I just came back from a trip to Europe and let me tell you: Belgian chocolate, raw herring from Holland and ficelle from France - nothing is more authentic and delicious.

But few of these travel well or find a large deserving audience in the United States. Much like technology.

The state of the technology industry and the accompanying investment ecosystem in the US are quite a bit more developed than in Europe, 15 years at least.

In the US, roughly $30B per year is poured into early stage companies by some 300 investors in my backyard in Palo Alto, not including Private Equity deals. In contrast, only a handful European early stage VCs exist and the majority of all european investments are late stage investments done by Private Equity firms.

In Europe, early stage VC valuations hover around $1M, compared to $4-7M in the US. As a result desperate european entrepreneurs often default to Angels that show some flexibility, but those investors are often very inexperienced with the technology sector and early stage investing or the combination. They made their money somewhere else. Because of the young history of technology success in Europe, very few european investors (either VC or Angel) have actually had the personal experience of building an early stage technology company from scratch.

To sum it up, european investors (with a few exceptions) take large early equity stakes, provide limited relevant business insight and push those companies to early profitability (even at 250K euro investment levels). Selling a product or a service too hastily, before it is ready to enter a global marketplace delivers NO validation of the business, good or bad. But it is a sure way to slow down its innovation and differentiation.

So, underdeveloped access to quality early stage money makes life of entrepreneurs in Europe quite difficult.

But, let's assume you passed the bar on all the above and your company is on its way to the United States. No one can stop you in the pursuit of the great early exit opportunities only Silicon Valley can offer.

So here are some things to be aware of:

1/ A cherry, picked by an investor in Europe is not always a cherry in the US. Be sure you understand - or seek advice about the timing differences between continents that attract follow-on investors in the US. Some of that timing has to do with technology, but market timing is even more crucial.

2/ Plan ahead. Allocate a larger fundraising runway than you would in Europe. To US investors foreign companies are yet another risk they need to mitigate. By default you are less attractive than a US company.

3/ Modify your operating plan. Change it from a plan to profitability to a plan to market dominance (which could include profitability but can also have other primary denominations as drivers, such as owning a majority of eye-balls in the consumer space).

4/ Move your headquarters to the US. Without it you'll find very few US investors interested.

5/ Assuming you get this far, be open to a recap. US investors understand the equilibrium of shareholdings will provide the best business value, not exorbitant ownership of the initial investor achieved through a low initial valuation. But since the US valuation should increase significantly, the initial investors should not lose too much net value, if at all.

6/ Hire a local management team that understands how to perform in a petri-dish that is quite different from Europe.

My final recommendation is to be prepared before you come over and not put your head in the sand, I can give you a long (and still growing) list of foreign companies that were forced to move back.

For larger US VC firms there is a fantastic opportunity to scout for technologists in Europe and fold them into their US investment model before they've taken in too much local money. I see technologists in Europe building innovation that is at least as good as the in the US. Remember the most delicious chocolates from Belgium?

But, the worlds largest chocolate factory is Hershey's located in the US. The name of the game remains matching sufficient technological capability to a fast growing market, in the same way Hershey's reaches a much larger audience than Belgian chocolates - with a quality that is good enough for most. Market timing, not technology, is key.

Tags: Investment, European, Private Equity, VC, Angels, Marketplace, Markets, Silicon Valley, Palo Alto

We can look at Microsoft and Apple and compare them strategically: Microsoft is the plumbing for a commoditized desktop computing market where Apple delivers a unique computing experience based primarily on its proprietary technology stack. Microsoft as the complacent market leader, Apple as the wannabe - fighting hard to win share. Apple, in tune with today's computing lifestyle as the innovator, Microsoft as the raw execution machine, buying innovation where needed.

But for me, in the shoes of an end-user, all of that is summed up in a simple way:
Type in CNN in Safari (without url etc, just as we wrote it here) and then type in CNN (again without any internet "grammar") in Explorer. Here is what you get:

Microsoft (standard installation Windows XP):


Apple (standard installation OS10.4+):


Bottom line: with Apple you get what you expect, with Microsoft you get spun into their web, literally.

Maybe this is Microsoft's tactic to produce page hits to compete with Google: any user that doesn't know how to type in a URL will be rerouted by default to MSN search. I call that cheating, Microsoft. But even with those tricks, you still need Yahoo!

Getting and keeping customers is about integrity and authenticity, not sneaky monetization techniques to squeeze every cent out of every visitor - leading them down the endless path of search. I am glad Apple is around and here to stay. There is nothing better than getting what you want, quickly.

BTW: talking about Microsoft's complacency, does it still not have anti-aliasing sorted out - or is that the big improvement in Vista?

Tags: Apple, Microsoft, Experience, Yahoo

We communicate with each other using a common language and we obviously become more effective when we all understand that language. However, technology complicates our lives as each piece of technology we interact with requires us to learn a new (proprietary) language; a set of rules, technology grammar and a unique user-interface experience.

Think about it, when Larry King on national TV stumbles over his own URL (yes, language) and messes up http, semicolon and slash (or was it backslash), I can't help but think about the hell we put users through to use the internet. Only if you understand that language do you get to benefit from its capabilities. That's like forcing anyone that wants to vacation in Mexico to speak Spanish first. The Mexican tourist industry would grind to a halt.

It gets worse, for example, to make photographs look better, Photoshop (and now with Photoshop Express) and many other photo-editing applications deploy a language that requires users to understand the intricacies of color and light and apply that language in the right order.

Here is a synopsis of the skill level my mother-in-law would need to master in order to make her photographs look better: first increase the dynamic range using a histogram, then use curves to change the tonal values to your liking, apply the right white balance and improve saturation and vibrance. Indeed, what I just described is the introduction of yet another language to solve a pretty mundane problem.

To create a web page, we introduce yet another language, a compilation of HTML, Perl, Ajax and Flash usually contained within a desktop product with its own proprietary language. To write a book we wrestle with 90% of Microsoft Word's functionality and language we seldom use, trying to figure out how to create a table of contents. In Excel we use another language consisting of non-intuitive formulas (like sum() ) to derive values from other cells. Should I go on?

So why is it that we seem to get away with it - or are we? For one, lots of people make money understanding a computing language that fewer others do. Web designers don't always create better design, but they understand the language of design, and can implement it. So, web designers don't want you to know there are better ways to do this. Adobe is probably not in a hurry to remove the language and erode its premium market, it could have created much more democratization in the website creation process. Many times have designers, with corporate marketeers in tow, abjected the use of Rapidweaver, a tool that attempts to democratize web design (this site is built with it).

But we are fooling ourselves. The democratization of the internet requires that we make technology more accessible and easier to understand and implement. Only then will it reach real mass adoption.

We could easily build technology that figures out how to make the majority of images look better, or design a web page by drawing it - rather than programming, or have Word make recommendations for a table of contents when it discovers one.

The iPhone is a great example of how packaging existing technologies in a different way, can make people feel that they don't need to learn a new language to communicate with it. My 3 year old daughter uses it. Each of the individual technologies in the iPhone had been around for a while, Apple "just" packaged it so the language became intuitive.

But Apple is not the only vendor that can remove the computing language from the equation, others just need to pay attention to it.

So when you design products, pay attention to the removal of the language, fewer yet intuitive options - rather than more. After all, for thousands of years, we ourselves, have communicated in many other ways than verbal, the majority of our communication remains behavioral.

Innovation has become the art of packaging a flawless user experience, rather than a race to add features. The latter quickly becomes commoditized anyway.

Tags: Apple, IPhone, Experience, Microsoft, Adobe, Photography, Internet, Democracy, Communication, Innovation