12 Things You Need to Understand about the Silicon Valley Model before Using it in Other Markets
“This isn’t working, have to p out a way to get it right,” said this company’s head to a serial entrepreneur, who is also an advisor for his firm. Both are from the Silicon Valley. They have seen several startups grow and fail, so a win or loss isn’t new to them. Yetnone of the head’s investmentstrategies seem to be working in emerging markets. His situation is a common one. Many, like him, use the “cut and paste” method of Silicon Valley, hoping for functionality, and success in other markets, especially in emerging ones.
Here are 12 crucial differentiators that highlight no matter how much the emerging markets’ progress, they will still take time to catch up with the pace, culture and results of Silicon Valley. But hey, it’s not undoable. Investors and entrepreneurs in emerging markets can use these learnings as a starting point and set the progress rolling in their regional ecosystems.
Entrepreneurial experience matters
Entrepreneurial legacy and experience are at the core of Silicon Valley’s functionality. Entrepreneurs from the valley put their ideas through the crucible of deep review, testing, validation, and diligence before being presented to a venture capital firm (VC).
Broadband and technology platforms
Silicon Valley is the technology land, hence, the massive support for building platforms, technologies are also supported by high-speed broadband.
Tackling hyper-growth
There is an abundance of resources in Silicon Valley to support hyper-growth of a product or service for meeting market demands. Alongside, there are also specialists who can help a company tackle the problems faced while during the hyper-growth process.
Backup entrepreneurs for startups
There is a strong understanding in Silicon Valley that not all entrepreneurs can be successful at different stages of business. The skills for getting a startup started might be different from handling its scalability or making the ideas market-worthy. The pool of backup entrepreneurs helps VCs get in the right person in across various levels if their invested startups fail to achieve the desired scalability.
Regional and global growth capacity
Thanks to Silicon Valley’s well-connected network, there are minimal challenges or roadblocks in reaching out globally. The experience, executive capacity, and resources for rapid global growth are well known and staged for investments.
Active funder support for startup growth
If a Silicon Valley startup is facing a problem, the investors connect them with mentors. For funding they share a few contacts and startups lead from thereon. The continued support helps startups scale and address operational issues more efficiently.
Intellectual property Rights and sustainable differentiation
A secret sauce or sustainable differentiation is what separates the unicorns from others. There are several advisory and legal firms who help VC funded startups to develop and implement a strong Ip and differentiation strategy.
Strong network of mentors and advisors
The Silicon Valley has a capable pool of support for startups. 58003
Venture capital expertise
VCs in Silicon Valley have over decades of experience enabling them to identify a winning team. Most of the valley deals look promising with the right kind of team and product idea, yet only one in a thousand ideas have any likelihood of becoming viable and successful.
Data-oriented approach
For VCs in Silicon Valley to be successful, they need to get two out of 10 investments right. Right, in Silicon Valley means a 50/100/500- to -1 ROI. What sets the best VC returns apart from the rest of the world are their unicorns. The average internal rate of return they quote play a vital role in covering the remaining loss from other investments.
Access to supplemental funders
58003 Most cases, investors have knowledge of the next round funders and growth numbers they need to see in a fund for investing. They up their valuation games at each level accordingly.
Liquidation opportunities
There are a plethora of funds who specialize in picking up early investment equity for extended growth. There are investment bankers, legal firms, public markets, ready to help a VC and their investment get to markets.
In emerging markets, entrepreneurship is still in developing stages. The VCs have to work with entrepreneurs and the limited resources available, to make a start-up ecosystem successful. Right from funding, networking, and scaling, the startups must p out their growth charts. 58003
So now, what would you do differently while investing outside Silicon Valley?