04:35 AM

Russians Announce Their Own "Silicon Valley" - And My Tiny Contribution...

Reuters reports:

President Dmitry Medvedev on Thursday announced that Russia would build a high-tech hub near Moscow to spur modernization of the economy and reduce its dependence on oil and gas.

The center, designed to develop five priority sectors -- energy, IT, telecommunications, bio-medical and atomic technologies -- will be built near Skolkovo, a new private-sector business school in the Moscow region.

(It would be tempting to call it "Silicon Steppes" if it were in Asiatic Russia...)

I had a very small part to play in this story. In late 2007 I met with a large Russian delegation that had come over to Silicon Valley to learn some of its lessons. Their goal was to use Russian oil money to establish several Silicon Valley-like regions.

They asked me lots of good questions. They made it clear that they did not want to replicate Silicon Valley, they wanted just the best bits.

I told them I would tell them the secret of Silicon Valley's success. They went silent, and leaned in closer to hear what I had to say. "Failure."

(This was before the EPIC Fail craze of recent times...)

Silicon Valley tolerates, and funds, massive amounts of failure. Only about one out of twenty startups succeed.

Probably no other culture allows people to fail as many times as Silicon Valley. Inside every successful Silicon Valley entrepreneur is a failed entrepreneur.

No other culture in the world, (except for maybe Las Vegas), tolerates and celebrates as much failure as Silicon Valley. This is the "best bit" of Silicon Valley, and its also the part that can't be exported.

They nodded. And they made some notes.

I asked them about how they would structure their VC funds, and about the Russian entrepreneurs that they hoped to attract.

One of them, the head of a quasi public/private VC fund, said that they had a problem finding and funding startups. It was an exasperating problem. The Russian entrepreneurs won't tell them about their business ideas.

They don't trust them. "I'm running a VC fund, I'm not going to run off with their business idea!"

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By the way, did you know that Tim Draper, one of our most successful VCs, penned a song called "RiskMaster" to welcome the Russian delegation?

I have no idea what the tune is, obviously something stirring, I can imagine something between Red Army choir and Welsh choir:

Hey! You want to start a business?
Russia seems to show some promise
While weighing all your choices
"Go to Moscow!" you hear voices
Google founder came from Russia
Parametric? - Not from Prussia!
Genesis and PayPal too

SVOD and what is new?
With luck you'll become a

From Soviet biology
Comes really cool technology
Software immunology
From Nukes we get ecology
Ukraine's Orange Revolution
Good for all-freedom solution
And then political pollution
Now it's all in execution

With luck you'll become a

All you need is a faster chip
A million rubles
A couple of engineers

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Please see: Turning Oil Into Innovation: Russian Delegation Seeks Silicon Valley's Lessons - SVW