By Eric S. Quon-Lee, French Tech Hub’s mentor and Director Visa Performance Solutions at Visa
As the shockwaves from the affirmative Brexit vote start to dissipate, there has been increasing chatter concerning the fate of London as not only Europe’s financial services hub but also for startups as well. While Dublin, Berlin and Madrid are all strong contenders in the race for startup ecosystem supremacy, London by far is one of the strongest, particularly in the fintech sector.
Analysts have not only been wondering about the viability of London in general post-Brexit as a world-class city but as a global startup destination. Indeed, those same analysts are wondering what are the factors required to create self-sustaining and vibrant startup ecosystems?
There is no doubt that this is a hot topic as nation-states race to attract startups and their associated talent to ensure they don’t lose out on the transition from an industrial economy to a knowledge-based one. Indeed, countless papers and articles have been written by academics and journalists concerning what is required to have a truly vibrant startup ecosystem. From the number of educational institutions to the walkability of a city to government incentives, there have been a number of tangible criteria thrown about concerning what are required for a self-sustaining startup ecosystem to thrive.
While there is no doubt that these tangible criteria are foundational elements to creating a thriving, self-sustaining startup ecosystem, there are a number of significant intangible criteria as well that are essential. Indeed, one of the most infuriating elements of startups for policymakers is the fact that there are very few neat quantifiable metrics or processes that can be used to create vibrant startup ecosystems.
Nation-states around the globe have thrown vast amounts of government incentives and infrastructure to build their own version of Silicon Valley but ultimately have not achieved the same level of success. A significant driver of this less than optimal success are the intangible factors that make Silicon Valley and other successful startup ecosystems so hard to replicate. These intangible factors include:
- Open & Accepting Culture: The biggest contributing intangible factor to startup ecosystem success is the existence of an open and accepting culture. No one culture has a monopoly concerning new innovative ideas and Silicon Valley proves that. Whether an individual is from Asia, Europe, Africa, North America, Latin America or the Middle East, ideas come from everywhere and anywhere. The critical element is whether a culture is willing to accept those new ideas free from bias and stereotypes and purely on the idea’s merits. In other words, will resources be allocated appropriately based on an idea’s freestanding merits versus on the ethnic, cultural age, or gender background of the team pitching the idea?
- Open Mindset: A complementary element to an open and accepting culture is that the individuals within the startup ecosystem have an open mindset. The second biggest barrier to not only startup ecosystems but startups in general are individuals who are part of the broader society and economy not having an open mindset. What is an open mindset? In many respects, it is a willingness to at least listen to new ideas solely on their merits and to debate them solely on their merits versus automatically deciding the idea has no merit due to inherent resistance to change. In many respects, the biggest factor that individuals have to overcome on a daily basis to adopt an open mindset is a resistance to new. It is incredibly easy for individuals to fall into routine and thus resist change. Not just routine of process but of mind as well. Too often without realizing it, individuals build mental models of the world that they believe is never changing and everlasting. Society sees this often. Rabid television program fanatics who can’t abide seeing any substantial changes to their television program since it is “perfect” just the way it is are an example of individuals with mindsets resistant to change. For startups to thrive, they need to be surrounded by individuals who have open mindsets. Individuals who are willing to not only take risks trying new ideas but are willing to invest the financial resources and time commitment to enable new ideas to thrive.
- Transient Population: Just as an open and accepting culture is complementary to an open mindset, a transient population is critical to further enlightening an open mindset. One of the biggest elements to opening up an individual’s mindset is the constant flux of new ideas and that is best provided through individuals who have new experiences. While there is no doubt that education is one of the critical factors in engaging and enlightening the mind, interacting with individuals with different backgrounds and experiences helps to reinforce a mind’s openness. Indeed, for all the technology and global linkages society is building to make our world a more connected place, there is nothing more advantageous to opening one’s mindset than talking with individuals who have actually visited and experienced other cultures and places.
Indeed, it isn’t just interacting with individuals who have actually experienced different cultures and places that is critical but it is a willingness for individuals to themselves take the leap and try new places that is also critical to maintaining an open mindset. While there will always be a geographic location that an individual will call “home”, a willingness to personally try new cultures and places is also critical, particularly when one is part of the startup ecosystem.
Eric S. Quon-Lee is Mentor at French Tech Hub. For more information about our mentorship program, click here.