Former Silicon Valley Exec Sees

During the dark days after 9/11, when the small turf held by enlightened values in the US decisively lost more ground, Phil Chang decided to leave his life and career in San Francisco to start anew in London. At the time, he was heading a software company that employed fifty people, a survivor of the dotcom bust, and lived high up in a converted loft with a view of downtown SF in the trendy Mission district.

The company he co-founded occupied the entire ground floor of the same building and paid a tiny rent because he and his co-founders had the foresight to secure a lease five years previously, before dotcom fever had consumed San Francisco in yet another gold rush boom. This was the third such boom and bust cycle Mr. Chang had lived and worked through.

As part of the program dictated by venture funding, he handed the reins of his company over to a “seasoned” CEO and liquidated the physical trappings of his 20 years in the SF Bay Area. With the gains from previous real estate deals and a surfeit of stock in his former company, he went to London to see how the Old World looked.

What he found surprised him. In London he felt at home with the lingering presence of traditional values, while observing that the ethos of the Commonwealth resulted in integration of ethnic diversity, not just assimilation. He also saw a society modernising at a frantic pace, playing catch-up with the prosperity of post-war America.

In fact, the old and the new co-existed to such an extent that he characterised London as a cross between New York and San Francisco, from strictly an American perspective. Add to this the soothing comfort of Old World values, and London became the most desirable city in the world, as long as one sought out its extremes. And no, the weather is not that bad – again, a cross between New York and SF.

As a high tech visionary and entrepreneur, he saw a great ferment of innovation, limited only by the immaturity of infrastructure and the challenge of international markets. Creativity is a hallmark of the British culture, combined with rigour in training and education (high by broad American standards). After some analysis and considering the formidable history of innovation here, he reasoned that there was enormous potential for Britain to become, yet again, a powerhouse of innovation.

The secret behind the success of Silicon Valley became quite plain in hindsight: the American market and marketing machine. US companies have to step up to a national scope, so the scale of business is just larger. Career paths are open-ended, and the talent pool of professional management is immense. Big ideas with appropriate management can tap into vast pools of private equity – under certain conditions.

But is opportunity greater in the US? The sceptical British mindset always bemoans and perhaps contributes to the self-limiting nature of a conservative attitude. In America one could shoot for the moon and people would support you – at least verbally. In Britain they would shoot you down, though that is changing rapidly.

There is always the other side of the coin, and in America that side is getting more ominous. The disparity between the have’s and have not’s has gotten so large that without privileged access to capital, good ideas will suffer in obscurity. Even when capital is available, it is nearly guaranteed that bigger guns with more capital will be competing. Big aspirations simply have to burrow into niches to survive, and even when visionary insight gets there first, the market may take too long to catch up.

Nevertheless, the Googles and Yahoos do sometimes make it to success, and the successes can be quite grand indeed. But no one notices the litter of carcasses left in their wake.

Add to this the extremes of sentiment in US business cycles – when the NASDAQ was at its peak money was pouring into dotcoms and dotcoms only, after the crash not a penny was available for start-ups of any kind, and you might begin to realise that Britain has a lot going for it. Yes, it is playing catch up, and yes, it is quickly adopting the ugly qualities of the American way, but the traditional values provide a counter-balancing force to the ravages of raw capitalism.

First of all, there is nothing wrong with a degree of scepticism. After the brainstorming stage, all good ideas benefit from a thorough thinking through of obstacles and implications. This is one of Britain’s inherent strengths: a love of debate, and the value placed upon individual opinions.

By inference, the value placed upon individual opinions means there is value placed upon individuals. Isn’t that the basic tenet of freedom? One could argue that the basis of democracy is the belief that the individual has inalienable rights. But the granting of rights is fundamentally different from the expectations built into a culture around those rights.

Despite, and perhaps because of a stodgy political system, the British population feels no qualms about challenging its political leaders. Individuals are not only empowered, they are expected to form judgments and reason through arguments. Diversity of opinion results in richer thought. Political agendas are seen as just that: agendas. The greatest defence against manipulation is the individual human brain.

The US may be suffering from freedom delivered on a silver plate. When one assumes freedom is a basic condition, it is all too easily snatched away. Therefore, a degree of caution and a wary eye are valuable counter-balancing forces to blind freedom. In the northeastern US, the fight against the “establishment” is an elusive conflict being waged by a small minority, and that minority is losing.

In terms of practical concerns for Britain, Mr. Chang has a simple prescription: don’t swallow the American pill without selectivity and careful modification, and learn valuable lessons from across the pond that can be of true benefit.

As an example, he sees a lingering disparity between economic classes in Britain, which may have a limiting influence on the talent pool of professional management. This in turn is affected by the smaller market, which can only be overcome by leaping across the Channel or the pond. By establishing a continuous career progression, individuals can steadily move up the path to professional management, without working solely for large multi-nationals. And the only way to do that is to establish an export infrastructure that provides economies of scale for small companies tackling international markets.

In short, he sees ample support for start-ups and exceeding creativity, but limiting environmental variables when it comes to business growth and execution.

Mr. Chang is open to discussing ways in which he can help businesses in the UK. He offers a free report called “Innovation in Britain” if you send him an email. He can be reached at:

Philip I. Chang

Practical Innovation and Change

Management, Markets and Mentoring for Growth

0207 482 5244

07799 660 435

pic@fintelligence.net