Guest post by Simon Jessen

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Are entrepreneurs from Stuttgart, Germany, culturally wise different from their counterpart in Portland, Oregon or are they much the same? I asked that question in my MA-Thesis (‚Silicon Forest vs. Neckar Valley – A cultural comparison of entrepreneurs in Stuttgart and Portland‘), conducting a cross-cultural comparative study with the goal to contribute to the discussion whether entrepreneurs with different cultural background are alike or rather different. In the past there has been an ongoing debate between two different groups of academics circling around the question of whether entrepreneurship is largely universal and generic or if it is to a large extent influenced and shaped by cultural divergence. The first group states that entrepreneurs from one country are more similar to their entrepreneurial colleagues than to their immediate neighbors from their own country and that entrepreneurs hold a similar set of beliefs regardless of place and culture. The opposing academic group argues that national differences in terms of culture have a great impact on the level and type of entrepreneurship. The studies conducted to answer that questions mostly chose a quantitative research design, directly asking the entrepreneurs via questionnaires.

I chose an indirect qualitative approach, interviewing four members of the supporting startup communities from both regions. This had three advantages: The first one was that the perspective of an expert extended the range of information. The second advantage was that the participants could provide an insight that reflected a more general picture instead of a few personal views. The third advantage of this approach was that it reduced the tendency of giving socially desirable answers, as they were not talking about themselves, but rather providing a third person perspective. So I reached out to venture capitalist, business accelerators and incubators in order to interview them and to get an idea how they perceive the entrepreneurs they are working with.

While analyzing and coding the interviews, I created six categories to structure the findings and make them easier to compare: Planning approach, view on risk, view on future, social context of entrepreneurs, motivation to start a company and judging success and failure. In which categories are the entrepreneurs from Stuttgart and Portland alike, where are differences noticeable?

The planning approach in both regions seems to be very much alike: The experts from Stuttgart and Portland reported that the entrepreneurs, they are working with, take a rather short-term, low detailed and flexible approach. Long-term goals are more seen as motivators and work as a vision that can help as a navigator.

The “View on risk”, which I divided into the sub-categories “View on competition” and the “Willingness to take risk”, paints a different picture as small variances between the regions were found. Although the interview partners generally described the entrepreneurs equipped with a high level of self-confidence and with a tendency to view competition as a motivation, the Stuttgart interviewees also mentioned a feeling of insecurity and intimidation. When it comes to willingness to take risk, the clear distinction were not be made between the two regions but more so between industries: In the software industry the willingness to take risk is enormous, whereas in the high-tech industry entrepreneurs are a lot more careful.

The analysis of the answers concerning the “View on future” revealed similar tendencies in both regions. The entrepreneurs were described as generally very optimistic, positive and self-confident, even to the point where it might do damage to the success of the startup. A difference was noticeable in the reaction towards change: The entrepreneurs from Portland seem to enjoy the constant need to change and adapt, whereas the entrepreneur from Stuttgart has a reluctant approach to it and views change as something inevitable.

The next category is the social context of the entrepreneurs. One difference noticeable was the kind of network the entrepreneurs from both regions appear to engage in. The answers from Stuttgart were unfortunately inconsistent, whereas the Portland respondents reported preponderantly large and closely-knit networks. What they did have in common was the willingness to work with each other. A high level of enthusiasm for general collaboration was stressed several times across the interviews.

I asked the participants why they think entrepreneurs from their region start their own company and the answers revealed similar motivations. They reported that the desire to achieve something on their own and to act independently was important to the entrepreneurs from both regions.

The last category looked at the explanations entrepreneurs from both regions might find for their success or failure according to the interviewed experts. In explaining reasons for failure, differences were found. The Stuttgart experts reported explanations, such as the incapacity to find the right customers or insolvable conflicts within the team. The Portland interviewees on the other hand reported that entrepreneurs would list the lack of capital or other external factors as reasons for their failure. They describe the typical entrepreneur from Portland in general as not particularly self-critical, whereas the entrepreneurs from Stuttgart have the tendency to be too hard on themselves.

Fortunately there are also the success stories and so I also wanted to know what the entrepreneurs might answer to the question why they were successful. Here, the experts from both regions agreed that most entrepreneurs would list external reasons such as the group effort and the supportive network as likely answers for their success story.

Overall, the interviewees from Stuttgart and Portland similarly described the entrepreneurs from their respective regions. For the most part they portray the entrepreneurs as being self-confident, optimistic and eager to support and work with other entrepreneurs. One explanation for that result could be that the two countries studied have a rather high level of cultural commonness and the degree of similarity found, could be explained by the high amount of shared values. A second explanation could lie in the comparable challenges regardless of the surrounding or the cultural influence. In order to start a company, entrepreneurs require foresight and energy, passion and perseverance, initiative and drive no matter the environment.

What are the practical implications of the results of cultural comparison studies like mine? Policy makers, universities and business leaders play an important role when it comes to promoting entrepreneurial activity. Their support is usually offered in forms of incentive programs, scholarships and campaigns. Policy makers are very much interested in the different strategies to foster entrepreneurship, as it is seen as an important factor that increases the number of innovations and economic growth in an economy. The problem is that strategies are often blindly copied from countries with a high level of entrepreneurial activity whereas a development of “context-appropriate policies” would be more suitable. The assumption that an incentive that works well for one group of entrepreneurs and that the same incentive will motivate a different group of entrepreneurs is therefore questionable.

The results of my thesis show that in many aspects such as the planning approach, the view on competition or the degree of self- confidence, the entrepreneurs from the two regions, Stuttgart and Portland, are similar. Besides these similarities, there are differences such as for example the assessment for the reasons for failure. In conclusion, my thesis argues that between the two cases a high level of homogeneity can be found and that clear differences are visible only in a few aspects. In future research, a sharper contrast in cultures could help to clarify whether entrepreneurial attributes are universal or differ systematically across cultures.

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About the author

Simon Jessen recently graduated from his studies of General Management at the University of Tübingen, writing his thesis about ‚Silicon Forest vs. Neckar Valley – A cultural comparison of entrepreneurs in Stuttgart and Portland‘. Simon is now diving into the startup world by pursuing several projects.

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Image source: Daniel Hoherd with Creative Commons License CC BY-NC 2.0