Looking for More Distractions?

Google Plus

I am fairly agnostic when it comes to social media. I have tried a good number of them and found most of them wanting in one way or another. Typically, small things that imposes a time tax which, after some good-intention'd efforts, my usage starts to drift.

Hoopla over its growth and its demise (how time flies in the social media scale), aside. I like Google Plus for its open environment instead of being a walled garden. I also like the Twitter like capabilities.

Prometheus Reconsidered on G+

Prometheus Reconsidered now has an open curated stream on G+. It is updated almost daily but features articles that are related to technology, innovation, and business.

Please join the fun: Prometheus Reconsidered on Google Plus.

Clusters in global innovation

Good news

The good news, if you are local, is that Silicon Valley cannot be replicated. Not for lack of trying, mind you; lots of countries and regions have poured resources into this idea. Professor Josh Lerner of HBS has an interesting book on this topic - Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed--and What to Do About It.

In the US alone, there are the Silicon Corridor around Route 128 about Boston, Massachusetts, the Silicon Alley of New York City, New York, Silicon Forest of Seattle, Washington, and Silicon Hills of Austin, Texas. All the same, Silicon Valley has the singular noteriety in the public imagination and, more objectively, it consistently pulled in the highest amount of VC funding for new ventures around the world.

Bad news

Lest people get too smug in the San Francisco Bay area, it is also worth noting that anything that has not had an overwhelming geek component, Silicon Valley does not seem to have an inherent advantage.

For example, the recent wave of social buying firms that has gotten the tech world buzzing are not based in Silicon Valley - GroupOn is based in Chicago, Illinois and Gilt's headquarters is in New York City, New York. Even Google's much venerated advertising supported business model came from Overture in the decided "low-tech" Los Angeles, CA according to Mark Suster http://www.bothsidesofthetable.com/twitter-101/.

Looking across the Pacific ocean, Silicon Valley has nothing on mobile handset hardware technology compared to Asia. As anyone who has studied it can tell you, Apple's iPhone is indeed an iconic product, but it is not because Apple is a mobile hardware powerhouse.

The real news

Point by point and in isolation, one could make a plausible case that Silicon Valley is not the best place in the world for a given innovation. On the other hand, with the combination of ethnic diversity, employment, overlapping clusters, and other ecosystems, Silicon Valley still offers the most complete package for disruptive innovation.

As long as you remember that technical geeks suck at shopping.

Cluster map of Silicon Valley

Anchors

Here is a cursory view of Silicon Valley clusters and their respective anchors circa end of 2010. This follows Prof. Tony E. Smith of the University of Philadelphia's research in identifying that 1/4 mile and 40 miles having specific impact on technology clusters.

Roughly, it goes from hardware in San Jose to social media applications in San Francisco.

The format goes by City: Company name (industry/technology)

North Bay

• San Francisco: Zynga (Social media/gaming, software)
• South San Francisco: Genentech/Roche (Biotech/pharmaceutical)

Pennisula

• Redwood City: Oracle (enterprise software)
• Menlo Park: San Hill Road (VC)
• Pal Alto: Stanford University (R&D)
• Mountain View: Google (Software/search)

South Bay

• Cupertino: Apple (Consumer hardware/software)
• San Jose: Intel/Cisco (Consumer/enterprise hardware)

East Bay

• Fremont: Tesla (Auto/Cleantech)
• Berkeley: University of California Berkeley (R&D)

Disclaimer

The list above is meant to be an illustration of clusters. There are many exceptions with the most glaring one being that Facebook is located in Palo Alto.

The germane point, nonetheless, is that if you want to start up a solar panel company which utilizes semiconductor manufacturing technologies, the natural location is to be near South Bay near where the semiconductor cluster is.

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.