What makes Silicon Valley companies so innovative? Oliver Donner and Loren Heilig addressed this question at InnovationCamp BW. In the second part of the interview, our managing directors compare the working environments in Silicon Valley and in Germany and take stock of their stay in the Bay Area.
Loren: In Silicon Valley, everything is very much geared toward progressing in your job and economic success. Co-workers are practically the only social circles that people move in. But what also needs to be said: Very few spend their entire working life in Silicon Valley. Typically, a lot of people go away after a few years to start a family somewhere else. But successful entrepreneurs usually stay in the Valley as investors.
Oliver: Silicon Valley is not representative of the US, but is in a sense its own ecosystem. There is a huge startup scene and a lot of hype surrounding the tech companies based there. What people in the Bay Area do extremely well is marketing and product management.
Loren: I thought AppBuddy and Jitterbit were very exciting. With its product GridBuddy AppBuddy offers a Salesforce add-on for managing and editing mass data in a spreadsheet-like form. Only the Business Development and Sales departments of AppBuddy are based in Silicon Valley. The programming was outsourced to Ukraine or Belarus. Astonishingly, the company founders did not know that themselves. With the mentioned add-on alone, AppBuddy now makes $7 million in sales per year.
The Jitterbit software enables data integration on the Salesforce platform. At first, the product was designed as a jack of all trades and so had a huge range of functions. Since the sales successes were fairly modest, the company conducted a user analysis. The result: The main target audience are Salesforce administrators, who are primarily female and in their early 30s. Based on the analysis, Jitterbit redesigned the corporate website to better target the female audience. At the same time, the functionality of the software was reduced, thereby allowing the price to be lowered. Now Jitterbit’s annual revenue is $120 million.
Oliver: Even more than individual companies, I remember certain conversations that personally pushed me forward in my challenge. For example, a marketing expert showed how direct and indirect sales work best. A coach at University of Berkeley dumped the Canvas business model into a program that maps all elements of the developed business model.
Oliver: Absolutely positive. I was able to get numerous suggestions and took away a lot of expertise. I’ve learned what to look for in defining products for them to be successful. Also, the visit to the instant messaging service Slack was very instructive. There it’s all about how a company gets customers on its platform. Slack initially offers a free but quite extensive account with registration. In addition, there are several paid options with additional functions to choose from. We will apply a similar concept with our SECMENDO software.
Loren: Immediately after our return from the InnovationCamp, I was full of euphoria in implementing the insights gained at my own company. Meanwhile, I’ve found that implementing the methods of Silicon Valley is not so easy. It takes a while for everyone to understand the new approaches, such as when it comes to Customer Discovery. But we are making progress step by step.
Loren: The combination of staying loyal to the process, i.e. consistently using existing tools and high speed is the best way to open up new markets with innovative products. The problem in Europe is frequently: Everyone wants to see changes, but nobody wants to change. The people of Silicon Valley do not have superior skills and are not more highly skilled. I’m even convinced that there are better programmers in Germany. However, one advantage the Americans do have over us is the absolute will to do everything for innovation.
Oliver: I learned a lot about how Silicon Valley works, how innovation is done professionally, and how product development works. I was also impressed by their willingness to invest a lot of money, even though in most cases the investment doesn’t pay off.
Oliver: Definitely. Anyone who wants to intensively focus on innovation will have come to exactly the right place. Does my product have the potential for a larger market? The methods you learn there can be immediately actively applied for such a question. Participation also extends your personal horizon, because foreign working methods have to be tested.
Loren: It’s also an obvious recommendation from me. It’s a great initiative of the State of Baden-Württemberg. Other Federal States also organize visits to Silicon Valley. But they only visit a few startups and companies – without the possibility of networking and working on specific issues. As for the duration and scope of this program and what it has achieved, there’s nothing else like it in Germany.