
Failure: How it powers Silicon Valley and handcuffs Japan - iuguy
http://blogs.berkeley.edu/2010/10/18/silicon-valleys-greatest-competitive-advantage-the-acceptance-and-glorification-of-failure/
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grellas
Failure does not power Silicon Valley. Failure is only a byproduct of a rich
entrepreneurial culture whose overriding goal is success. That culture
understands that startups inevitably will have a non-trivial failure rate and
factors this into such things as equity structures, company valuations,
decisions to fund or not to fund particular ventures, decisions to leave
secure employment situations in favor of joining startups and the like. But
failure is never the goal. It is only a byproduct. To me, therefore, it is not
accurate to say that failure "powers" Silicon Valley.

Apart from some overstatement about the concept of failure (e.g., its being
regarded as a "badge of honor" in the Valley), this piece makes some good
observations about how the Valley has grown and prospered through continued
flexibility and experimentation in contrast to the relative rigidity that has
hampered Japan's startups.

Silicon Valley is beautifully set up to encourage _risk taking_ but the goal
of all risk takers is success, not failure. The United States, like Japan,
once had a mindset by which the goal of every responsible working adult was to
have a "steady job" and there have been cultural factors aplenty that have
discouraged people from leaving such jobs to take a whirl with a startup. The
move from that mindset to that of the risk-taking entrepreneur is driven by
the hope of an extraordinary return for one's efforts. In Silicon Valley, it
has been proven over and over again that such extraordinary returns are
possible for those who are smart and enterprising and that historically has
been the main draw for joining a startup. Today, with the low barriers to
entry, the reasons for taking the leap into startups can be more complex
(personal growth, etc. can now factor in). But the overriding goal is still
money. Silicon Valley provides a fertile ground for those who are driven by
that desire and provides all that is needed for success with a startup (as do
other centers of startup activity).

What drives the Valley, then, is not failure as such but rather the large
number of smart, disciplined, talented people who want to do something special
in hopes of getting large rewards. Those people are not afraid to fail but
their very essence is to try to avoid it at all costs while chasing after the
prize of success.

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gvb
A better premise for the article would be that tolerance of failure is an
enabler in Silicon Vally and that intolerance of failure is debilitating
elsewhere.

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sili
If the Japanese market for start up companies is open, but the culture is a
problem, there could be an opportunity to run a start up from Silicon Valley
but targeted at Japanese market. Especially if it is an internet service start
up with minimal physical presence. I understand not being immediately present
in the target market means that you can become out of touch with it; also some
legal issues might arise, but an opportunity is there.

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patio11
I won't say that is _impossible_ , but anyone wanting to execute on it needs
to have a team where everyone speaks a lot better Japanese than I do, and your
odds of recruiting that team stateside are pretty slim.

~~~
sili
I was thinking more of a team of entrepreneurial native Japanese who simply
decided to do it in US in search of better start-up culture.

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patio11
Feel free to talk to Japanese entrepreneurs about their sorrows sometime,
because I don't want to speak for them, but I don't think moving to the US
addresses the concerns of the three stakeholders who I generally hear
mentioned: girlfriends, parents, and prospective future employers.

~~~
danielharan
Maybe some US funds could offer a good "cover story" for Japanese immigrants
if they fail?

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ebun
Just fyi, this was originally on techcrunch:
[http://techcrunch.com/2010/10/17/japan-to-fix-your-
economy-h...](http://techcrunch.com/2010/10/17/japan-to-fix-your-economy-
honor-your-failed-entrepreneurs/)

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awlo
This doesn't make sense to me. Doesn't that mean, that Japanese (and German,
and Indian and anywhere else in the world) markets are completely open to (and
from a certain point of view desperate for) startups? I understand problems
with getting funding or the right people, but can't you import those?

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donaldc
From the article:

 _In Germany, for example, company founders are held personally liable for
unpaid debt for up to 30 years—even after they declare bankruptcy._

Surely Germany has limited-liability corporations. How is it that a startup
there can't use such a structure?

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tomjen3
Can anybody expand on what he talks about with regards to the German
bankruptcy laws?

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Kurtz79
Yes, I´m interested too... Germany has nothing like as a Limited Liability
company ???

~~~
moeffju
They do, of course. There's the GmbH ("Corporation with limited liability"),
which is pretty much exactly like a LLC. Recently, they also added the UG
("Unternehmergesellschaft") which is the same thing save for less statutory
base capital.

But, as seems to be usual in Germany, everything is more complicated here. To
found a GmbH, you basically need a lawyer and a notary. Oh, and 25k€. AFAIR
founding a LLC is easier. However, thanks to the EU, you can of course found a
UK Limited (Ltd.) with relatively little trouble.

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aristidb
Supposedly you can found a GmbH without a notary now. I don't know how well
that works in practice, though.

~~~
moeffju
In theory you can use a sample contract and found without a notary, in
practice I have never seen it done and people I know used to recommend against
it, but I haven't checked in a while.

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napierzaza
So the industry is "wide open" but if you fail you can be arrested? I'm not
sure there are many convincing ideas to take a shot at Japan until the laws
change.

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dnsworks
Quick summation: Cargo cults don't work.

