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Google has a plan to engineer the next Silicon Valleys




Laurent
Hrybyk/Backchannel



Vu Van is a CEO in San Francisco. Born in Vietnam, she is a
member of the auspicious class of Silicon Valley founders who are
immigrants  —  among US startups valued above $1 billion,
51 percent have a
foreign-born founder. Van earned her MBA at Stanford, locking
herself into a network of hatchling executives. She had a pain
point, realized that others shared her problem, and built a
company to solve it. She debuted her app, Elsa Speak, at SXSW
last year and promptly won an award. On paper, everything was
Silicon Valley perfect.

Except that in every other way, Van doesn’t fit the American
startup mold. She’s the only member of her company based in the
US. She geared up to build her app, an AI assistant for English
learners to improve their accents, by returning to Vietnam and
immersing herself in the needs of her initial target users.
Almost two years later, her seven employees are split between
Vietnam and Portugal.

Van doesn’t hesitate to call San Francisco home, but she also
stays for a business reason, which is that the networking is
second to none. “Vietnam is all about first-generation startups,”
Van explains. “Everyone is still figuring out what they’re doing,
and no one’s in a good place to mentor.” So she’s planted herself
in the one place on Earth where you can’t do your dry cleaning
without running into a potential advisor, expert, investor, or
future hire. For her company, that edge makes the time zone
patchwork worth the sacrifice of sleep and sanity.

So when Van first heard about Google’s new Launchpad Accelerator,
she was skeptical. The company was in effect promising mature
startups from emerging markets the most epic networking service
on the planet: For every hiccup Elsa was facing, Google would
match her and two colleagues with a top expert  —  sometimes
the top expert  —  in that area. For free, with no
catch, no quid pro quo. Van decided to give it a shot. Despite
her Bay Area bonafides, launching a product in Vietnam had still
been a slog.

Elsa is one of the rising stars of The Rest of the World — and
Google has a plan to get in the door of companies like Van’s and
shape them in its image. It wants to educate them on the best
practices of product development and speed up their learning
curves. Think of it as strategic philanthropy: In exchange for
helping these companies grow, Google gets to scrutinize their
books, observe how its own products are being used (or not) in
less familiar markets, and spread its gospel to the far reaches
of the globe. Eventually, these companies will play an enormous
role in getting millions more people to conduct their lives
online, and Google will be there as well, ready to scoop up new
users.

“The one thing emerging markets are missing is success stories,”
says Roy Glasberg, Launchpad’s global manager. “You need an
ecosystem.” A wiry Israeli sporting close-cropped hair and
performance-wear chic, Glasberg is articulating an ideology
percolating inside Google about why so few big companies emerge
from outside Silicon Valley. He and his colleagues say the word
“ecosystem” a lot.

It’s a subtle, unstated way of contrasting the rich environment
of the Bay Area, where investors, board members, competitors, and
talented workers swirl in a self-pollinating bubble, with the
relative deserts of countries such as Indonesia, Mexico, or even
bigger players like Brazil. In the ecosystem view, the Bay Area
is the goldilocks planet, and the rest of the world has the
inhospitable climate of Mars or Mercury.

Google’s theory is that until some company  —  any company!  —
 has produced a massive IPO or engineered itself an eye-popping
acquisition, a developing region won’t amass the resources it
needs to support entrepreneurship. Venture capitalists are
uneasy, or simply absent. The talent pool is shallow, with few
local technologists who have first-hand experience transforming
small companies into large ones. When you wonder where to find a
good data scientist, or how to negotiate better terms in your
series A, or what to fix in your app to get a better conversion
rate, no one around you has the answers.

So a delta force within Google, led by Glasberg, set out to see
if it could do what countless governments, regional technology
parks, and grant programs have failed to do before it: fire up
startup kilns around the world that then take on a life of their
own. They would do so by picking the sharpest, most proven
startups, and showering them with unconditional support for six
months (and $50,000, but who’s counting) — essentially treating
them as integrated wings of Google for the duration.

To earn that kind of access, these startups have to be much more
than a Gucci knockoff. They’re not just the Postmates of the
Philippines, or the Tesla of Thailand. They are fiercely unique,
tackling unsolved problems and producing code that rivals
anything emerging from San Francisco or the South Bay. These are
the brightest minds of elsewhere. And Google’s now giving them a
jolt of adrenaline straight from the planet’s entrepreneurial
mothership: itself.



San Francisco
Many entrepreneurs live in
San Francisco because the networking opportunities are
unbeatable.

Benny
Marty/Shutterstock



Transporting the magic of Silicon Valley to
other cities is a trope so old, and so beloved by government
bureaucrats, that these days it hardly quickens the pulse.
Silicon Alley. Silicon Glen. Silicon Wadi. Silicon Fen.

Seated at a small table in the brand new San Francisco offices of
the Launchpad Accelerator, Glasberg explains why Google’s
approach is fundamentally different. “No one else is looking at
emerging markets as a whole,” he says.

Around him, a hundred-some entrepreneurs huddle in small group
meetings with an elder statesman (or sometimes woman) of
technology, or stare intently at their screens while seated
elbow-to-elbow. We had to hunt to find two empty chairs, and
eventually settled in between clusters of men leaning against
low-slung cabinets, messenger bags strewn at their feet. The
office hums with the low, persistent drone of voices.

Glasberg, who first joined Google in Tel Aviv after a career in
business development, has been formulating his own global theory
of startup victory. “When you have a few successful startups,
they come back and start investing in their community, starting
funds,” Glasberg says. “You get a whole community boosting other
startups.” He starts ticking off countries. “You don’t have that
in Latin America. Brazil has never had a big exit. Argentina has
had one.” From an investor’s point of view, he adds, startups
“are already a risky business. So why should I go into a country
that’s never had an exit?”

The local venture capitalists who do take a stake in emerging
market companies tend to push for a faster path to monetization
than do the firms on Sand Hill Road, which in turn affects how a
startup develops its products. (With more generous funding,
entrepreneurs often feel free to chase after a riskier,
higher-payoff goal.) Some investors may demand a bigger cut of
the company. The startup’s workers, meanwhile, are similarly
circumspect about their employers, often requiring high salaries
rather than agreeing to work for equity.

The problems don’t end with investment. Without having played
host to past startups that either IPO’d or got acquired, a
country will be home to few — if any — entrepreneurs with
first-hand experience of building a company from ten employees to
hundreds or thousands, navigating that country’s particular
regulatory landscape, or overcoming the challenges that define
many emerging markets, such as poor connectivity. In a word,
they’re missing expertise.

So in 2015, Glasberg started scheming how Google might throw its
weight behind solving what seemed to be the core problem — the
lack of success stories. They settled on a strategy: They’d
identify the best companies and try to solve as many of their
business challenges as they could in a two-week Bay Area
immersion program, followed by six months of remote mentorship.

To have the most impact, Glasberg says, he and his collaborators
decided they wanted more mature startups, whose products already
have a healthy base of users. Often these companies are two or
three years old, sometimes with 100 or more employees, and most
of them have already raised a round or two of funding. Many of
them are profitable. So rather than risk alienating the most
promising companies, which might not want to give up any more
slices of their equity, the Launchpad team decided that it would
simply advise  —  and reap rewards for Google through other
channels.

“The equity-free model lets us play the accelerator game further
down the startup’s evolution,” explains Josh Yellin, a program
manager on Glasberg’s team. A former river ecologist, he joined
Google in September 2015 to manage programming for the company’s
startup communities, before moving over to help build the nascent
accelerator. While he was preparing for Launchpad’s inaugural
Winter 2016 class, the founders he talked to were at first
confused by the word “accelerator,” which usually applies to
earlier-stage startups, when really he was targeting companies on
the verge of rapid expansion. “We tossed around the word
‘scale-a-rator,’ but that sounds like some kind of animal no one
would want to meet,” Yellin recalls.

Last month, the third group of Launchpad inductees  —  three or
so employees each from 31 companies out of nine countries  —
 went through their two-week blitz at Google’s Bay Area offices.
Around 150 mentors also joined, many flying in from around the
world to conduct deep, screen-by-screen code reviews, assess
every app’s design in minute detail, and pore over each company’s
hiring practices.

“We now have three classes of data of every mentorship session
that happens. We have a note from every mentor of what came out
of it — what was the challenge, and what was the solution
recommended,” Yellin says. Using all those reports, “we’re
basically creating a map of what makes startups successful around
the world.”

When they joined, the founders, many of them in
their thirties, many of them armed with battle-tested
self-assurance, were told they could name anyone among Google’s
almost 50,000 employees, and the company would broker an
introduction. It wasn’t hyperbole.

One founder and CEO, Reynazran Royono of Indonesia’s Snapcart,
came to Launchpad nagged by an AI problem his team hadn’t solved.
Snapcart users scan their receipts to earn cash-back rewards, but
as the company grew to include 5,000 different grocery store
chains and receipt formats, its engineers had stumbled into image
recognition purgatory.

So he requested a session with an expert on Tensorflow, Google’s
widely used AI platform, and discovered that what he’d thought of
as a mere annoyance was actually an open research question. “We
talked to the Tensorflow guy, he said what we’re trying to crack
is very difficult and he wanted to help,” Royono says. “But we’d
get not just support from his team, but from the Google Brain
guys, or the Ph.D. guys, to get help in cracking this problem.”

A Brazilian startup called Portal Telemedicina, meanwhile, went
straight for the crown jewels. It has built up a network of
online doctors who can diagnose the scans and data generated by
numerous clinics’ medical devices, and it also relies heavily on
AI. “We said, OK, I want to talk to the head of artificial
intelligence at Google,” says Rafael Figueroa, the company’s
founder and CEO. “They connected us with the guy in England, who,
like, invented this stuff. He knows stuff that wasn’t available
online anywhere!”

The companies don’t just get resolution to bugs, though, as if
they’re attending office hours back in college. The program is
also built to spread startup best practices through hundreds of
one-on-one sessions. For Van, the Vietnamese founder of Elsa, a
prime goal was to steep two of her colleagues from Portugal in
the Silicon Valley product development ethos: Iterate quickly,
and don’t be afraid to launch imperfect products.

In one meeting with a mentor, the team discussed how to solve
some issues with its app’s onboarding flow. They were noticing
that new users were dropping out partway through the app’s
sign-up process, but they couldn’t figure out how to plug the
leak. Her mentor, a renowned user experience expert named Jacob
Greenshpan, suggested she try implementing a specific change over
the weekend and see what happens. She said she’d think about it,
falling back into a pattern of methodical deliberation that often
characterized her team’s work. “And he said, ‘No, this is your
homework for Saturday.’ So I said, ‘OK. Fine.’ And it worked! We
got a 25 percent improvement,” she marvels.

Van is the kind of entrepreneur who actually does her homework —
who’ll read the 100-page manual and pore over every online
resource she can find. But on normal days, she’s still
effectively working alone. And her team can only absorb so many
tech mantras from afar. Those limitations turn into the
months-long headaches of, say, an imperfect onboarding
experience.

What these entrepreneurs’ stories suggest is there’s an implicit
exceptionalism to how we view successful startups. The usual
story goes something like this: The right group of founders got
together, built an outstanding piece of software, and, through
their collective brilliance, managed to accrue thousands and then
millions of users.

That framework is not wrong, exactly  —  but it underestimates
the enormous boost these companies get by virtue of geography and
timing. Silicon Valley startups are like plants in a nursery,
kept out of the cold, bathed in sunlight, and lightly spritzed on
a daily basis. Out in the wild they’d end up more scraggly, if
they survive at all — so it’s a good thing someone came around
beforehand to build their cozy greenhouse.

But even as these companies from outside the Valley get help from
Google, some of them are beginning to compete with it. Van, for
example, recently hired an engineer with expertise in AI out from
under Google’s nose. Both Google and Amazon had made that
engineer offers with significantly more money than Elsa could
muster, Van says. But Elsa’s mission, with its potential to have
a strong social impact, resonated with the engineer, so she
turned down the Americans’ princely sums and moved from her home
in Ukraine to join the team in Portugal.

Google, meanwhile, gains plenty from bringing
these startups into its fold. To get accepted, the companies
undergo a grueling review, opening their books fully to Google
employees. What emerges are not only the financial and technical
details of individual companies, but also a growing portrait of
startup health in a dozen different trying environments.

Then there’s the product evangelism that occurs throughout the
program. It’s no secret that Google has developed many platforms
useful to startups — Firebase, Tensorflow, Google Cloud — and
through Launchpad it’s assembled a captive audience of stellar
engineers to listen as its employees rhapsodize about their
favorite tools. “If they get the best startups to use their
products in an early stage, it’s really hard to switch in the
future, because the cost of switching is so high,” Van says.

Glasberg takes a broader view. “Google gets two things out of
this. One is really understanding what it takes to be a
successful entrepreneur in emerging markets.” The other is that
they can observe, under a microscope, developers from all corners
of the world using Google products  —  the ultimate feedback. “We
see firsthand what is working and what is not,” Glasberg says.
“This is super critical, because these markets are the next
billion. That’s where the future is.”

The present, however, remains stubbornly in the Bay Area. Van has
just returned from another of her lightning trips to visit her
team in Vietnam. But after each lap of the globe she always
settles back into San Francisco, to drink from the firehose once
more.

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