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Skip Silicon Valley: Why Smart Startups Start In Europe

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Boticca.com is located in Covent Garden, Central London. © Getty Images

Despite having studied at Stanford University, worked for start-ups in Silicon Valley like Linkexchange and Tellme networks, spent four years at eBay in California in product management, and been an investor at Accel Partners, a venture capital firm with roots in Silicon Valley, I made the conscious decision with my co-founder to build our fashion ecommerce start-up, Boticca.com in London. Boticca is the online destination for jewelry and fashion accessories by the best independent brands from around the world.  We wanted to build a global business from the start and knew that London, not Silicon Valley or New York, would provide the best springboard. Many questioned our decision and believed that we were significantly decreasing our chances of success by choosing to build our company outside of Silicon Valley and the U.S. But we had come to a different conclusion and looking back after three years, it was the right one.

Want to go global? Start in Europe.

In the U.S. in the vast majority of cases, you first build an American company, which then internationalizes.  In Europe if you want to build a large business, you must think global from the outset, because a single market won't be large enough for you.

There is an argument that says one must focus on a single market at the beginning in order to prove the model and hone the proposition. I subscribe to that argument, however I also firmly believe that in an increasingly global world, where information flow has almost no boundaries and you can access goods and knowledge from all over the world no matter where you are, it is critical to inject a global DNA in your company from the very first day for it to have a competitive advantage and win. Europe not only forces you to do both, but it also gives you the resources to do so successfully.

Build a global team to serve international customers.

Let me illustrate this with Boticca.  Four months after we launched at the end of 2010, we were global in culture with a team made up of seven nationalities, including French, British, American, Italian, Iranian, Finnish and Slovakian. We had handpicked 160 brands in 40 countries, and without any marketing spend, our customer base was global and evenly dispersed across the U.S., Europe, Middle East and Asia. Customers could transact in dollars, euros and pounds and all of our brands shipped worldwide. We chose to focus on the U.K. market to begin with, which is where we started spending our marketing dollars. But because of our foundations and the DNA of our brand we were already organically global.

This wouldn't have been possible had we launched in the U.S.: we would not have been able to create a team so reflective of our international product and intrinsically able to reach, relate to and communicate with our global customers and designers. We saw a few startups similar to ours in the U.S. fold or get acquired within a year of inception because they could not make their model work. They were unable to see the value of the international base of buyers and designers because they neither understood it culturally nor had access to it.  One of the main value propositions of Boticca is that it enables women to acquire beautiful pieces that are different, special and previously were hard to find, explaining why over half of our transactions are intercontinental. This is the New Yorker buying from the Turkish brand, the Londoner discovering the Australian brand, the Japanese seeking the designer in Paris. All of these women are looking for something different that will make them standout. This is one of the fundamentals of fashion and especially accessories and is fulfilled by making accessible something seemingly exclusive and hard to get. Enabling global reach for the best accessories brands worldwide, brands that suffered from a fragmented market and limited distribution, gave us that competitive edge.

With the growth of Asian markets and their purchasing power in the East, the immense pockets of wealth in Russia and the Middle East, and the relentless American consumerism in the West, what company wouldn't want to be at the center of it all in Europe to best serve all these customers? The best and the brightest convene in London, which is why we made this city our home.

Embrace the melting pot & engage with the local tech community.

London’s melting pot affords entrepreneurs immediate and easy access to the best talent from each of these markets, enabling them to build a world-class team with a strong global approach from the outset. Starting a company in London puts the team at the center of time zones, making travel and communication easy with other major consumer markets. Language is no longer a barrier, as the current generation of European entrepreneurs and their teams seem to speak at least three languages on average. We have thirteen different languages spoken at Boticca.

Moreover, a community of technology startups has grown in London supported by the likes of Google and Facebook thus enabling a lot of knowledge sharing and allowing European companies to take advantage of the same kind of shortcuts as their Silicon Valley and New York counterparts by making strategic partnerships easier. My biggest criticism of London and Europe in general still remains the lack of real venture investors who are ready to bet on young company. There is still just a handful, but this is changing and has already changed tremendously in the past 5 years (more on that later).

Is Europe right for your startup?

I am not saying that every tech startup with global aspirations should be started in Europe, far from it. For countless reasons, many businesses should start in the U.S. However I don’t think it is an obvious decision anymore, as it used to be ten years ago. Back then, most of the experience, knowledge, Internet infrastructure, willingness to purchase online, customers and investors were in the US, specifically in Silicon Valley. This is no longer the case today. Examples of European companies which turned into global successes now abound from Skype, Spotify, Playfish, Net-A-Porter, SoundCloud, Vente Privee, Fotolia, Rovio and more. So for companies like Boticca, building a global brand and serving a global market online, being in London is a smarter and more strategic choice.