Eric Schmidt, Google’s chairman and CEO, says that for Europe to challenge American firms’ technological innovation, the entrepreneurial culture needs to change. We need to embrace “crazy entrepreneurs”.In an interview with the Daily Telegraph, Eric Schmidt points out how America’s top entrepreneurs don’t fit in with traditional society. “The first question is: who are the founders of the large global companies?” asks Eric Schmidt. “They’re usually the Larry Ellisons, the Steve Jobses, the Bill Gates. Notice they do not fit a standard European education model. They’re drop-outs, crazy smart people.” Eric Schmidt may have a point. Just because you’ve got an MBA, it doesn’t guarantee that you’ll be a successful business man or woman – and much less a successful entrepreneur. Entrepreneurs thrive on creativity and seizing opportunities. These are skills which you can’t learn through an academic programme – you can only learn them through experience. Venture capital Eric Schmidt adds that venture capital also plays a bit part in entrepreneurs’ success. “You’ve got to have the crazy entrepreneur types, who you’ve got to celebrate, which we do in America. And you’ve got to have the venture capital, which really is ‘at risk’ capital and is different from other capital,” Eric Schmidt explains. “It takes a very long time to get a proper venture capital industry going. And in Europe there are many countries where the failure of venture capital is seen as criminal – Germany, for example.” VCs have historically been USA-based, but the last decade has seen an important rise in Europe too. The real question is, how can we encourage VCs to buy into entrepreneurial ideas? Although many people are sceptical of getting a VC involved in their business, the truth is that often, they’re the one avenue available to entrepreneurs to expand. You’ve already used up the three Fs – friends, families, fools. And the banks won’t invest in you, either – you’re too risky. So you use a VC. “Wealth is created by the private sector, not the public sector,” continues Eric Schmidt. “If you’re going to have great companies you have to be willing to support and encourage the creation of real wealth-generating capitalists. That means you have to put up with them.” We agree with Eric Schmidt that VCs have a huge role to play in developing entrepeneurialism in this country. But they key is to pick the right VC for your business. A team that you can trust, and that can trust you to take the business to the next stage.
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