World Innovation Summit in Barcelona

I spent the last two days at the World Innovation Summit here in Barcelona. It was relatively high profile, with two A list speakers. The atmosphere was a bit too formal for my taste, but I suppose that innovators in medicine, the automotive industry, etc still need to wear suits. The event was entirely in English, which was a nice change for me.

The first big name was Dennis Crowley, the founder of FourSquare, who told the story about the founding of his company and his experiences as an entrepreneur. What struck me was how his motivation was basically “I wanted to be able to do X, no one else was doing it, so I just did it myself”. No estimates of billion dollar markets, gross margins, user studies, etc. After his talk he got pummeled by a VC (who was nice enough to add a disclaimer that he was an investor in a competitor to FourSquare), with the usual questions about profitability, etc. Same questions that people were asking about Facebook and Google before. Dennis took it all in good humor.

Richard Florida, an expert in the field of regional economic development was the other featured speaker. He is somewhat controversial in the US for his thesis that neighborhoods that attract gays tend to be the more creative and innovative parts of the city. Richard got an incredibly formal introduction, with a table of four introducers giving long-winded speeches (is that a normal thing to do here?). The guy from the Barcelona town hall decided play local politics and give his introduction in Catalan (with no translation provided). Richard was generally very positive about Barcelona’s progress as a center of innovation (one of very few cities where the Olympics actually had a positive impact).

The second day was a bit less crowded and focused more on individual entrepreneurs (each given 3 minutes to do an “elevator pitch”). My personal favorites were the chicken vaccine guy from Mexico and the fully automatic roti machine about to take the market by storm in India.

It was very cool to see the Tesla car parked outside the convention center, and Cristiano Carlutti from TESLA was there to give his pitch during the Electric Vehicle Mobility session.

The round-table on health-care innovation was very interesting. The “virtualization” of biotech, where a startup can outsource pretty much all the capital intensive chemistry, trials, etc and concentrate entirely on proof-of-concept was a very encouraging development. It also seems like the FDA’s risk-aversion is set on completely strangling new product development in the US. Elisabet de los Pinos made some interesting points about how European government grants require you to do the exact opposite (hire lots of post-docs) of what you should really do (prove your hypothesis at the lowest possible cost).

Ken Morse made us all feel like MBA students as he tried to spice up a round table on IT innovation by having participants come up with 3 cosmic ideas on the future of IT. These included the death of IT, the death of Microsoft, the death of Google, the death of humanity (in the form of large asteroids, but apparently virtual idea shaped ones). There was some disagreement about whether CIOs should be fired, turned into sales people or just executed on the spot. The guy from PriceLine seemed to think he’d stumbled into a session on motivational speaking, so he spent all his time blathering on about how every morning he spends some time finding out what is possible today that wasn’t possible yesterday.

Finally a VP from Google came and gave the same talk I’ve seen a dozen times by different Googlers about how innovation happens at Google. He said Google does innovation based on hard data rather than dictatorial CEOs… meow. He did show off his iPad, so it wasn’t all Apple-hating.

Computer Envy

I work for a large corporation on a special project unrelated to most of the other business that goes on here in Spain. So I deal with the Spanish subsidiary sometimes when I need things like money, computers, cheque gourmets, etc. The other day I ordered a new computer. I received an email yesterday stating that my computer had arrived, but that there was a problem and it was being held in storage until the issue was resolved.

“A problem?” I asked.

“Yes, the computer has an issue”

“Is it defective?”

“No, it does not conform to the corporate standard”

“Hmm… like the wrong brand?”

“No. The screen is too big, the hard drive is too large and it has too much memory”

“I don’t understand, the purchase order was approved by my VP”

“That doesn’t matter. It does not conform to the corporate standards for the Spanish subsidiary”

“Why do you care?”

“If your co-workers saw your computer they would be jealous and want to be treated the same”

My boss ended having to yell some common sense into the guy (it just a poor IT drone). A couple days later this sticker arrived in the mail. I love my boss.

Regionalism and lack of excellence

Something that I find a bit depressing in Spain is that the autonomous region system has resulted in a huge amount of overlap and lack of really excellent specialized institutions. There are a couple outliers like UPC in Barcelona.

Every autonomous community wants to have the best center for computer science, cancer research, etc, etc. Unfortunately there aren’t that many top people and for the more capital intensive areas like nuclear medicine, there isn’t really the budget. So instead of having one great research center advancing the state of the art, you have 17 crappy ones just wasting money.

They usually have very nice buildings though. Spain loves building lots of buildings. Just look at all those nice empty office buildings north of Sant Cugat. All ready for those top researchers to move in as soon as they can figure out how to pay for them, since they blew all the money on the buildings.

This is a country brimming with creativity, but lacking the resources to focus it and turn it into something great.

State of High Tech in Barcelona

I've been spending the last two years trying to infiltrate the high-tech scene here in Barcelona. The sad thing is that it is pathetically small. Everyone knows everyone else because, well, there's not a whole lot of us.

Ironically, there's actually quite a bit of money available from the local venture capital, but they can't find anyone worthwhile to spend it on.

Local talent is very immature and senior leadership is few and far between.

For a vibrant high tech center, you really cannot build it from home grown talent. I've worked in Silicon Valley and the number of people that I met who were actually from that area was very small. Large multinationals (Google, MS, Intel, etc) are the magnets that can bring in enough talent to create a self-sustaining ecosystem.

Unfortunately, Catalunya's pissing match with the central government has created an environment that most multinationals don't want to deal with. The system of enchufe also means that your choice between Barcelona and Madrid is a matter of "taking sides", so Madrid is really the safe choice, since Madrid enchufe is really going to be what makes it happen, rather than those jokers in the Generalitat. Oh maybe they'll put a sales office in Barcelona for those juicy government deals. Other than that, they pretty much steer clear of Catalunya.

The fact is, if you set up your main office in Barcelona, you will not be able to recruit people from anywhere else in Spain. Whereas in Madrid, it's trivial to recruit from anywhere in Spain. In addition, Madrid is a gateway into South America, which provides incredible growth opportunities in the emerging markets. Catalunya tries to do its own thing, but mostly ends up confusing foreigners who don't understand the local politics. It's too bad, because Catalunya used to have great connections to South America (ie habaneras)

It's been sad for me to meet very talented people and then have to say goodbye to them after they get frustrated from the lack of seriousness here. My situation is weird enough that none of this bothers me too much, so I'm still here :)

Update:

Just to be clear, it's pretty easy to recruit young smart people from all around the world to Barcelona. It's one of the big plusses. However, trying to get high level experienced folks to move here is a nightmare, even from other parts of Spain. Remember, these people are not the desperate ones, but the people who could get a job anywhere they want.

The newsweek article "Silicon Envy" is a good description of the various failures around Europe to create the next silicon valley.