Entrepreneurs, Startups and the Future of Technology
James Donelan, MuleSoft
MuleSoft – Connecting the new enterprise – #1 Integration platform for the cloud and enterprise
“The key to being successful as an entrepreneur is to devote time to your ideas and create. The rest is putting effort to succeed.”
After his studies in the University of Limerick (Ireland) James took his first steps as a Software Engineer in Compaq (Germany). From where he moved to San Francisco. In his early stages during the dot-com boom he developed online securities trading systems at Charles Schwab. Later on he kept on working at several different companies gaining more than 15 years of experience in the field of technology, internet and software development.
He started out talking about Silicon Valley in order to help us understand the entrepreneur world. There are 5 to 10 thousand companies in Silicon Valley. This area gathered around $11 billion worth of venture capital in 2012 which is approximately 2.5% of what Google’s worth. And there are about 2000 startups funded every year in Silicon Valley.
Lets unbind some myths about startups. Mark Zuckerberg is an outlier, the average age of entrepreneurs is 34.1 years. Silicon Valley is not the only startup hub. In the United States, New York gave place to ‘Silicon Alley’ where companies like Instagram were born.
The map below taken from Startup Genome shows startup hubs worldwide.
TechnoLatinas is a term scored by the strong startup movement in South America which describes the growth in number of investors and venture capital in this community. For example in Brazil $78m were invested in 1000 startups approximately. Examples of startups in this region are MercadoLibre, Amazon, Workana.
Why did Mulesoft locate in Argentina? They found good talent and the environment was right to develop their work. Also the time difference between San Francisco and Buenos Aires is more convenient than other locations. They encourage teams in San Francisco and Buenos Aires to collaborate with each other as well as members of each team to travel to the different offices.
So why do startups happen at such specific locations? Or better yet, what does it take for startup hubs to emerge? Essentially you need to create a whole ecosystem that can thrive. One where you have education institutions training young people and engaging them in technology, who have the willingness to explore new things and bring commitment, dedication and innovation. On the other side, you have successful companies and entrepreneurs that bring the know how and capital; who can mentor young entrepreneurs on how to be successful. In addition entrepreneurs can receive help through incubators, crowdfunding and seed accelerators.
The case of ‘Pebble’, a watch that syncs with your phone, was launched through Kickstarter which is a source of crowdfunding where there was no equity relationship with creators. But as an investor you had the chance to buy the product before it was available to the public.
Sometimes entrepreneurs spend months or even years developing a product to realize after launching it that the audience is not interested in it at all. It is relevant to validate the business model before launching a product than spending efforts on something that the audience will not want. The Lean Startup Cycle introduced by Eric Ries consist of three steps: building ideas, measuring to gain data from audience and learning from that feedback to generate new ideas. The cycle is faster and better than spending 2 years aside and then launch a product. Always trying to minimize the time around the cycle.
A good example is the case of Zappos an online shoe retailer that grew from a startup and is currently owned by Amazon. The founder took pictures of shoes in different local shops and made a rudimentary website showing them. Then the number of clicks on those pictures was measured. With that data he proved the business model was going to be successful and it was after that process that he started the business formally.
How do big traditional companies compete against this fast evolving companies? Some have started to incorporate the lean technique into their traditional business models to react faster to changes in markets and actually started treating themselves as startups.
An emerging trend in the business world is moving products to platforms. In today’s interconnected world firms seem to gain competitiveness through their digital platforms where they allow other companies to build and create products. An example is Netflix operating in AWS Amazon´s platform. Platforms allow the business to focus on developing new ideas that add value to their product without getting tangled in specific matters of IT structure. Plus launching and testing products becomes faster turning the model more capital efficient.
**Technology from 2013 onwards. **
James shared with as from Gartner’s top technology trends his personal favourites:
1- Mobile devices
2- Cloud hybrid IT
3 – Big data analytics
4 – Internet of things
5 – Real time social sharing
The next steps for technology is bringing digital media into our environment and connecting to the physical world. James believes APIs tie all top 5 together and will be a turning point in technology and the way businesses operate. Sparking a revolution in many other areas and industries such as transportation, social environment, entrepreneurship and so on in the same way the industrial revolution did.