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Known for co-founding Netscape and the venture capital firm Andreessen Horowitz, Marc Andreessen recently made his thoughts clear on what seems to be a harsh skeptical outlook on international startup ecosystems. Reported by TechCrunch, he highlights the notion that acceleration programmes and the like should stick to geographic regions they know best. Beijing’s attempts to replicate Silicon Valley, he says, won’t work because each region has its own particularities.
Pointing at the political environment, he says that although China is heading on par with the US economically, it’s still lacking the required transparency and fundamental laws for protecting workers. This, he notes, and “issues with IP integrity” makes him skeptical in seeing efforts succeed trying to replicate Silicon Valley. Although we might have seen promising Chinese startups being spawned like Alibaba, Tencent and Baidu, the system cannot sustain itself in the long-term.
Andreessen did give Beijing some credit though:
“China should be another United States from an economic standpoint. Beijing should be another Silicon Valley. I think the early indicators have been promising. There are some amazing stories like Alibaba and Tencent.”
He suggests that, although Beijing is considered the most competitive rival to the US there exists “issues with the rule of law and basic contract law.” He then adds: “They [the government] have the idea that there can be a free economy without free speech, which I think is not true.”
Domestic startups have managed to gain momentum without much competition. Sometimes referred to as China’s search engine, Baidu, has managed to grow without the threat of Google. This is mainly due to protections that makes it difficult for online services like Twitter, Facebook and Google to enter the Chinese market.
These restrictions and censorship policies including the massive “firewall” have led to an environment where local startups succeed on international competitor’s losses. In the long run, though, this system is not sustainable.
He further said: “I would like for there to be 50 or 100 Silicon Valleys all over the world. But I think it’s harder to create another Silicon Valley. Attempts to do that have not gone well over a multi-decade ability. I think it is a pretty difficult formula to re-create.”
Furthermore, Andreessen argues that he’s skeptical the venture firms can scale geographically and operate successfully in multiple regions of the world.