Dave McClure founder of the famed Silicon Valley venture fund 500 Startups has played a key role in investing in startups around the world. 500 Startups has been instrumental in amplifying the startups ecosystem especially in emerging markets making small bets on startups that the world would probably have never heard of.
But according to Dave, entrepreneurs and investors in these emerging markets have got it wrong in their quest to be like Silicon Valley. While on stage at Startup Istanbul 2015 he broke down reasons why we are getting it all wrong.
What’s Silicon Valley’s secret is a question almost everybody is asking nowdays. Speaking on what it really is he said “The dirty little secret is that Silicon Valley isn’t really a place, it’s a state of mind. It’s a belief in the face of insanity. It’s a belief that you will be successful in the reality of the story that 80% of sort of startups will fail.Probably more than 80% of startups”
Dave gave a classic example on what belief in taking risk is like in the Valley ”We are surrounded by crazy people who know the odds and still jump off the cliff. You look to the guy on the left that girl on the right, You know you guys gonna fail ! I’m gonna succeed! You jump up off the cliff.”
He underlines that the key factor in these acts of insanity is that they are not just individual, they are collective. And so doing individual acts of insanity might not be seen but doing collective acts of insanity is seen in fact it’s smart.
“We have to convince other people to jump with us we have to jump off that cliff together hopefully with different types of planes and hopefully one of those planes start to fly” Dave says.
However entrepreneurs in Turkey,Pakistan,Kenya and in any other emerging market are mostly heard complaining about the lack of capital for their startups. Dave had this cracking answer to them “The biggest problem is not usually a lack of ability a lack of capital or a lack of opportunity the biggest challenge is a lack of confidence in your head. You think you’re not as good as Silicon Valley entrepreneurs”
Key takeaways from his speech are that Silicon Valley is comprised of people who have come to the Valley from other places. They are no better or worse than us. They are us. The only difference is that they have the insanity and the confidence that they might actually win and we need to capture that mindset as well.
Meanwhile he also states that it’s easy to build a business anywhere than it was to build a business in Silicon Valley twenty years ago. Twenty years ago people also weren’t excited to build businesses at Silicon Valley.
To sum it up “It’s cheaper it’s easier there’s more customers there’s more opportunity get up your ass and get started.”
You can watch the whole talk here
Writer: Paul Njoroge