The Europeans invade Silicon Valley
In a bare office in downtown San Francisco, European bureaucrats wearing suits and ties cleared their throats and spoke about the glory of European innovation and American investment. They were launching a new Silicon Valley hub that they hoped would get European start-up talent American funding.
To celebrate, they snipped a ribbon unfurled across the stage and assembled a foam puzzle showing the European Union and US flags. The audience checked their cellphones.
The event, with its long Chamber of Commerce-style speeches, highlights the disconnect between Europe and Silicon Valley. Although Europeans are trying to emulate the U.S. tech industry’s success, they still have much to learn – starting with the need to loosen up, in keeping with the region’s free and easy vibe.
“If Europe took a selfie, it would be an old lady,” Mauro Battocchi, Italy’s consul general, said on stage.
The new tech hub, which formally opened in September, is intended to showcase the best of European innovation at a time when American technology by the likes of Google, Facebook and Apple dominate. The overseas start-ups will need to prove that they have something new to offer Bay Area investors who have plenty of other options to choose from.
There’s a good reason for the Europeans to look for money in the Bay Area tech scene. In 2013, venture capitalists invested $33 billion in US companies, according to Dow Jones Venture Source. That’s more than four times the amount invested in companies in the entire European Union.
The gap is even wider in the tech industry. Total venture capital invested in the US tech industry reached $8.67 billion last year compared with just $1.44 billion in Europe.
The new European hub is hosted in a co-working office in downtown San Francisco called Rocketspace, which is already home to incubators for Canada, Brazil and Spain. Start-ups from all over Europe will be invited to work out of the office, get training and participate in events, at no charge.
In typical bureaucratic fashion, the organization sponsoring the hub has a mouthful of a name: European Institute of Innovation and Technology Information and Communication Technology Labs. The hub, itself, is known by the acronym, EIT ICT Labs, which shows just how desperately the organizers could use help from Silicon Valley’s marketing gurus.
A number of countries already have start-up incubators in Silicon Valley including Germany, France, Spain, and Italy. They offer services ranging from mentorship, education classes, and networking opportunities. However, EIT ICT Labs says it will distinguish itself by drawing from start-ups all across Europe, and this rather than any other major program offerings seems to be their major selling point.
“We can pick the best of the best and make the selection process more streamlined,” says Paul Campbell, the Silicon Valley advisor for the hub.
Yet, others aren’t quite sure of that will be enough of a distinction.
“It’s hard to say if this is another European outpost,” said Bernd Girod, associate dean of online learning at Stanford University and who also teaches electrical engineering. “It could be big if they get some excellent smart people. They have the money to succeeded, but money is not all that success takes.”
EIT ICT has a 2014 budget of $300 million Euros ($381 million), but won’t discuss its specific investment in the San Francisco hub. So far they have leased four desks for European start-ups to use but haven’t specified how they intend to choose the start-ups or who will fill the desks.
“We need to show that we’re a strong ecosystem to invest in,” Willem Jonker, the CEO of the European group, said in his speech at the event.
However, the event’s formality made attendees skeptical of EIT ICT Labs’ ability to bridge the cultural gap between Europe and Silicon Valley. During the speeches and panels, most of the entrepreneurs mingled at the bar where, their chatter making it difficult to hear the speakers.
“We’re quite embarrassed,” said Dr. Anne Bruinvels who came to pitch her Dutch start-up Px Healthcare which uses cancer patients’ data to create personalized treatment plans. “We believe that Europe is far more dynamic than how it was represented today. I hope they are open to listening to feedback. With our input they could possibly create a lot of impact. Without it, it could fail and that would be a terrible waste of the investment.”
Yet despite the lackluster enthusiasm for the speeches, the energy perked up during the pitching session. Start-ups were given a few minutes to present their business ideas to a board of judges who gave them feedback, American Idol style. And, like on American Idol, attendees cheered whenever someone made a particularly good pitch.
“I love the vibe in San Francisco,” said Glenn Bilby, an Australian based in Sweden who came to pitch his start-up, Quick Posture, a tool that lets doctors diagnosis a patient’s movement and posture problems. “It feels like anything is possible. This must succeed.”
And perhaps, if the agency manages to lose the tie and roll up its sleeves, it will.