In the last week I read that a Finnish entrepreneur in Silicon Valley had commented on Finnish TV that “Silicon Valley is the NHL for a technology entrepreneur.” He meant the it is the elite series of technology entrepreneurship. I know he is an excellent entrepreneur, got good funding and his example is important for many others, but at the same time I started to wonder whether this comparison really makes sense. At first I thought it was a quite narrow way to see entrepreneurship, but then I thought more and came to conclusion that it was actually very good comparison, but maybe in a different way than he thought.
For those who don’t know, the NHL (National Hockey League) is a professional ice hockey league in the USA and Canada. It has been the best-known hockey league in the world and also attracted a lot of top players from Europe to earn excellent salaries. Now another league, KHL, which has teams from the former Soviet Union region has taken a more important role in professional ice hockey and as well as having top salaries, but it is still behind the NHL.
Why was I skeptical and why did I finally like the comparison? I was skeptical, because I see it as important to see entrepreneurship in a much broader context than only startups that target VC money in Silicon Valley. There are a lot of small companies that never get or target Silicon Valley VC money, but they create work, a living and products for many people. There are also many international growth companies that are not in Silicon Valley, but they build excellent business e.g. in Europe and Asia. Some companies grow more organically (i.e. less risk investments), or they are not VC fit type tech firms, or entrepreneurs just found another route to build the business. I believe it is wrong to say to those entrepreneurs that entrepreneurs in Silicon Valley are the elite.
But then I thought about it more. I realized ice hockey is somewhat of an important sport in about 10 countries in the world. Many people in the world have never heard about the NHL and they don’t follow ice hockey, but they still are interested in sports. If you play football, rugby, basketball or another sport, you don’t target to go to the NHL, but you can still target a global top league in your series and you can still make a lot of money. There are companies that build huge business in the Asian market, there is Rovio (Angry Birds firm) that has grown in Finland and there are companies that sell services or products that are not for VC funding. Actually e.g. as a football player or golfer you can make much more money than NHL players and there are emerging Eastern markets like KHL in ice hockey.
Now I’ve started to like the comparison. There is one type of entrepreneurship where Silicon Valley can be the top series, but there are many other types where you can still get to the top in other places and in other ways. At the same time, we must not forget all these people who don’t target to be global #1, but they are sport people because they love it and it is their lifestyle. The same can be said with entrepreneurship. Many people run smaller businesses that are important for themselves, for their employees and customers, and for the local economy.
My point is not really to criticize or analyze the NHL comparison, but that the comment just triggered me to think about entrepreneurship on a larger scale and this is something I have thought about many times. Many countries want to promote entrepreneurship, startup ecosystems and risk funding. It is good as such. I just want to highlight the importance of remembering that there are many different models to create new companies and to grow them. We might also be limiting it too much by talking only about Silicon Valley type models. There could be many potential entrepreneurs that feel that they or their idea don’t fit to those models and give up. Silicon Valley is an excellent place for some companies and its model and attitude can be a good example, but if we really want to get global growth, work and happy people in startups, we must emphasize that there is not just one right model but are many right models to do it.
One more aspect is the funding market. Friends and family funding is more money than VC funding in the US and it is for many kinds of companies, not only for Silicon Valley tech companies. Crowdfunding, when it properly opens in the US, probably will not really compete with VC funding, but help companies that otherwise would look for bank loans or friends and family money. This is what Congressman Patrick McHenry also emphasized in the Grow VC podcast and if we look at the global IPO market, Silicon Valley doesn’t dominate it. There are many kinds of companies with many backgrounds that make IPO’s (some IPO statistics). Hong Kong has been the largest IPO market several times since 2009. These are just a couple of examples that the money is not only in Silicon Valley companies. Actually, this is a part where some Masters or Doctorate students could make more research work of how investment money comes to different kind of companies in different phases.
I know sometimes it is good to simplify things to get attention and it is good to have role models for young people and I believe Silicon Valley success stories can be good for this. At the same time when we think of the local or world economy, how to create work, and how to encourage people to start companies and be happy entrepreneurs, that there are many models to do it and it is important that governments, universities, investors and other relevant parties can support different kind of models. This is also a part of our Global Virtual Silicon Valley concept; entrepreneurs, investors and other parties can work globally together. Only in that way we can have a real impact.
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This entry was posted on Tuesday, June 12th, 2012 at 2:08 pm and is filed under Entrepreneur Inspiration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.