Self-organized clusters

Not a monolithic blob of geeks

One of details about Silicon Valley is how it is self-organized into clusters of technology, not unlike the traditional service clusters in New York or London. Silicon Valley is best think of as a series of circles each anchored by a leader and these overlapping allows easy cross-pollination to create new companies.

Advantage of proximity and diverse clusters

Proximity to critical mass(es) of diverse skill set is a vital part of new idea formation. Having a deep portfolio of ecosystems within a two hour driving radius, it allows for a solid support infrastructure. If you need to file a provisional patent? If you need to set up your VoIP system? If you need to find co-founders? There are plenty of good patent agents, IT administrators, and start-up soul-mates to be found.

With the overlapping technology and industry ecosystems, as people interact with each regularly, general technology diffusion and the likelihood of finding and applying aspects of known technologies/approaches to a new arena are also much higher.

Until fairly recently, many Silicon Valley VC's have opined that part of their success is due to the fact that they never have to drive for more than two hours to source, monitor, and exit their portfolio investments.

A two edged sword

On the other hand, overlapping clusters has its problems given Silicon Valley's at-will employment.

For starter, if your idea or your execution is sub-par, it is easy for people to leave and find a comparable position. Even if your idea is good and your execution above average, sometimes people leave to join a hotter opportunity. For example Google announced in November of 2010 an across the board 10% salary increase because people, so it seemed, was decamping for Facebook. Finally, for the same infrastructural advantage of clusters, people also leave to start their own companies.