Silicon Valley - why does it work? why can't others replicate it?

Silicon Valley is the epicenter of the universe for technology startups. There is a "force field" of energy there that I haven't found anywhere else. They have some of the best technology universities in the world. Sand Hill Road is home to the largest venture capital firms. And, they have a pool of startup talent that is unrivaled anywhere. It is a powerful combination.

Boston fits the description well too. Great universities like MIT, Harvard, BC, BU, Northeastern. Top notch VCs like Polaris, Matrix, North Bridge, Highland, General Catalyst, and others. And startup talent from DEC, AltaVista, Lycos, Lotus, PTC, Akamai, Groove, and others.

I have been part of successful startups in Silicon Valley and Boston. There are incredibly bright people, plenty of money, and all the supporting infrastructure in both places. The difference is scale and pace.

Silicon Valley has the highest concentration of "Type A" personalities I have ever seen in my life. They compete at everything...all the time. This competitive atmosphere pushes you beyond what you thought was possible. It inspires innovative thinking that you didn't think you were capable of. I call it a "force field" of competitive energy. It is amazing, invigorating, stimulating, and rewarding.

There are other cities that have some level of the necessary ingredients. Places like Austin, Seattle, Chicago, and New York. The difference is scale. Success attracts more success. If you think of insurance you think of Hartford. If you think of financial companies you think of New York. If you think of advertising, it is Madison Avenue. If you think of automobiles...it is Detroit. If you think of films...it is Hollywood.

All of these cities became the epicenter of their industries by historical serendipity. While other cities have some measure of all the elements necessary to support a particular industry, (universities, money, people, infrastructure) it is rare that any city can replicate the success of the dominant center. Success attracts success. The best and brightest people want to make it to the top where the competition is at the highest level.

Of course this is a very USA centric view of the business world. The rest of the world has market segments that they dominate as well. In fact, for automobiles Japan and Germany are world leaders. There are lots of other international examples.

My point is that whatever the industry, once a dominant center has been established, it is rare that any other city can challenge it. Politicians blather on about all the things they do to stimulate business growth. I don't think they make any difference. Instead, each city needs to look at their own unique strengths and successful businesses, then focus their resources on making them the dominant players.

Replicating someone else's success is nearly impossible. Good advice for startups as well. Play to your strengths. Make your own success.

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Comments

[Steve]

There's a pretty good Paul Graham essay that talks about this..."How to Be Silicon Valley." He goes over all of the different factors that have contributed to the success of Silicon Valley. Also pointing out why Carnegie Mellon produces some of the smartest Computer Science people in the country but it does virtually nothing for the city of Pittsburgh.

http://www.paulgraham.com/siliconvalley.html

[CPCcurmudgeon]

In addition to Paul Graham's comments about the climate, access to money, etc., a community of openness and sharing of technological resources is key, IMO. I remember reading a article many years ago on the same subject (Silicon Valley culture). The article argued that one reason Sun was able to outdo DEC was because Sun was willing to share and collaborate within the Silicon Valley tech circles in ways DEC was not (within the route 128 belt or elsewhere). For example, Sun embraced TCP/IP technology right away, whereas it was many years before DEC did, especially internally.