Why The Most Innovative Enterprise Tech Solutions Are Being Created Outside Silicon Valley
If there’s ever been a time to diversify visibility and access to the world’s fastest growing tech companies solving today’s biggest enterprise problems, it’s now. While Silicon Valley maintains its position as the leading consumer tech hub of the world, confidence is dwindling. In Q4 of 2018, the Silicon Valley Venture Capitalist Confidence Index, a quarterly survey of 28 Bay Area VCs, fell from the previous quarter's index reading of 3.52 to 3.2 on a 5 point scale—the lowest point since the end of the financial crisis. The report cited “political uncertainty” as the catalyst.
Add this to talent migration away from the Bay Area, due to skyrocketing housing costs, it seems venturing to cities outside Northern California for tech solutions is the most logical move. But aiming for geographic and cultural diversity in sourcing technology should be anything but a byproduct or last resort. It’s quite the opposite, as some of the world’s best enterprise technologies are being created in the most unexpected places.
For as much attention as major ecosystems like Silicon Valley, New York City, Tel Aviv and Berlin get, the innovation economy isn’t exclusively born in a specific set of cities. Innovation is bigger than geography. It’s a mindset. That’s why at Insight Partners, our analysts research and speak with 15,000 to 20,000 new software companies globally each year, while tracking 100,000 to 150,000 companies in our database. This is how Insight IGNITE matches the best tech solutions across the globe with large enterprise needs.
Necessity Breeds Innovation
Due to the sell fast, fail fast, pivot fast, burn capital fast mentality permeating the most renowned U.S. entrepreneurial communities, many startup teams are focused on sell-ing products rather than solving real problems. In short, they’re solutions looking for problems. However, companies in other pockets of the world are innovating with a much different ideology. Because many international companies based in off-the-beaten tech paths are often bootstrapped and have to generate revenue quickly, they have to solve an immediate problem—not a hypothetical complication— in order to survive. Rooted in the mindset of solving validated problems, their necessity breeds innovation.
Take the Madrid-based data analytics company Devo, a portfolio investment of Insight Partners, for example. When the cofounder and CTO, Pedro Castillo, was working for a bank during the recession in 2008 to 2009, the organization’s funding for data infra-structure froze completely. So he and his team invented a next generation data plat-form. It was their lack of resources and their need for a viable solution that drove them to create a product that is now massively disrupting the data space.
AI & Automation Solutions For Today’s Problems (Not Tomorrow’s Hypothetical Issues)
As companies and entire countries are racing to lead the AI and automation revolution, Insight Partners has invested in AI services critical to current digital transformation needs of key industries and large global enterprises. And yes, they were founded far outside of Silicon Valley.
The UK company Tractable has leveraged AI to transform the auto claims insurance business. Through a photo capturing app, when drivers get into accidents, they can photograph the damage and send the images to Tractable to be analyzed. After the damage is estimated, a report is sent to the body shop and a repair is scheduled. If the customer doesn’t want the car repaired, a check gets cut automatically. An example of measurable transformation, Tractable has made the bureaucratic claims process sim-ple and elegant.
PrecisionLender, founded in North Carolina, provides commercial bankers with insights and coaching, so they can structure the best deals for clients and their bank. The company’s virtual insights analyst Andi® gathers data on what’s working and what’s not, and delivers real-time advice to help craft winning, proﬁtable deals.
Meanwhile in Vienna, the software testing platform Tricentis accelerates the testing of costly digital transformation initiatives through automation. Across the globe in Vi-etnam, the agile software company QASymphony provides enterprise test manage-ment and testing solutions. Insight Partners merged these two companies, and they’re now the dominant players in the next generation, continuous testing market.
Opportunities to collaborate with leading software companies like these aren’t hard to come by if you know where to look. Just as successful digital transformation calls for a broad organizational purview, it requires a broad worldview. When the two intersect business acceleration is measurable, and solving problems takes precedence over selling products.