advantage because of the concentration of venture capitalists on Sand Hill Road. But that is no longer the case, because the cost of technology has dropped exponentially. Entrepreneurs can beg or borrow the relatively small amounts of money they need from their friends and relatives. Or they can crowd-fund their startup, in the way in which Oculus did on Kickstarter.
U.S. technology hubs such as Silicon Valley also had a huge advantage in the past because of the concentration of specialized knowledge there. University towns such as Boston and Stanford are home to leading research scientists and entrepreneurs could listen to their lectures or meet them to ask questions. But an ocean of knowledge is now available on the Internet for free. In fact, more knowledge is available today on the Internet than was available to leading scientists and researchers as recently as 15 years ago, and now includes lectures by Stanford, Harvard and MIT faculty. Science and technology blogs provide more-timely and more-relevant information than scientific journals did because the journals were restricted to those who could afford subscriptions or who had access to libraries that did.
Hardware requirements have also gone down for businesses due to the relatively cheap cost of tablet computers and laptops and access to cloud service providers. That’s why Oculus’s Kickstarter goal was only $250,000 when it launched. In other countries, it could have been started for a lot less—especially if the entrepreneurs had been working from their homes and not taking salaries.
A lack of mentorship and networking holds back entrepreneurs in distant parts of the world. But they can learn from the experiences of CEOs, venture capitalists and domain experts on hundreds of specialized discussion boards that are open to all—sites such as StackOverflow, Slashdot, Hacker News, PoetsandQuants and Quora. Additionally, anyone can follow global thought leaders on social media and learn from them. They can email or tweet to people they read about.
Distributing a product is also easier than it has ever been because it is largely done over the Internet. People typically don’t even know the headquarters of the software or hardware companies they are buying technologies from. WhatsApp—which was the most expensive technology acquisition ever—was started in Mountain View, California, but it could just as well have been located in Ukraine, where its founder is from, or in Estonia, where Skype was developed, or in Finland, where the Angry Birds were hatched.
So entrepreneurs around the world have advantages today that a few years ago were specific to geographic location, meaning that the playing field is becoming level. There is no longer a need to find a way in to Silicon Valley or to the next Valley. Successful entrepreneurship still necessitates a prudent mix of wisdom, foresight, empathy, caution, balance, daring, toughness, knowledge and skill. But the external constraints are far looser than they used to be and an entrepreneur’s success is only impeded by her own limitations.