What founders from Saxony are looking for in Silicon Valley

Google, Apple, OpenAI: Some of the most influential companies of all are located in Silicon Valley. This attracts founders from all over the world looking for ideas. From Nils Dampz.

Google, Apple, OpenAI: Some of the most influential companies of all are located in Silicon Valley. This attracts founders from all over the world looking for ideas.

A fountain bubbles and a squirrel runs up a tree next to it. It is very quiet, almost idyllic in Palo Alto, a small town in the middle of Silicon Valley. Single-family houses everywhere, often with an electric car in front of them, sometimes two.

Google was founded in a garage six minutes’ drive away. The meta headquarters is ten minutes away. A bus rolls up, a group from Saxony gets out, 24 participants, almost only men. “It’s so good to see you!” The start-up founders already have the typical Silicon Valley tone.

New ideas for new jobs

“We’ve been here since Saturday – or Sunday?” one participant asks himself, the jet lag is still noticeable. The “innovation trip” lasts five days, organized by the Saxony Economic Development Agency. The calendar is scheduled, now there is an appointment at German Accelerator – a company that is also financed by the Federal Ministry of Economics.

She advises German start-ups that want to expand their business in the USA. Ideally, this should also lead to new jobs in Germany.

Not a good year for start-ups

Overall, 2023 was not a good year for start-ups. Venture capitalists invested $170.6 billion in the United States last year, down 30 percent from the previous year. These are the results of the analysis company PitchBook.

Afterwards, investments in newly founded companies also declined worldwide. The reasons are crises, rising interest rates and high inflation. In Germany, too, start-ups collected less money. According to an analysis by EY, it was six billion euros last year, 39 percent less than in 2022.

The big exception are start-ups that build their business model on technology related to artificial intelligence (AI) – investments here increased. In the US, venture capitalists and major software firms have poured $27 billion into AI startups, according to PitchBook. In Germany, AI companies raised more than four times as much money. In 2022 it was 220 million euros, then in 2023 it was 943 million.

A “good story” as a starting point?

“Silicon Valley is not a place you can visit, but a mindset. I think you can take a lot from it,” says Matthias Domes, founder from Chemnitz. Making new contacts, coming up with new ideas, initiating business in the USA, that’s what the trip is all about.

“German companies are working on the product in every detail, US start-ups are working on a good story first,” says Hedi Razavi from German Accelerator. The entrepreneur Frank Seinschedt from Bannewitz believes the US approach is better: “You can’t wait like in Old Germany until you have the 110 percent solution.”

“Everything goes much faster”

In Silicon Valley, everything moves much faster, observes Steffen Roschek, start-up managing director from Bautzen, who is also a member of the CDU district association there. It’s about “developing the best ideas in the now and here over the next two, three to five years and selling them with maximum profit,” he says.

Before the trip, some participants were also in Las Vegas at the Consumer Electronics Show (CES), a trade fair for consumer electronics. “We Germans say it’s a trade fair, the American name ends with ‘show’, and that’s what it is,” says Roschek.

Less what is sold, but rather how something is sold – this thinking is part of the “Silicon Valley Mindset”. The term comes up this afternoon. Participants like Roschek want to take more of it with them to Germany. “We perceived Silicon Valley as a large rural area, and what naturally inspires me here is: How can I get my Upper Lusatia into the same area at some point?”

AI “the megatrend”

The topic of artificial intelligence naturally also plays a major role on this trip – “the megatrend, that’s why you have to come here”.

The bus will move on straight away. Next stop: Apple. Then it’s off to a “happy hour”. As he leaves, Roschek says: “As Saxon companies, we can no longer avoid it. We have to invest here.”