What founders from Saxony are looking for in Silicon Valley

Google, Apple, OpenAI: some of the most influential companies of all time are based in Silicon Valley. This attracts founders from all over the world who are looking for ideas. from Niels Dambs.

Google, Apple, OpenAI: some of the most influential companies of all time are based in Silicon Valley. This attracts founders from all over the world who are looking for ideas.

Fountain bubbles and a squirrel running up a tree next to it. It's very quiet and almost perfect in Palo Alto, a small town in the middle of Silicon Valley. Single-family homes everywhere, often with an electric car in front of them, sometimes two.

Google was founded in a garage a six-minute drive away. Headquarters are ten minutes away. A bus arrived, and a group of 24 participants, mostly men, got out from Saxony. “It's good to see you!” Startup founders already have the typical Silicon Valley accent.

New ideas for new jobs

“We've been here since Saturday or Sunday?” Jet lag is still noticeable, asks one participant. The “Innovation Journey” lasts for five days, and is organized by the Saxony Economic Development Agency. The calendar has been scheduled, and now there is an appointment at the German Accelerator – a company also funded by the Federal Ministry of Economy.

She advises German startups that want to expand their business in the USA. Ideally, this should also lead to new jobs in Germany.

Not a good year for startups

Overall, 2023 was not a good year for startups. Venture capitalists invested $170.6 billion in the United States last year, down 30 percent from the previous year. These are the results of PitchBook's analysis.

Subsequently, investments in newly established companies around the world also declined. The reasons are crises, high interest rates and high inflation. In Germany too, startups raised less money. According to an analysis by EY, it amounted to six billion euros last year, 39 percent less than in 2022.

The big exception is startups that build their business model on technology related to artificial intelligence, as investments have increased here. In the United States, venture capitalists and major software companies have poured $27 billion into AI startups, according to PitchBook. In Germany, AI companies have raised more than four times that amount. In 2022 it reached 220 million euros, then in 2023 it reached 943 million.

“Good story” as a starting point?

“Silicon Valley is not a place you can visit, but it is a mindset. I think you can benefit a lot from it,” says Matthias Doms, founder of Chemnitz. Making new connections, coming up with new ideas, starting a business in the USA, that's what the journey is all about.

“German companies work on the product in every detail, and American startups work on a good story first,” says Heidi Radavi of German Accelerator. Businessman Frank Senscheidt of Bannewitz believes the American approach is better: “You can't wait like in old Germany until you get a 110 percent solution.”

“Everything goes faster”

Everything happens much faster in Silicon Valley, notes Steven Roschke, managing director of a startup from Bautzen, who is also a member of the CDU district union there. It's about “developing the best ideas now and here over the next two, three to five years and selling them at maximum profit,” he says.

Before the trip, some participants were also in Las Vegas to attend the Consumer Electronics Show (CES), a trade show for consumer electronics. “We Germans say it's a trade fair, and the American name ends with 'show,' and that's the way it is,” says Ruszczyk.

Less what is sold, but rather how something is sold – this thinking is part of the “Silicon Valley mentality.” The term comes this afternoon. Participants like Roschke want to take more of it with them to Germany. “We looked at Silicon Valley as a big rural area, and what naturally inspires me here is: How can I move my Upper Lusatia to the same area at some point?”

Artificial intelligence 'big trend'

Naturally, the theme of AI also plays a major role in this journey – “The Big Trend, That's Why You Should Come Here.”

The bus will move immediately. Next stop: Apple. Then it's off to Happy Hour. “As Saxon companies, we can no longer avoid this,” says Ruszczyk as he leaves. “We have to invest here.”