Paul Holland: Latvia is doing the right thing

One of the most significant Latvian trade missions last year was to the US. It was led by President Edgars Rinkevics and Minister of Economics Viktors Valainis. Nearly 70 different Latvian companies took part. During the visit, the Investment and Development Agency of Latvia and the startup and technology conference TechChill organized a special networking event with Silicon Valley investors. 

The event took place at the greenest house in the US which belongs to the family of the long-time tech entrepreneur and investor Paul Holland and his wife Linda Yates, Founder and CEO of Mach49. They took the opportunity to meet the Latvian delegation. Later he shared his opinion about the Latvian startup community, as well as some ideas about how startups from this small country can become global. 

How did the Latvian delegation end up at your house?

My oldest daughter Kylie was a second-year student at the Stanford University. There is a programme offered by Latvian investor Andris K. Berzins and his team. The offer was to do a summer internship in Latvia, learn about the tech community there, and work in startups. So my daughter moved to Riga and she spent three months there. She worked for TechHub and they assigned her to work for startups as a very young marketing person. And then my wife and I went to visit Kylie in Riga. And we spent some time there and then all of us visited Estonia and Finland. What I can say about Latvia is that, here in the US, it is a beautiful and largely undiscovered country. People should be aware of it, and that it is a place many more people should visit and develop relationships with. 

When we were contacted by Andris saying that the president is going be here in Silicon Valley, we offered our home as a platform to gather startups, venture capitalists, entrepreneurs, and the Latvian delegation. It was a very positive event.

Did you manage to meet startups and tech entrepreneurs while you were visiting Latvia?

Yes, a little bit. We met a couple of people that were associated with the TechHub. My daughter was working in the startup Asya with a bunch of mathematicians and scientists, so we met those people. The number one key to success in technology is education. It is no surprise that, being placed between Stanford and Berkeley, Silicon Valley has prospered. 

Latvian tech entrepreneurs are very well-educated. The world is increasingly becoming flat. My belief is that Latvian startups have the same potential as we’ve seen from European-based startups. It is just a function of getting entrepreneurs in those situations where they can deal with larger markets. And they are able to compete there.

We compare ourselves to Estonians a lot. Did you experience some significant differences while visiting Estonia and talking to startups there?

I wouldn’t say I felt the difference. However, part of their success is Skype and a number of other startups that have come out of it. For some reason, Estonian entrepreneurs have started with a more global focus and they immediately see themselves as peers of European, Silicon Valley, and China-based startups.

I think that I can compare this situation with the difference between some states of America. There are states that up to this point have achieved more success in terms of technology companies and startups compared to some other states. But there is no reason why those other states can’t begin to also have success in that, because they too have access to smart entrepreneurs and capital. If I look at the Estonian ecosystem, there are active venture capitalists, liquidity, and returns there. Latvia just has to try to get closer to that to be more successful. 

Did you manage to talk to the President and Minister of Economics?

Yes, I spent a significant amount of time with the president. And I should say that they are doing all the right things. They are here. They have meetings. They have been to Stanford. They are trying to generate interest and they are trying to make the startup scene grow. These are all the right things to do. 

If you look at the US and Silicon Valley – when the Valley started in the 50’s and 60’s, neither Dwight D. Eisenhower, nor John F. Kennedy, nor Lyndon B. Johnson had any idea what was going on here. No sector of the States was aware of this. It was only with the emergence of Hewlett Packard and Intel and others that really got the attention. With two exceptions, the Silicon Valley scene really began without any particular help from the national government. One was the funding of defence establishment DARPA (The Defense Advanced Research Projects Agency – research and development agency of the United States Department of Defense responsible for the development of emerging technologies for use by the military), which resulted in the creation of the internet. The proximity of Stanford University was number two. As that communication vehicle began to take off, that simulated a lot of other activity. Once people started to do things, they wanted to do them better. 

To that extent, if I were in Latvia, I would be working to try to identify startups that can be nurtured because of contracts that can be led by the Latvian government. That would be something to get more things going. I don’t think that there is any place where government intervention has resulted in growth like Silicon Valley. It has to come from entrepreneurs, universities, and centres of excellence. These are the kind of things that get things started.      

And it should come from people’s mindset as well, right?

Yes. There should be a risk-oriented mindset and tolerance of failure. 

What is going on in Silicon Valley at the moment?

Silicon Valley usually prospers in any environment. Every time somebody wants to say that it is slowing down or it is too expensive or they have run out of ideas, which is ridiculous, a new wave of entrepreneurs comes in. 

The big wave of activity here is around AI – software and chipsets for AI. There are different kinds of innovations and it continues to go on. Fintech, crypto, all these things. These innovations are happening all over the world. For Latvia, you have to work just a little bit harder to get your share of that kind of business. Billions and billions of dollars from investors are flying into those fields even as we speak.

What is the right moment for the startup to move from a small country to the US? Is it even worth doing that?

If the startup is in New York or in London, I don’t think that there’s any need to move to Silicon Valley. The only reason is if you want to have a presence here. Otherwise, you are already in a large enough market space. That is required – you need a fundamental innovation and you need a big enough market to be able to prosper with that innovation. I think, if I were a Latvian entrepreneur, I would probably have a certain equivalent of headquarters in Latvia, and either here in Silicon Valley, or in New York. Other places might be Shanghai and possibly Dubai. 

What about the availability of talent in Silicon Valley?

It is always difficult to find and pay for high-quality talent, but we have more of it here than anywhere else. More engineers and technical and marketing people graduate here. And more people who spend summers as interns at Uber, AirBnb, Google and places like that. So the competition is fierce for people. But if someone has a fundamental idea that works and they can attract capital, they’ll be able to attract high-quality employees.