23 Nov Innovation thrives in Europe

As I write this, I am sitting with an angry Mediterranean Sea roaring at my back, pausing between meetings with some very, very smart Israeli start-ups as the first winter storm hits Tel Aviv. I am one week into a three-week tour through Europe and Israel, taking an assessment of the technology markets here and scouting companies to bring to DEMO@15 in February.
What strikes me on this visit is the presumed gap between the U.S. and European technology ventures is rapidly closing.
Early in my career, popular thought held that European technology markets were about six years behind the U.S. More recently, that gap has narrowed to six months, and in many market segments—for example, wireless communications—one could easily argue that Europeans hold the lead.
But the lag really isn’t technology development, or even technology adoption. In the last five days I’ve seen some pretty great technology requiring big brains and advanced research to bring complex the concepts to life. On the buy side, consumers readily adopt products that offer real benefits. You only need to look at the crowded mobile phone and FNAC electronics stores to know that Europe is full of eager buyers. More strikingly, more than 1 million Frenchmen have created blogs, a relative number that belies any assumed adoption lag among Eurpean technology consumers.
Add to this European technology mix a maturing venture capital market and a concerted effort by the European Union and regional governments to promote technology development and adoption. Sprinkle in high-profile success stories, such as the $575 million acquisition of French comparison shopping engine Kelkoo by Yahoo!. Baste in strong local markets that are buying and using new technologies for competitive advantage. You have a recipe for a rapidly emerging technology culture every bit as competitive as the U.S. technology market.
So why are European start-ups not kicking U.S. start-up butt? The No. 1 differentiator—and the area in which U.S. firms have a light-year’s lead—is on the product-to-market process. U.S. start-ups know how to do market-driven development, product management, and product marketing better than any other region in the world. U.S. developers listen to the market, set a benchmark, be it a feature set or a launch date, and hit it.
Certainly, technology products are never truly “done.” There are always new features to add, code to optimize, interfaces to polish. Our counterparts across Europe tend to focus on getting the product perfect. But technology productization has never been about being perfect. It’s about good enough, with a plan to get better. U.S. developers and product managers understand this in a way that is just not well accepted in Europe.
What does any of this mean for U.S. developers, aside from providing some small assurance that their lunch is not about to be eaten by the Europeans? Primarily, my visit here has been a reminder that European technology centers offer a great shopping center for U.S. technology companies seeking to acquire technical assets and expertise. It’s easy to overlook or even dismiss European developers, and that would be a mistake.
Second, there is a tremendous opportunity for U.S. entrepreneurs to make a name for themselves in Europe, consulting to or even joining European start-ups that desperately need help with product-to-market strategy and tactics. For those of you with “Blue State Blues” thinking about sitting out the next four years of American politics, here is your opportunity.
No doubt, this perspective will unfold and fill out as I continue my tour from Tel Aviv to London, then on to Paris, Madrid, and back to Northern France to visit the Friends of DEMO in Lille. And you can be sure I’ll share my travel log with you here.
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Chris Shipley is the executive producer of NetworkWorld’s DEMO Conferences, Editor of DEMOletter and a technology industry analyst for nearly 20 years. She can be reached at chris@demo.com. Shipley, has covered the personal technology business since 1984 and is regarded as one of the top analysts covering the technology industry today. Shipley has worked as a writer and editor for variety of technology consumer magazines, including PC Week, PC Magazine, PC/Computing, and InfoWorld, US Magazine and Working Woman. She has written two books on communications and Internet technology, has won numerous awards for journalistic excellence, and was named the #1 newsletter editor by Marketing Computers for two years in a row. To subscribe to DEMOletter please visit: http://www.idgexecforums.com/demoletter/index.html.
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