California Startup Ecosystem: The Culture of Individualism, Tech And Work #4
The culture and societal framework in which startups operate strongly contribute to their success.
So far, to answer “What’s the California DNA in startups?”, I’ve focused on the best practices of entrepreneurs. Beyond practices, startups are part of social ecosystems that, through their culture, history, and people’s mindset favor — or not — the emergence of unicorns!
After being in SF and LA for several months, I’d say that being based in California helps startups thrive. Based on my interviews with entrepreneurs and investors and my personal observations, I’ve identified 3 structural factors:
- Society is individualism-based
- The attitude is tech-focused
- The mindset is work-driven
As Randall Fahey told me, the last thing to disrupt to make entrepreneurship a global ecosystem is culture. Is the Californian one the most appropriate for startups?
1. Society: individualism-based
When I met Carlos Diaz, who founded several startups both in France and in San Francisco, he told me “freedom was the most important value in the US, when in France, it’s freedom and equality”. This changes how society and economy are structured: it leads to more debates in France, to more unicorns in the US. 🤪
What emerges from freedom is individualism. It means doing what you want but also being fully responsible for yourself. Only individually will you rise higher, by yourself. People collectively focusing on independence build a system that pushes entrepreneurship. A system that makes people take risks and leads to innovation. The way it applies in the economy is liberalism — what we all know about the US. For Americans, liberalism rewards entrepreneurship when the European system doesn’t:
- Andrew Van Valer’s vision: “You won’t be rewarded for being a good entrepreneur in Europe, but you will for being a good employee. The working purpose is to get a position and make sure you’re safe and secure.“
- Patrick Consorti’s vision: “In Europe, if you win, you must redistribute your winnings to others. Here, you win, you’re freer to use your money as you want.”
Since welfare benefits are lower in the US:
What you don’t get, you build it by yourself.
For Americans, a basic principle in Europe is individual responsibility for the common good. The notion of the “nation-state” in France contributes to the feeling that taking care of the people as a whole is a priority, which exists less in the US. This partly explains why our economy is more controlled and regulated by public authorities.
To make the US system work, everyone has to be competitive… and to live in the “now”, as Californians do.
Being short-term-focused is opportune for startups for 2 reasons:
- First, because “If you don’t do it, your competitor will’’. The need to move quickly leads to business relationships that aren’t personalized or exclusive. For Angelika Blendstrup, the US is task-oriented. Relationships last as long as the task does: when it’s done, the relationship is over. Making it last in time isn’t the rule.
- Secondly, what I’d call a “pay-culture” is valuable for startups. In California, people are willing to pay whereas, in Europe, money is sacred and sometimes used as a reserve for the future. Here, it’s a way of getting what you want right now. Big corp will easily give you a big budget (x10 compared to Europe) to develop new products. On the other hand, price isn’t the major issue. Startups can fix it higher. It’s the “Charge for it. Charge for everything” as I once heard!
The individualism principle, through pushing people to go fast, moving forward, and being independent more than secured, helps to raise unicorns. But to build decacorns, tech has a role to play!
2. An attitude: tech-focused
Californians, seeking independence more than security, have a particular attitude towards technology: they are excited. They don’t mystify it.
The autonomous cars topic is a good illustration. In France, its democratization left me perplexed because I was wary of the potential drifts of this new technology. In SF, first, many of my conversations are about it. Second, they are heated because people are excited about the revolution that could happen in transportation, both at the personal and corporate levels. San Franciscans trust more data and computers than I do: their argument is that humans cause more accidents than algorithms do. Convincing, after all.
More generally, Californians are excited about changes. 2 main explanations:
- History: Europe is based on centuries of old buildings, laws, fights that we are reluctant to destroy or move now. American History, being more recent, is more likely to be willing to start from scratch and rebuild, no matter how much time was invested, as Sophie Durey pointed out. In business, it’s easier to jump into new opportunities.
- Education: the high exposure to technology of universities’ students, is an explanation Jeremy High gave me. Stanford, located at the heart of Silicon Valley, and Berkeley offer many innovative programs. These universities and tech companies collaborate: my friend Ruby Peven in SF changed the direction of studies in her former College while working at Intuit, an American unicorn. Knowledge is transferred immediately, from senior to junior level. Here, people don’t consider creativity as high in the French educational system.
This change-friendly attitude has 2 main assets for startups:
- A faster decision-making process. Looking forward, Californians don’t go into the “what if?” and don’t analyze all the potential consequences of a decision before making it. In Europe, it’s more perfection-oriented: make sure a product will work before making it, which takes time!
- A democratized and early technology adoption: in California, people of all ages and social classes use tech all day long through connectivity and apps. A good illustration of how tech is at the core of their daily life is how SF streets are full of B2B SaaS ads. The message is clear: everyone is familiar with startup jargon! In the Parisian subway, the ads are more diverse: they are neither full tech nor B2B-oriented.
Of course, this particularly applies to San Francisco: a small, interconnected, high-tech area. Andrew Van Valer told me about a myth in the Bay Area that says that “If you were a waiter, you would end up getting rich just by listening to the conversations at the table because you would know where to invest”.
Well, this technology, in addition to contributing to startup emergence, also makes people save time… to work!
3. A mindset: work-driven
When I once asked a woman in a startup why Californians were successful in business, she answered: “We work a lot!”. This probably meant that we Europeans were working less: I was a bit upset. So I investigated and understood that work, here, is at the heart of Californians’ lives and occupies their minds 24 hours a day.
- First, they work in startups from 7:30 am to 6 pm without a break. They have lunch on their desk. No “friend’s” coffee. And when they’re done, some startuppers start to work on side-projects. Working is the lifestyle!
- Secondly, apps are familiar to everyone and are used for all the daily tasks that are considered time-wasting. Thus, using Lyft or Uber bikes is the most efficient way to get around, the same thing with delivery apps for lunch, Amazon Delivery for shopping, and Meetup for going out. The massive use of tech makes Californians save a lot of time! This lifestyle is growing across borders, as a large part of today’s successful B2C businesses are those that save people time.
- Talking about the work culture with Andrew Van Valer, he told me: “Enjoying life is a European thing”! He didn’t mean the US lifestyle is boring but that taking time for meals, going to bars after work with friends until midnight isn’t the culture (in LA, it’s hard to find a bar open after 9 pm). As I heard many times, if they have 10 vacation days per year, they’ll take 6!
What’s important here is changing the world and leaving your mark. Sacrifice a lot today to build a better tomorrow: as the US did for 100 years between the 19th and 20th centuries to build their empire, as Boris Frochen explained to me. And here I come to mention the American Dream (I waited for my 4th article, I think it’s allowed 😉).
Before coming here, the idea of “Go to the US, you’ll make money” was utopian to me. Actually, I was wrong with my understanding of it. One of my friends in LA, born in a middle-class family in Boston, has always been told that if she worked, everything would be fine. She had never been pessimistic about her future. It’s an idea shared by the majority: if you work hard, you’ll succeed. The American Dream leads to a strong empowerment desire. How? By being productive. As Mélanie Girod highlighted:
“Productivity is a social currency.”
Being active, trying, and doing things is valued and is a social rule. It doesn’t necessarily aim at making money: my host in Venice was 65 and was creating surf suits. My friends in San Francisco were either passionate about drawing or photography and invested the majority of their free time in it. It wasn’t an occasional hobby.
Does this mean Europe cannot compete?
The more time I spend here, acculturating, the more I understand why California startups are known as being inspiring and successful. There are cultural drivers in California that push entrepreneurship, which makes the emergence of startups almost natural! Society as a whole supports this technological ecosystem, and for many people here, Europeans don’t do it as much yet.
Does this mean Europe cannot compete? If culture is the last thing to be disrupted in order to make entrepreneurship a global ecosystem, it’s a good thing for Inovexus: our very essence is the Californian culture. Our goal is precisely to infuse this mindset, well known by Philippe Roche, the Inovexus’ founder, to European entrepreneurs. To do this, we can count on our mentors who have all lived in California for about 20 years. That’s our cross-border DNA!
Americanizing,
Mathilde
