Multiwave Photonics is a 5-year-old, fiber laser business in Portugal where historic, political, social, and physical surroundings shouldin principleprovide a good basis for any startup company.
We founded Multiwave in the historic city of Porto in northern Portugal. The city lies on the Atlantic Ocean and the Douro River in the southwest part of Europe and is stunningly beautiful. The weather and the wines are even better than in northern California, and the food is superb. People are normally friendly and open-minded, too, as this has been for centuries a society of traders.
An educated labor force and other necessary infrastructure and competencies are available in Porto and many other areas in Portugal, thanks to years of continuing public investment in universities and R&D institutions sponsoring PhD fellowships. Collaborative teaching and R&D programs among Portugal, the United States, the United Kingdom, and elsewhere have also contributed to Portugal's scientific institutions and competencies.
For example, fiber optics developed locally over the past 25 years. This was a process where we played a role that later helped to anchor Multiwave in Portugal. (For a more detailed story about why Multiwave is based in Portugal rather than Silicon Valley, please see "Why Portugal?") Similar positive evolutions of institutions and competencies have occurred in other science and technology areas as well, particularly in the software and biomedical sectors.
Nonetheless, building a high-tech startup in Portugal is not an easy challenge because many aspects of the cultural and innovation-related environment are still unfavorable. As in other European regions, entrepreneurship is just entering the political and social vocabulary.
In addition, failing is not yet considered a normal part of the learning process and carries a significant social stigma, thus conditioning risk-taking attitudes. In parallel, financial reward for winning after taking risks does not yet merit generalized social approval.
To make things more difficult, government policies, regulations, and infrastructure do not significantly promote competence development and innovation and don't favor small- and medium-sized companies, focusing available resources in very large public works. Because of this situation, the entrepreneur-to-be loses. And that is part of the challenge that a new generation of better educated and more courageous people must face and determine to resolve.
For Portugal, the time is now to "Ask not what your country can do for youask what you can do for your country," as U.S. President John F. Kennedy stated in his 1961 inaugural address.
Role Models Help
I had the privilege of learning at Stanford in the 1970s with some of the best. People such as Tony Siegman, Bob Byer, and Joe Goodman forever left a strong imprint in my mind. Afterwards, on a small scale, I made a contribution over the years to build laser and fiber-optics teaching and research activities in Portugal at the University of Porto, the largest and arguably the best public university in the country, and that provided the opportunity to create Multiwave in late 2003.
To do it, however, I quit my tenured, full professorship position at the time. That action seemed a bit extreme to a few of my friends but was necessary for me because of the size and complexity of the challenge ahead of us.
Mirroring Silicon Valley
The conditions easily found in Silicon Valley are only now becoming available to a small extent in Portugal. In fact, Silicon Valley is a rather unique melting pot of scientific excellence, competencies, creativity, entrepreneurship, venture capital (VC), risk-taking culture, and international networking that is difficult to reproduce elsewhere. In order to reproduce these conditions elsewhere, key cultural factors must be in place. Often they are not.
For example, in Portugal (and in quite a few other regions in Europe) people still have a tendency to self-organize within poorly-communicating subsystems. Students have limited interaction with teachers, scientists do not normally interact with investors, and universities seldom interact with companies.
In addition, individual responsibility and accountability are still perceived as rather inconvenient concepts, and bureaucracies, from national governments to the European Commission, often serve self-centered interests that make everyone's life a bit harder than necessary.
Such behaviors raise difficulties for entrepreneurs, especially internationally minded entrepreneurs who may need a more open dialogue with scientists and institutions or more capital to finance their ventures. These entrepreneurs also may face more complex risks to successfully compete in international markets.
Portugal Is Changing
Fortunately, Portugal is changing rapidly and many gridlocks are being torn down by more qualified initiative-prone people in all sectors. For example, a few schools are initiating entrepreneurship programs, science and technology parks are forming and bringing innovative people together, and capital is beginning to be available to sponsor startup companies and technology projects.
Internationally minded VC entities such as Espirito Santo Ventures (a part of the Espirito Santo Financial Group and an investor in Multiwave) as well as other private and public-sponsored VC firms are making strong contributions to change the entrepreneurial landscape.
In Spain, the situation seems similar and VC entities such as Bullnet Capital (the first VC investor in Multiwave) are focusing on promising early-stage high-tech ventures.
But much remains to be done on the entrepreneurial side, such as eliminating some of the rock-solid job security associated with university professorships, reinforcing the value of intellectual property, and removing direct government intervention from the lives of institutions and people. Those responsibilities should instead be transferred to the organizations that are closer to the people and to the people themselves, empowering them with an appropriate combination of responsibility and authority. In the schools, educational institutions must start teaching kids with more stimulating and demanding curriculum and using positive feedback to develop a "think different" mentality instead of the prevailing "think alike" mentality.
Portugal also must attract tens of thousands of well-educated immigrants who can accelerate social and economic change, instead of less qualified people to be employed in government-sponsored construction works. Fortunately for us, many of the immigrants joining the public construction works are highly educated, and they rapidly transition to higher value-added initiatives.
On the government sideof any countrythe best we can hope for is a clear vision for the country and competence to plan and implement the necessary supervisory procedures. This is sometimes too much to ask, especially at times when so many governments seem so influenced by corporations and lobbying groups.
Optimism at Multiwave
I am a realistic optimist in the sense that I believe that the future we believe in is ours to build, no matter what conventional wisdom may say or conditions associated with the surrounding environment may suggest. When I see a wall in front of me, my most immediate reaction is to look for small openings and fissures.
However, for attitudes of this type to be minimally effective in developing credible businesses, we need very hard work, a solid dose of wisdom, excellent advice, international networking, and access to capital.
Multiwave is still far from proving that we can make it, but we are trying our best. We look for partners and employees with unique talent, experience, and wisdom. We need all the best help that we can get and we always give the best that we haveincluding beautiful surroundings, superb sunshine, great food, unique wines, and a fun company with strong core values.
Risk Aversion Unsustainable, Report Says
Jose Salcedo's concerns about a risk-averse culture are echoed in a report commissioned by the European Commission entitled "Creating an Innovative Europe." An independent expert group on R&D and Innovation, chaired by former Finnish Prime Minister Esko Aho, made several recommendations in the report to move Europe toward recapturing its entrepreneurial and innovation vigor.
The report says that Europe's aversion to risk won't sustain an innovative economy.
"Europe must break out of structures and expectations established in the post-WW2 era which leave it today living a moderately comfortable life on slowly declining capital," the 2006 report states. "This society, averse to risk and reluctant to change, is in itself alarming but it is also unsustainable in the face of rising competition from other parts of the world."
Read the report in PDF format.
Multiwave Found Own Path
Creating, financing, and developing an internationally minded high-tech startup company in a traditional society usually requires dealing with and navigating through complex cultural and social issues.
In our case, we decided to bypass them as much as possible and follow typical Silicon Valley-type procedures, including building an international team, filing U.S. and international patents, developing state-of-the-art and internationally competitive products based in fiber optic technologies, following well-established and demanding international due diligence and advisory processes, and making the company a normal participant of international networks related to lasers and fiber optics.
- Excerpt from Engineering a High-Tech Business: Entrepreneurial Experiences and Insights.
Multiwave opened an office in Munich, Germany, in August 2008 to better serve its customers in Europe. The office is led by Steven D. Wagner, director of sales and marketing
Multiwave began doubling its facilities in Portugal in September and continues to expand its team.
Jose R. Salcedo
Jose R. Salcedo is founder and CEO of Multiwave Photonics, SA, in Portugal. He has worked in academia, industry, non-profits, and government and is a former executive director of the National Science and Technology Fund in Portugal. He received a master's and a doctorate in electrical engineering at Stanford University (USA) and is a member of the Academia Europaea. He authored a chapter about building Multiwave Photonics in "Engineering a High-Tech Business: Entrepreneurial Experiences and Insights," published this year by SPIE Press. Reach him at email@example.com