It takes clever entrepreneurs to make a pre-revenue startup a success.
By George ILIEV
All babies are vulnerable when they are born. Yet, many animals give birth to young who get on their feet in minutes. Why are human babies so helpless?
Research by Rochester University suggests an interesting hypothesis: humans have become so clever exactly because their babies are so helpless. Helpless babies need smart parents to be able to survive: the more helpless the baby, the smarter the parents need to be to raise them to adulthood. This creates an evolutionary loop which allows babies to be increasingly helpless, as long as their parents are getting increasingly smarter.
Now look at this analogy through the prism of the startup world. The Googles and the Facebooks of the last two decades were born as companies that didn't generate revenue. Many of them were moonshots that took many years to become self-sufficient. Yet, they had smart founders who managed to raise seed and VC capital to tide them over their first years.
At least this is the case in Silicon Valley, where venture capitalists will support a team of bright founders working on a promising idea. On the other hand, European investors are much more risk-averse. European VCs primarily tend to invest in startups that are already generating revenue or are close to that point.
This makes me wonder why the US startup ecosystem and Europe have diverged in their evolution and who bears the responsibility. If US startups are the human babies, are European startups the orangutans?
