I’ve just spent a week in Iceland meeting with startups and presenting to the Startup Iceland conference. The conference is the brainchild of Bala Kamallakharan, a one-time banker and now investor in the Icelandic technology scene. Kamallakharan saw the benefits that a startup ecosystem could bring to the country, and decided to go about helping build that ecosystem. Iceland doesn’t have a huge background in technology, it has a couple of higher profile companies such as GreenQloud and Plain Vanilla, but hasn’t yet built much scale.

I spent my week in Iceland both getting to know the country and its culture generally, and meeting with startups specifically. The thing that most struck me from my time there was the differences between Iceland and Silicon Valley – both at a macro level and in terms of startup attitudes.

Iceland would appear to be everyone’s dream in terms of quality of life. There is very little traffic, everyone I interacted with was very friendly, the country has a appearance of being both safe and comfortable. This feeling is reflected in the startups I met with. Even high-growth companies seem to offer their staff a real work/life balance. I met with the executives from one high growth startup and was struck by the fact that regular (and modest) work hours and individual outside interests are seen as the norm.

We can contrast this with Silicon Valley. Anyone who has braved the commute between San Francisco and the Valley will know just how broken transport infrastructure is. Recent protests around housing prices and the impact of a buoyant tech sector on citizens point to rising tensions and, while Silicon Valley is an exciting place to work, there are few people who would argue that it’s a place that encourages a work/life balance. Looking at the working hours of my Valley-based friends I’m struck at how much people sacrifice in pursuit of the holy grail of a big tech exit.

So with that context it was fascinating to be given the opportunity to talk to conference attendees (among them the President of Iceland and the Minister for Communications) about how the country could create more of a tech ecosystem. While some of the answers to that are obvious (it only take a few good exits before a pool of investment money, a pool of experienced entrepreneurs and a pool of smart talent all comes together to build momentum), there is a deeper issue to be discussed here.

As I travel around the world, I’m struck by how many places want to become the new Silicon Valley. From London’s Silicon Roundabout, to New Zealand’s Silicon Welly. From Colorado’s Silicon Flatirons to Silicon Valley Israel, people seem to be striving to emulate what The Valley has. It strikes me that this is wrong for two related reasons:

  1. The Valley only exists because of a highly interrelated series of attributes – money, talent, culture etc. Trying to recreate the Valley without these same inputs will never be successful
  2. In biology and in business, an ecosystem should be in keeping with where it exists, by trying to create a Silicon Valley somewhere else, people ignore this need for context

To extend the metaphor further, if I were to transplant a tropical flower and plant it in the middle of the Sahara, the chances of said flower growing are next to nothing. It is only through the combination of a complex list of interrelated factors that allows a tropical flower to bloom in the tropics. Without this highly complex ecosystem around it, the flower will wither and die.

And that is precisely what happens when we try and create the “Silicon Valley of [insert the name of somewhere that ISN’T Silicon Valley]. It’s an aim that is doomed to failure.

But even were it possible to recreate Silicon Valley elsewhere, would we really want to do so? The world is an interesting place precisely because it is so diverse. The markets of Marrakesh lose something when they’re populated by Starbucks and McDonalds. The Greek Isles are amazing precisely because they mix stunning scenery with a quintessentially Greek way of life. In trying to change the culture and way of life of a society to mimic that of somewhere else, we create a situation which is dangerous, damaging and, frankly, sad.

Iceland struck me, from the limited time that I had there, as an absolute paradise. There’s not many places in the world that I’d consider to be on a par with New Zealand, but Iceland certainly is. My biggest hope for the country is that when I visit again in a few years, I see a country that is flourishing. Yes I hope to see a vibrant tech ecosystem springing up, but I hope that it is an ecosystem in keeping with the Icelandic culture and way of life. And I hope beyond measure that in creating said ecosystem, Iceland hasn’t lost all the stuff that makes it an amazing country.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

4 Comments
  • Well, Mr. Kepes is correct to realize that there is no formula to duplicate Silicon Valley. Historically, tech startups in the valley, before it was even called Silicon Valley, were transplanted R&D operations of East Coast corporations many of whom were also military contractors engaged in the electronics industry. Out of that milieu emerged the idea of of pure technology startups funded by venture capital. Today’s Silicon Valley is based on education networking with Stanford University at its nexus, but you can really consider the entire network of higher education institutions operating in California.as the source of Silicon Valley’s success in the modern era. Something similar happened in the Boston-Cambridge area with MIT being at its nexus. Today, eastern Massachusetts is home to a large number of higher education institutions that are currently feeding into any number of high-tech and cloud-related startups and not just the traditional powerhouse tech players like EMC and HP. So unless a region has a developed network of colleges and universities strong in science, math and engineering, you should not expect to new Silicon Valleys bloom.

  • Great observation Ben, and it takes more than the core assets and infrastructure you describe. Please take a look at AnnLee Saxenian’s book Regional Advantage as she describes the Boston technology region called Route128 and why Silicon Valley has flourished and Route 128 has struggled. It’s collaboration and management style of servant leadership versus command and control, open sharing between companies both formal and informal, etc. For a great presentation on how Silicon Valley built the assets and core infrastructure please watch this presentation ( https://www.youtube.com/watch?v=ZTC_RxWN_xo ) by Steve Blank, it is an hour long but worth every second.

    • Tim Wessels |

      Well, Ms. Saxenian’s book was published in 1996…18 years ago. Her work was based on interviews, which means the research and observations are probably 20 years old. Until the founding of Intel in 1968 there really wasn’t a “Silicon Valley” identity as the valley was mostly electronics shops doing contract military work. There were certainly cultural and organizational differences between venture funded tech business in Silicon Valley and the more established tech companies operating in and around Boston on Route 128, which was dubbed America’s Technology Highway. Some of the tech powerhouses on Route 128 are no longer there like DEC, Wang, Prime, Data General and Polaroid, but other established companies are still up and running, including IBM, HP, EMC and prime military contractors like BAE Systems and Raytheon. Red Hat and Microsoft have large Boston-area R&D and engineering centers. The number of Boston area cloud startups may lag behind those in Silicon Valley, but they are flourishing, especially in the Boston seaport innovation district. And let’s not forget that the Boston biotech industry is only rivaled by San Francisco. For the history of how Silicon Valley came into being, I recommend the PBS American Experience program titled “Silicon Valley” for its accuracy and great story telling.

      • Hi Tim,

        You are correct, however the context was what does it take to build what Silicon Valley has become not that Route 128 is bad. AnnaLee’s book is a historical record of the differences in management style that contributed to a slower growth of the Boston region than the San Jose area during that time period. Besides everything else it takes such as infrastructure there is a cultural component and the contrast between those regions is stark and a contributing factor. The other part of the story is related to Shockley/Fairchild and Stanford/Turning. As Georg Hegel said, “we learn from history that we do not learn from history.” The point is Iceland, New Zealand, …, name any other country/region will not create what took 50 plus years to produce in Silicon Valley. There are many ingredients and the recipe is not clear to most. Lots of government investment, lots of good ideas, capital markets, … etc. The point is don’t look at obvious for the recipe, you will miss so much if that is what you do, and of course don’t expect results for decades.

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