Live and work outside of the US but thinking about how to tap into Silicon Valley for your company’s benefit? Well, you’re not alone.
Innovation managers around the world are watching the Valley and asking how they can translate the latest tech trends into actionable solutions. Finding the right approach isn’t easy.
As the threat of disruption across industries grows, an increasing number of companies from Switzerland, too, are actively looking for ways to connect with the West Coast’s leading innovation hub.
It’s no longer good enough to wait for change, you need to get out there and be part of it. But what’s the best approach? How do you connect?
Currently, there are over 150 so called “innovation outposts” in the Bay Area and over the past few years there has been a growing diversity of industries, so-called verticals, that are plugging into the ecosystem. Even the Pentagon and NASDAQ recently launched initiatives in the Valley.
It’s worth highlighting why Silicon Valley has become such a hotbed for innovation and what some of the latest trends are.
First and foremost, it’s about the culture. The majority of people you’ll meet in Silicon Valley seem to have an innate understanding and encouragement for entrepreneurship. Their willingness to re-invest in and support startups has resulted in a deep pool of mentors, advisors, and investors.
It is exactly this ability to take chances and to engage with startups in a meaningful way that is extremely valuable for larger companies. An important part of this is mind-set. Being open to sharing ideas and feedback with your peers and even your potential competitors is a key part of the innovation culture, and it is this openness that is often lacking in Switzerland and elsewhere.
It’s worth mentioning that annual venture funding in Silicon Valley surpassed $20 billion for the last two years. In comparison, Swiss venture funding surpassed CHF 0.5 billion for the first time in 2015.
Some of the key verticals that have been making the headlines over the past months on the West Coast include virtual and augmented reality, digital health, fintech and insurtech, as well as retail.
A great example of the momentum that augmented reality currently has is the latest funding round of Magic Leap, which gives the startup a post-money valuation of $4.5 billion before even launching its first product. Google and Qualcomm are major investors.
Even “older” startups like San Francisco-based Metromile are still ahead of the digital game with their pay-per-mile car insurance. With New York startup Lemonade raising a $13 million in seed round last December from Silicon Valley’s Sequoia Capital, it looks as though peer-to-peer insurance might be the next big thing.
There are examples of digital transformation in every sector, from Betterment for managing your investments to Haven Life for getting life insurance. You can now do almost anything online without leaving your home.
Switzerland plugs in
So how can Swiss companies connect with this distant world on the beautiful coast of Northern California? Unfortunately, there’s still no one size fits all solution for leveraging the exciting innovation we all hear about, and many initiatives fail to make a lasting impact on their companies back home.
For most companies, the first step in building ties with the Bay Area is to organize what I like to call Silicon Valley Safaris. These are usually one-week trips filled with back-to-back meetings and workshops with startups, incubators, and innovation experts.
These expeditions are a great way to test the waters and begin building relationships, however it’s often difficult to translate the learnings into actionable outcomes. In other words, the impact tends to be on a personal level rather than a company level.
Therefore, the focus of these tours should be less on actual business outcomes but more about understanding the culture and getting inspired. In fact, swissnex San Francisco—Switzerland’s own innovation outpost in the region—offers these opportunities.
To keep the momentum going the next step usually involves partnering with local organizations that can provide relevant insights and connections. Accelerators, incubators, and venture capital firms have become more aggressive in connecting with larger companies in order to match them with their latest roster of startups.
This low touch and low cost approach works well when it comes to identifying new trends and technologies and provides companies with a valuable pre-filter, as it is often hard to know what is just hype and what will really have a lasting impact.
For companies with a longer-term commitment and deeper pockets, setting up an actual office or “outpost” is the most hands-on and arguably also the most effective approach. After spending some time in Silicon Valley, you’ll quickly come to realize that actually being here for longer periods of time is invaluable for building a strong network and understanding the innovation culture.
Innovation outposts can serve as a platform for many different initiatives, and their role often changes over time, be it for investments/acquisitions, trend scouting, partnership development, or even an internal incubator.
More recently, the growing number of innovation outposts in the Silicon Valley region has led to a shift towards innovation clusters; a group of innovation outposts that share similar interests, often within the same industry but also across industries.
This cluster idea is a model that organizations like swissnex San Francisco are embracing. swissnex creates a bridge between Switzerland and Silicon Valley. Finding ways to bring Swiss innovators together and help them leverage their learnings from the Bay Area will be a key role of the new swissnex San Francisco office at Pier 17, set to open later this year on the Embarcadero waterfront.
Critical mass is forming
Many Swiss companies have actually already made the leap across the pond. Swisscom and Nestlé have long been present in Silicon Valley with their own innovation outposts and have served as good examples of how to successfully connect with the local network.
Swisscom has focused on scouting technologies in the telecommunications space but also on getting a better understanding of cloud services. Nestlé, on the other hand, wants to find ways to deepen its relationships with consumers online and via social media. In both cases, the focus has changed over time and being flexible and agile is a key part of the power of these innovation outposts.
The Valora Group, a retailer, is another more recent example. They just hired their first Digital Innovation Manager (full disclosure: it’s swissnex San Francisco’s former Innovation Services lead, Cyril Dorsaz!) who will be based out of San Francisco and support the efforts of the Valora Lab back in Switzerland to help keep pace with customers’ changing—increasingly digital—retail habits.
It’s clearly an exciting time to be in Silicon Valley. The key for Swiss industries will be to find the right way to plug into this rapidly changing world. Trying to do so is no easy task, but an important step nonetheless. And if you don’t know where to start, get in touch with us at swissnex San Francisco!