In my inaugural column I wrote that I saw world-class startups with world-class ideas in Italy. Let me use this second (and subsequent) column(s) to dig more deeply, then, into Italy’s startup scene. For those of you with short attention spans, my digging reveals this: It’s a good scene, with great potential. The “pieces” aren’t yet in place but they are moving, fast, in the right direction. All systems are go. Well, pretty much. The thrust of this column: The startups are well ahead of the rest of the Italian ecosystem. OK, now for those of you with longer attention spans.
World Class Startups
For the moment, let’s put aside the question of defining “world class”. The startup founders I have met are well educated and well-trained. Indeed, they are better educated—and trained—in technical fields such as engineering, where Italy’s higher education system excels. If my experience is any indication, they are more mature than many of their US counterparts, meaning that they are quick to receive and integrate advice and perceive and quickly develop innovations to respond to opportunities in rapidly changing markets. In other words, maturity means
More Bang for Their Buck. Products. In the Market. Today. Anyone watching the European venture capital market will see that, in general, continental startups get less money in the early stages. (Yes, I know there are exceptions.) What I seem to be seeing is that Italian startups are doing a lot with less money. Now, this is increasingly true among startups everywhere, especially in the digital realm (i.e., non-hardware sectors). But Italian startups seems to have a pretty good grasp of what to do.
Here’s the clincher: They make stuff. They are already making stuff. Then, without waiting for (much) more money, they put into the market. Re-read those three sentences (I’ll wait). This is what matters: They are not looking for funding for the ideas; they are looking to fund growth.
OK, OK, so this is a generalization. But it seems valid. Of the 50+ startup pitches I saw a few weeks ago in Milano and Torino, some 43 (or so) of them either had a product in the market or in beta (with a large majority with product in the market). (Of the remainder, quite a few were in sectors requiring a lot of money to move to the next phase, e.g., biotech, cleantech). Raising any amount of professional (seed, angel, VC) money takes at least six months. Italian startups are not waiting for money: Once it is largely ready, it’s launched into the market, where the startups then respond to market feedback. They get it.
Discovering, or Re-Inventing, the “Lean Startup?” It seems that, almost without knowing it, Italian startups are taking a few pages from the Lean Startup Movement, the startup playbook sweeping the US startup and venture communities.
Future Columns. Without detracting from their rather astounding accomplishments to date, where they could use some work is on the financial and marketing sides, among other areas. That’s the next (or third, if my math is correct) column. Then we’ll turn to the institutional and service ecosystem (or perhaps some other topic that catches my fancy).