Incubators in Silicon Valley

Posted by Niek Huizenga on September 14, 2010

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Today we’ve visited the largest and one of the most successful business incubators in Silicon Valley: Plug ’n Play Center.

PnP is founded five years ago by and is known as the colloseum for startups. The entrepreneurs are gladiators and as in the old Rome most of the gladiators die but some will gain eternal fame. Success is the driver of this incubator and its entrepreneurs.

PnP offers high quality facilities in the form of cubicles and offices. Above all, the 300+ startups in the incubator inspire each other heavily. But this incubator is much more than facilities. They invest in startups or connect VC funds to the startups; they are an intermediate between financed startups and highly qualified managers for C-level positions; it organizes various events and networking summits and it owns a top tier data center.

The ground floor is populated by startups from countries like Spain, Austria, Czech Republic, (no Dutch cubicle unfortunately). Local chambers of commerce rent a cubicle for their national champion-startups to expand to Silicon Valley. We talked to an Austrian entrepreneur who started a video 2.0 concept. He came to Silicon Valley because his ambitions didn’t match with the environment back in Vienna.

To be clear, startups in Silicon Valley differ a lot from startups in the Netherlands. The level of ambition and the willing to take risks is incomparable what we are used to. The incubator thinks in the same way. The requirements to enter PnP are simple: you need a product (not a service!), it needs to be scalable and the ambition is to create a 100 million + company within 5 years.

Another big difference is the way a startup is financed. People here only think in scalable products with global market potential. VC’s are willing to invest heavily. After an investment (which can be of 10 million +) the startup is in the transition phase. C-level functions are assigned to experienced managers to support the entrepreneur in growth. This is a big difference with Dutch startups. They normally finance their product and business development with the cash flow earned from services. There is too much focus on service deliveries that the product never gets to the market.

There is a lot more to tell and visiting PnP was a huge inspiration. YEAH! can learn a lot from this incubator. We will keep the relationship close and we will certainly encourage Dutch entrepreneurs to go to PnP if they have ambitions to do business in Silicon Valley.

At PnP, but everywhere in Silicon Valley, there is a passion for entrepreneurship and success! Hopefully we have the opportunity to realize something like this in Groningen for our local entrepreneurs!!

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