Bet on the Racehorse and not the Jockey

The title of this post is obviously the opposite of the well worn cliche I like to use when describing how we invest. It's always about the jockey. You could have a three-legged horse called tri-pod and with the right jockey on it, it would win races. (Or at least you get my drift!) At the same time, one of the things that I hear often discussed lately at events and with entrepreneurs is "how do we get a Valley like culture in place here in Germany or Europe?" Well, first and foremost you need the right people. I think it's great if the universities support spin-outs and create incubators. It's also great if money is available to fund these start-ups and so on and so forth. Yet without the right people, nothing is going to get better. Someone was on stage yesterday at the Red Herring 100 event talking about the German venture environment and basically, as most presenters, they pointed to the Valley and said "we need that." To be honest though, I highly doubt when people went out to the Valley they looked elsewhere and said to themselves "let's copy that model." They simply created an environment (over years time) which is optimal for starting companies. They didn't whine about how difficult the environment was to launch projects. They also didn't complain about how difficult it was to find someone to finance these businesses. They sure didn't complain about the level of salaries either. They simply wanted to make things happen and did so. As long as this mindset doesn't get ingrained in European minds, it's going to be tough going. At the same time, there are shimmers of light. London has done well to get a decent investment culture in place. Munich in Germany was always a center of venture activity. Now Berlin is strongly positioning itself. People have learned and there are folks really getting things done. Yet we need more. More entrepreneurs who go for it. More VC's willing to place investment bets early enough to get as many companies off the ground as possible. We'll also need the LP's who believe in the region and invest in the venture capital asset class in Europe. The media and bloggers have to finally stop whining about everything in the start-up world. Complaining about how crap start-ups are and forecasting their doom and gloom sure doesn't help much. Finally, we need the people who re-open exit channels for start-ups by buying companies. It's all about the people, the jockeys steering the horse. We're getting there but it's going to take some more time.

Comments

[David]

Great post, Paul. Reblogged a bit originally posted by Philipp:
http://echolot.tumblr.com/post/92194935/the-media-and-bloggers-have-to-finally-stop

[Stephan Schmidt]

Having been a founder during the .dot boom in Berlin and now working again in a startup in Berlin, I have the feeling a lot of things have changed. There is a startup culture here now, which is much more promising than 2000. Back then it was more about parties and having fun, it's much more serious now. I like it.

Cheers
Stephan
http://twitter.com/codemonkeyism

[Paul Jozefak]

Thanks David!

Stephan, I agree. Berlin is the most vibrant region in Germany in my opinion when it comes to start-up culture. One thing people need to get ingrained in their heads though is that it's about building great companies and not about being an entrepreneur. There's a difference there!

[Florian Komm]

Very true!! I'm following the entrepreneurial scene in Berlin for quite some years and I think you're right. We are getting there - slowly.