Inside Valley – How accelerators turn start-ups into companies
Plug and Play is one of the world's most important start-up forges. What makes it special is its close collaboration with German carmakers.
In this episode of Inside Valley I visited Plug and Play in Sunnyvale, one of the most influential start-up accelerators in the world. Since the mid-2000s it has supported young companies in their early stages – including names like PayPal, Dropbox and Lending Club.
What is at stake
Accelerators are the backbone of Silicon Valley that most people in Germany never see. The logic is straightforward: a young start-up receives a few months of office space, mentoring, contacts and often a small initial investment – in exchange for a stake in the company. At the end there is typically a “Demo Day” where founders pitch to a room full of investors. Plug and Play runs this model at industrial scale: around 550 start-ups per year, across several thematic tracks.
What makes Plug and Play special
Founder Saeed Amidi combines the classic Silicon Valley accelerator model with an unusual extra: close collaboration with large corporations. Instead of just venture capital investors, the Demo Days also draw innovation managers from BMW, Mercedes-Benz, Bosch, BASF, Deutsche Telekom and numerous other German companies. For start-ups that means a potential pilot customer in the room. For the corporations it means structured access to dozens of new ideas every quarter. This matching is the real product – not the desk rental.
Why German corporations are so present
Few national industry associations invest as consistently in Plug and Play’s tracks as the German one. Automakers, machinery companies and chemical groups pay membership fees, send staff to Sunnyvale for months at a time, and cooperate on proof-of-concept projects. The reason: there is no comparable ecosystem in Germany. University spin-offs exist, but the structured bridge between large tech corporations and young start-ups works less smoothly here than in California. Companies that don’t come to Silicon Valley miss a piece of the future that can’t easily be captured anywhere else.
Why the model can’t simply be copied
European cities keep trying to build “mini-Silicon Valleys” – with mixed results. What’s missing is not the offices but the density: hundreds of investors within a few square kilometres, a legal culture that allows fast failure and fast company formation, a university landscape that translates research into products early. Plug and Play shows how important accelerators are to that density – and how hard their role is to replicate from the outside. That is why German industrial companies make the pilgrimage to Sunnyvale, and will continue to do so for the foreseeable future.