How Silicon Valley's Glow Shines Beyond Its Borders
From Miami to Madrid and the Middle East, Silicon Valley-success stories have spread far and wide. Now it seems so have the top-dollar investments.
Thanks to a burgeoning scene of business incubators in countries around the world -- as well as a growing awareness that consumers outside the U.S. make up a potentially huge market -- international startups are increasingly attracting millions of investor dollars from the Bay Area and beyond. And while the money is helpful, many founders suggest that the guidance from Silicon Valley insiders is also critical.
Ahmed Alkhatib, the 34-year-old founder of MarkaVIP, recently secured $10 million in funds from investors in Europe, San Francisco and New York. The success of Alkhatib’s two-year-old, invite-only Middle East-centric shopping portal -- which initially launched in Jordan before spreading to Saudi Arabia and elsewhere -- can be attributed, in part, to his knowledge about what venture capitalists look for.
Investors want to see both an "amazing business plan" and "growth trajectory," says Alkhatib, who credits the Jordan-based business incubator Oasis500 with helping him develop these insights. More importantly, though, Alkhatib also spent 12 years in Silicon Valley, helping to launch e-commerce startups and watching some go under. "Being there in late 1990s, [I] was witness to many successful projects, as well as failures and lived through the bubbles and the busts,” he says.
Bernhard Niesner, the 30-something co-founder and chief exec of Busuu.com, an online language learning social network that boastsmore than 25 million users, recently also announced a sizeable investment. In October, the London-based company reported attracting $4.6 million in funding. He graduated from Spain's Venture Lab program, which is supported by the IE Business School in Madrid.
The incubator offers an open-floor design plan to spur collaboration, weekly networking sessions for treps and investors (with cerveza and snacks, of course), as well as a pitch night where the top concepts from students and alumni get presented in front of venture capitalists and others with deep pockets.
"Venture Lab is a program that sometimes goes far beyond the academic program," saysJuan José Güemes Barrios, chairman of the university’s International Center for Entrepreneurial Management. "Something we try to teach [students] is you don’t need much time or a big amount of money to prove if a startup may work or not."
Sometimes, all you need is guidance. Teresa Gonzalo, an alumna who graduated from Spain's Venture Lab and the IE Business School, has gone on to create Ambiox Biotech, which works on nanotechnology for AIDS prevention. As the 35-year-old considers creating a new venture that would help train medical doctors on the use of software tools, she is taking a page out of Silicon Valley’s playbook: She plans to incorporate a mix of sector specialists that include business experts and scientists.
"I would be the bridge between both worlds, and I have experience in that," says Gonzalo, who is still discussing details of a possible deal with her potential partners. "It is difficult, because although the language is Spanish mostly, it is a completely different language -- the scientific one and business one. Priorities are different."
Then of course, the field trips help, too. Some students from IE Business School recently visited Silicon Valley to see what starting up there might entail. Alexandra Esteve, who is finishing her MBA this month, found the experience particularly beneficial when it came to mingling with investors.
"If you have a startup, and you think it’s highly scalable, it’s a place to network, meet other entrepreneurs, engineers, programmers and investors," says the 28-year-old Puerto Rican who now lives in Miami. "One of the first rules of succeeding that we kept hearing is network, network, network."
Though she isn't saying much about her business idea aside from the name, CarBuckets, Esteve has raised $50,000 from friends and family so far. She was recently in New York City, where she was eyeing office space to roll her site into beta testing later this year before it launches to the public in 2013.
"If it works in New York City, I’ll go to Silicon Valley for two [to] four months to grow it," says Esteve. "I’ll be based out of Silicon Valley, hopefully for a little bit."
What Silicon Valley-inspired insights have you incorporated into your business? Let us know in the comments section.
Neil Parmar's work has been published in The Wall Street Journal, SmartMoney Magazine, The Huffington Post and Psychology Today, and he's been interviewed on CNN, ABC News, Fox News and radio shows in the U.S. and U.A.E. In 2012, former President Bill Clinton announced that Parmar was among one of three winning teams, out of 4,000 applicants, who won the Hult Global Case Challenge and $1 million to help SolarAid, Habitat for Humanity and One Laptop per Child. Most recently, Parmar was an assistant business editor and writer for The National, a newspaper based in the Middle East.