Something in the Silicon Valley Air: Why Multinational Firms Send Their Entrepreneurs Here

"The first impression here, I’m thinking, 'OMG, I’m really in Silicon Valley.” That is what you see on the TVs!'" gushed Jasmine Meng, 28, a materials engineer from Shanghai who is spending the first half of 2019 trying to launch a startup in Sunnyvale.

Fortunately for Meng, she has got the full backing of a giant German multinational, but more on that later. Let's talk first about Meng's winning startup idea.

In China’s big cities, horrendous air pollution is a regular thing, not just the occasional outgrowth of wildfires like those seen last fall in California. Air pollution is a top reason why you see so many Chinese people wearing face masks.

If you haven't visited China recently, you can watch any number of news reports depicting the country's struggle with air pollution:

"I am the potential customer of our products," Meng said.

And that problem led Meng to come up with this pitch: a better face mask, one that is better fitting, better functioning, and frankly, less ugly. "It can protect your health and in the meantime, not compromise your style," she said.

She delivered this pitch to her employer, Mann+Hummel, which makes most of its billions annually from industrial air filter manufacturing; conventional car filters, to be specific.

Headquartered near Stuttgart, Germany, Mann+Hummel has been looking for alternative directions to pivot into, given that the conventional car market is changing dramatically, disrupted in large part by Silicon Valley.

Germany has long been famous for its high quality engineering and manufacturing. But the future of both is all about software: automation and artificial intelligence. You want to be a player in that future? You’re going to have people working here, in the San Francisco Bay Area.

And, if Mann+Hummel is to survive, it needs new blockbuster products, too. So a few years ago, the company launched a startup contest called InCube. The winning idea gets you six months at a startup incubator, Plug and Play Tech Center, in Sunnyvale.

That's how Meng has come to be Chief Product Officer of Purar, “fighting smog with fashion” for a little more than three months now.

Meng and her team members from Germany, England and Mexico are halfway through their time at Plug and Play Tech Center, a startup accelerator that partners with large companies like Mann+Hummel to — among other things — launch startups on a test run basis.

Purar has six months to develop Meng’s concept, identify and ink partnerships, and ultimately, make the case to headquarters that its fashionable face masks should become a Mann+Hummel department, subsidiary or spinoff.

There have been three InCube cohorts so far, all connected to filtration: indoor, water and now wearables. The first team, focused on building filtration, landed a partnership with Shimizu Industry of Japan and has since become a spinoff company.

"Fail fast, is what they say," said Candace Widdoes, Plug and Play’s Chief Operating Officer. Is six months enough time to get anything started? "Oh absolutely. We do three-month cohorts. Either you do something in three months or not! Six months is plenty of time."

"The fact that we operate outside rigid and fixed corporate structures, brings many advantages to it," said Purar’s Chief Marketing Officer, Isabell Kloess.

How is Silicon Valley's business culture different from that in Germany? For one thing, development projects often take three years, not three months.

Here in Silicon Valley, "everything's happening fast. So we have to be fast. Everybody is so curious. Everybody is really smart. There's more emphasis on the sort of cooperative model where it's like maybe there's a way we can both thrive by working together on the same project," said Kloess.

In contrast, back in Germany, "a lot of things are standardized and planned out. One of my projects within the company prior [to Purar] was actually to standardize all of (the) processes worldwide," she added.

Kloess doesn’t begrudge the steady, slow methodology of her employer back home. It’s typical, and often necessary, for a so-called “legacy company to operate."

But that mindset often proves resistant to new ideas, killing them off — and driving out the people who generate them. Sending those people to Silicon Valley gives them a genuine chance to try something that ultimately rebounds to the benefit of the mother ship back home.

"It makes the corporate employee more entrepreneurial," Widdoes said. "Even if they go back to Mann+Hummel, they bring this incredible experience back with them. No matter what, it's a win-win."

For all the talk about Purar being independent, the team’s pitch includes the backing and experience Mann+Hummel brings to the table.

So what happens if Purar fails?

"Then the next team starts," Kloess said.