Switzerland is associated primarily with banks, expensive wristwatches and chocolate. It is certainly not seen as Europe’s startup incubator. London and Berlin gather all the spotlight with everyone else failing off the radar.

I also viewed Switzerland in this way until I started to visit more often, attend events and talk to some founders and investors. This changed my perspective.

Now I believe Switzerland is the country that has the highest potential to become the Europe’s startup hub, because it provides three crucial components needed for them to flourish.

Diversity

20% of people living in Switzerland now are foreign-born (source). Since Switzerland didn’t relentlessly import “cheap labor” for menial jobs as much as UK or Germany did (you can see natives driving trams and buses in Zurich – a rarity in London) much of those 20% are highly qualified professionals. Many of them even have startup experience already. This means there is a pool of people with right qualifications, diverse backgrounds, experiences, hailing from different cultures.

So it turns out Switzerland has a lot of diversity – more than I expected – and has it primarily exactly where it is beneficial: in business, high-tech, academia etc. I consider it important, because I believe diversity creates a more fertile ground for innovation than uniformity.

My observations confirm this: more than half of Swiss startups I met over the course of this year have expats involved

Stability

Switzerland with its unique governance structure and democratic process is a very stable country. The laws influencing business are very fair and stable – at least when compared to other countries in Europe. Last thing to worry about as an entrepreneur is that some stupid government decision will change the rules of the game overnight. Because the government is fairly decentralized (many decisions affecting business & life are made by local government bodies) it is also very aware of its impact and fairly business-friendly.

I don’t have firsthand experience here, but tales told by people I know who moved their businesses to Switzerland confirm this.
Why this is important for a startup? Well, startups are high-risk, unstable ventures by nature, but at least by operating in a fairly stable country you have one problem less to worry about. Insights from those more directly involved confirm this: I spoke to a partner in a startup incubator & investment firm in Zurich, who admitted this is one of the reasons they keep seeding startups in Switzerland despite high labor costs there.

BTW — this is one of the most overlooked problems of CEE countries like Poland, where bureaucracy is in general hostile towards entrepreneurs, laws are unstable&complex and informal connections mean more than the rule of law.

Financing

One complaint I have heard from many startup founders in Switzerland – new and seasoned alike – is that they have a hard time getting investments they need. Some of them even went to the US in search of money eventually moving their businesses there.

However, the problem is not that there is no money available – on the contrary, many of the most powerful companies and richest families are present in Switzerland. The problem seems rather that their investment money is channeled towards more traditional investments, not startups. This is changing — for example many Swiss biotech startups received considerable investment. Other field where investment money is starting to pour in is alternative energy. Albeit this change is slow it is in my opinion still a much better problem to have than not having the capital at all — again, a problem of many other countries.

Of course the list doesn’t end here. Other advantages of Switzerland include first-class universities that provide fundamental research needed as a base for high-tech startups (quite a few of the startups I have looked at were directly or indirectly benefiting from this). Not being a member of the EU – which makes it immune to excesses of EU regulators – also helps. Still, I think it is the first three elements that are the most important.

I think the financing is crucial. As the investment capital available in the country is becoming more and more aware of startups as an opportunity the more financing will become available. There are signs that this is happening already — new investment funds being set up, old ones getting more capital. It should uncork the stream of interesting startups from the Alpine country.

This article was originally published on Medium.

Yesterday I started my professional blog – the Pragmatic Leader and I invite you to visit it.

Since I have posted here about things that are unrelated to my work and I want to do so in the future I decided to keep this site as my personal blog and continue to write about things related to management & leadership on a separate blog. I already copied the relevant content to the new site to maintain continuity plus there is a new post on organizational culture out there waiting to be read.

Tempted by a recent promotional offer I upgraded to Windows 8 three days ago. So far my experience is mixed, but I’m not going to bore you with that. Instead I want to point out two things that Microsoft is doing with Windows 8 that are in my opinion noteworthy.

First, this is the first true innovation in computer UI in years. Last thing this innovative was iPhone’s UI. While Android is – in terms of its UI – merely a clone of iOS Windows 8′s tiles are something new and very different. It remains to be seen whether this UI will be accepted, especially by the desktop/laptop users. By necessity innovative UI has some learning curve that is much steeper between Windows 7 and 8 than it was between XP and Vista/7. But even if people will reject it and MS will have to revert to the “Start” menu (invented for Windows 95 almost twenty years ago) they should still be praised for at least trying something totally new. Brave, risky – and, I’d say, a bit unexpected coming from an aging corporation.

Also, the concept of unifying the UI across devices to deliver a coherent experience on all of them is interesting. It is not exactly new – last time Microsoft tried it the other way round: Windows CE had desktop’s UI that required a stylus to navigate. In Windows 8 the desktop did get the Start screen that was clearly designed for touchscreen devices. While it usefulness on a laptop/desktop is dubious I have to say it is surprisingly easy to work with using keyboard and mouse.

But this concept serves another purpose. I think I see the MS’s strategy behind it. They want to regain lost position in the mobile world by leveraging their dominance on the desktop. They hope people will like Windows 8 on laptops and tablets enough to buy Windows phones to go along with it. This is both clever, daring and something they successfully did before – when they overslept the Internet phenomenon they fought they way back by winning the browser wars from their Windows stronghold. Now they want to do it again and the time is high, because if things continue as they are few years from now keyboard-equipped computers may be used only by professional software developers and the like. So current desktop dominance will become less relevant and it makes perfect sense to us it now while it still matters.

All of that of course explains why they sell Windows 8 for around $50 – much cheaper than before. They will do everything in their power to make sure everyone will be familiar with the tiles interface. One company that certainly hopes this will work is Nokia – but this is a completely different story.

I have recently met with a team whose manager was trying to be their Product Owner, their Scrum Master (the SM originally assigned to their group kind of slipped out unnoticed a couple of months earlier), their technical leader – and at the same time think of their department future, lobby for the product they were making (an internal system and associated framework) and overall provide political cover. One of our trainers was leading a retrospective and as I was listening in the team told that manager a couple of times: let us decide, let us do things, let us fail even. What was amazing was how those statements bounced off him – it was like if they were speaking Mandarin, the guy just didn’t notice.

This is a pattern that I see often: a manager that is trying to be everything for “his” team, play all the roles at least a little bit – and in the end fails to do any of them well. I think drivers of this behavior can be different in each case (for example this guy is not a power freak, but rather is intellectually drawn to everything: to him all is interesting and worth exploring, knowing, so he tries to get at least a bite of everything), but the net result is always the same – employees’ creativity is stifled, after a couple of tries their own initiative is gone and healthy self organization has no chance of occurring.

This is, of course, nothing new: delegation was always a challenge faced by leaders. However, the “traditional” delegation was the delegation of tasks – what we call for now is delegation of power, delegation of problems to solve. Even more challenging – so even more managers fail to do it right.

Key takeaway: if you are a leader don’t try to be everything, focus on what value you can provide (most likely strategic decisions or providing a compelling vision or coaching) and don’t get in the way of the team.

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