Beyond Silicon Valley

For more than a decade, Silicon Valley has been considered the epicenter of innovation. All the key elements of a tech revolution are located within a few miles of Interstate 280: a top education and research institution at Stanford; a consumer audience primed to try to adopt the next innovation; established companies with a history of technological innovation, and, of course, an engaged, active venture capitalist community on Sand Hill Road.

While there's no denying the role Silicon Valley has played in the development of the tech industry, the insularity of this community may prevent investors from finding the next hot start-up there. Their investment focus on this fertile area is understandable—if it isn't broken, why fix it? But right now, from Stockholm to Shanghai, new hubs of development are flourishing as a result of ambitious entrepreneurs who are cultivating ideas targeted toward the global consumer audience.

Having a global perspective played a critical role in my development as an entrepreneur. The same basic concept inspired Kazaa, Skype and Joost—a drive to democratize the Web. It's no accident that Skype emerged outside the United States. While many American companies worked on voice-over-Internet technologies, the existing U.S. telephony infrastructure hindered the development of consumer focused Internet service: telephone calls were considerably less expensive than elsewhere in the world, and basic telephone service was widely accessible. In many other countries, however, phone service was neither widely available nor affordable. Janus Friis and I identified that problem and created Skype to answer it.

Entrepreneurs with a global view will be the ones to succeed. Although the United States is still the largest consumer market, the innovations developed there don't always translate globally. Many emerging markets, like Brazil and South Korea, have high rates of broadband penetration but less robust traditional infrastructure—from "luxuries" like telecommunications, TV and radio to "basics" like payment systems, energy and electricity. Entrepreneurs in emerging markets are marrying these two elements—developing technologies that deliver these services over the Internet. Often these innovations provide better access to services than the more traditional methods of delivery. For example, it's possible that we could see technologies that optimize a consumer's or business's energy consumption on a minute-by-minute basis.

At the same time, these markets are flush with human capital—ambitious, intelligent individuals who have more appetite for the hard work and dedication needed to make a start-up succeed. From Eastern Europe to South America and Asia, varying degrees of economic, political or cultural repression have given way to more-market-friendly systems and a new generation determined to challenge the status quo and improve their own lives. National pride is a great motivator.

That's one of the reasons Janus and I have looked beyond Silicon Valley when it comes to building and staffing our businesses, and why we continue to do so now as investors through our venture firm Atomico.