Saturday, March 25, 2017

"Google’s Plan to Engineer the Next Silicon Valleys" (GOOG)

From Backchannel:

The tech giant is quietly grooming companies overseas in a strategic move to bring the next billion online.
Vu Van is a CEO in San Francisco. Born in Vietnam, she is a member of the auspicious class of Silicon Valley founders who are immigrants — among US startups valued above $1 billion, 51 percent have a foreign-born founder. Van earned her MBA at Stanford, locking herself into a network of hatchling executives. She had a pain point, realized that others shared her problem, and built a company to solve it. She debuted her app, Elsa Speak, at SXSW last year and promptly won an award. On paper, everything was Silicon Valley perfect.

Except that in every other way, Van doesn’t fit the American startup mold. She’s the only member of her company based in the US. She geared up to build her app, an AI assistant for English learners to improve their accents, by returning to Vietnam and immersing herself in the needs of her initial target users. Almost two years later, her seven employees are split between Vietnam and Portugal.

Van doesn’t hesitate to call San Francisco home, but she also stays for a business reason, which is that the networking is second to none. “Vietnam is all about first-generation startups,” Van explains. “Everyone is still figuring out what they’re doing, and no one’s in a good place to mentor.” So she’s planted herself in the one place on Earth where you can’t do your dry cleaning without running into a potential advisor, expert, investor, or future hire. For her company, that edge makes the time zone patchwork worth the sacrifice of sleep and sanity.

So when Van first heard about Google’s new Launchpad Accelerator, she was skeptical. The company was in effect promising mature startups from emerging markets the most epic networking service on the planet: For every hiccup Elsa was facing, Google would match her and two colleagues with a top expert — sometimes the top expert — in that area. For free, with no catch, no quid pro quo. Van decided to give it a shot. Despite her Bay Area bonafides, launching a product in Vietnam had still been a slog.

Elsa is one of the rising stars of The Rest of the World—and Google has a plan to get in the door of companies like Van’s and shape them in its image. It wants to educate them on the best practices of product development and speed up their learning curves. Think of it as strategic philanthropy: In exchange for helping these companies grow, Google gets to scrutinize their books, observe how its own products are being used (or not) in less familiar markets, and spread its gospel to the far reaches of the globe. Eventually, these companies will play an enormous role in getting millions more people to conduct their lives online, and Google will be there as well, ready to scoop up new users.

“The one thing emerging markets are missing is success stories,” says Roy Glasberg, Launchpad’s global manager. “You need an ecosystem.” A wiry Israeli sporting close-cropped hair and performance-wear chic, Glasberg is articulating an ideology percolating inside Google about why so few big companies emerge from outside Silicon Valley. He and his colleagues say the word “ecosystem” a lot. It’s a subtle, unstated way of contrasting the rich environment of the Bay Area, where investors, board members, competitors, and talented workers swirl in a self-pollinating bubble, with the relative deserts of countries such as Indonesia, Mexico, or even bigger players like Brazil. In the ecosystem view, the Bay Area is the goldilocks planet, and the rest of the world has the inhospitable climate of Mars or Mercury.

Google’s theory is that until some company — any company! — has produced a massive IPO or engineered itself an eye-popping acquisition, a developing region won’t amass the resources it needs to support entrepreneurship. Venture capitalists are uneasy, or simply absent. The talent pool is shallow, with few local technologists who have first-hand experience transforming small companies into large ones. When you wonder where to find a good data scientist, or how to negotiate better terms in your series A, or what to fix in your app to get a better conversion rate, no one around you has the answers.

So a delta force within Google, led by Glasberg, set out to see if it could do what countless governments, regional technology parks, and grant programs have failed to do before it: fire up startup kilns around the world that then take on a life of their own. They would do so by picking the sharpest, most proven startups, and showering them with unconditional support for six months (and $50,000, but who’s counting)— essentially treating them as integrated wings of Google for the duration.

To earn that kind of access, these startups have to be much more than a Gucci knockoff. They’re not just the Postmates of the Philippines, or the Tesla of Thailand. They are fiercely unique, tackling unsolved problems and producing code that rivals anything emerging from San Francisco or the South Bay. These are the brightest minds of elsewhere. And Google’s now giving them a jolt of adrenaline straight from the planet’s entrepreneurial mothership: itself.
Transporting the magic of Silicon Valley to other cities is a trope so old, and so beloved by government bureaucrats, that these days it hardly quickens the pulse. Silicon Alley. Silicon Glen. Silicon Wadi. Silicon Fen....MUCH MORE