[an error occurred while processing this directive] (none) [an error occurred while processing this directive] [an error occurred while processing this directive] [an error occurred while processing this directive]

[ Home - Directory - Who's who - Mailing Lists - About Us - Sitemap - Social Events ]
[ Alumni - Management - Feedback - With Frills - Frames ]

Re: startup: Update on Swiss Innovation & Entrepreneurship!

DISCLAIMER: Any opinion expressed by a contributor is to be considered his/her own personal opinion, not the opinion of any other swiss-list member, the swiss-list website managers or the swiss-list committee.

[an error occurred while processing this directive]

Re: startup: Update on Swiss Innovation & Entrepreneurship!

From: Dirk Riehle <click for textversion of email address >
Date: Fri, 11 Feb 2005 10:29:43 +0100
X-Mailer: QUALCOMM Windows Eudora Version

Hi Pascal,

thanks for your email, and it is good to see SHARE in Boston is alive and

I've lived in Zurich, Boston, Silicon Valley each multiple years in a row,
but have now returned to Germany to start a company in Berlin. (I'm German.)

My explanation about what we seem to observe is somewhat different from
yours, so I'm offering it here in the spirit of a good discussion. If only
one could fully explain (and then copy) Silicon Valley...

US VCs primarily means Silicon Valley VCs, as far as I can say, and then,
later, Route 128 (Boston) VCs, and even later Austin and maybe North
Carolina or NYC. In other places of the U.S. people are as much struggeling
to get a startup of the ground as in Europe, using "funny" techniques like
Small Businesses Loans etc. (Funny only from a VC perspective.)

The one thing that distinguishes the valley from every other place I've
seen is this single-minded focus on technology and startups. It is a
monoculture in that respect! Sure, you have ancillary services, but outside
tech work, life seems rather tranquil and family-oriented to me, much
unlike the more hectic Boston, NYC, Zurich, or Berlin, with its many

What VCs in the valley (sometimes) provide is not just the money, but their
network and a certain professionalism that might do a startup well. This
makes it very hard for a SV VC to go other places, e.g. invest in Zurich:
No or little network, different culture, different legal system with no or
little experience of how bad investment scenarios play out. So they shy
back from it, understandably.

I don't think they shy back because they can't make enough money in
Switzerland. This only holds true for companies whose business is somehow
truly local. But most high-tech business provide products or services that
can be sold around the world.

In my opinion, the real problem for the entrepreneur is not one of
potential but one of speed of growth. If your sales organization initially
is local to Switzerland and that's where all your revenue is coming from,
scaling up the cash-inflows to get a high valuation is more difficult than
if you start out in a much bigger market. That's why a U.S. company with
the same business is likely to swallow a Swiss company with the same
business, and not the other way round. A good example is how eBay swallowed
so many other auction companies. The US market allowed eBay to grow faster
than any other auction business outside the US and that's (one reason) why
they won big time.

There are other things. In Germany, for example, the main issue as I
understand it now is not starting the company (there is a lot of support)
but funding the business adequately during the growth period. Here, the
German tax system eats you alive, so funding yourself through your cash
inflows is much harder than in other places.

But I would never doubt Swiss innovation and entrepreneurship.

(Hey, I'm in Zurich right now! Luxemburgerli, anyone?)


Dirk Riehle | DE 172 184 8755 | http://www.riehle.org
Take a Geek's Tour of Silicon Valley! http://www.ageekstour.com

Startup mailing list
Received on Fri Feb 11 2005 - 17:58:20 PST

[an error occurred while processing this directive]