The Darwinian Evolution of Startup Hubs
This weekend finds NYC in between Internet Week (which I largely missed because of my London trip) and Disrupt NYC (which I will be at on and off this coming week). So the development of NYC as a startup hub is very much on my mind. And so I thought I'd post about the development of startup hubs.
This theory, which I like the call The Darwinian Evolution of Startup Hubs, is not new and I certainly didn't come up with it. But I think it is important for everyone to understand and so I'm going to blog about it.
If you study Silicon Valley, what you see is something that looks like a forest where trees grow tall, produce seeds that drop and start new trees, and eventually the older trees mature and stop growing or worse, die of disease and rot, but the new trees grow up even taller and stronger.
In my mental model of Silicon Valley, the first "tree" was Fairchild Semiconductor (founded in 1957) which begat Intel (founded 1968) which begat Apple (1976) and Oracle (1977), which begat Sun (1982), Silicon Graphics (1981), and Cisco (1984) which begat Siebel (1993) and Netscape (1994), which begat Yahoo! (1995) and eBay (1995), which begat Google (1998) and PayPal (1998), which begat YouTube (2005), Facebook (2004), and LinkedIn (2003) which begat Twitter (2006) and Zynga (2007), which begat Square (2010), Dropbox (2008), and many more.
If I left out important foundational companies of this mental model, please forgive me. That was not meant to be a comprehensive history. It was meant to illustrate how this evolutionary scenario plays out over time.
If you drill down a bit deeper, you see that the founders, investors and early employees generate a tremendous amount of wealth from these big successes. The later employees don't make as much wealth but they do learn a ton and make enough money that they don't need to work for someone else and so they strike out on their own and are often funded by the folks who made the big money in the prior startup. That's how the seed drops from the tree and starts a new tree growing. This continues on and on and on.
If you look at that history of silicon valley, you see that in the forty year history (since Intel's formation), there have been close to ten cycles of maturation and new company formation, and those cycles are getting shorter and the number of important foundational companies that are formed each cycle are increasing.
That makes total sense since this darwinian evolutionary model is non linear. One company begets two and those two companies beget four, and so on and so forth. Of course there are exogenous factors that also play out, like technology changes, financial market cycles, and the availability and cost of talent, and they impact how fast the startup hub economy expands.
This darwinian evolutionary model of startup hub development is not limited to silicon valley. We have seen it play out in other places, most notably Boston, and increasingly in NYC. It is also playing out in markets like Boulder Colorado and Austin Texas and many other parts of the US and many parts of the world.
When I look at a startup hub, I like to figure out what the "Fairchild Semiconductor" of that market was and when it got started. That tells me how far along the development cycle that startup hub is. In NYC, that was Doubleclick which was founded in 1996, the same year as my first venture capital firm, Flatiron Partners, which was founded on two premises, that the Internet would be big and that NYC would be an important locus of Internet innovation. We did not invest in Doubleclick (sadly) but we did invest in a lot of interesting Internet companies in NYC in the late 90s.
So NYC's startub ecosystem is 16 years old now. And we are two cycles in. The companies that are getting started and funded right now in NYC are akin to the Apple/Oracle stage of silicon valley. If you want to push, you could suggest that we are three cycles in now and the companies that are getting funded right now are akin to the Sun/Silicon Graphics/Cisco era. That might be right.
But in any case, NYC's tech sector is not anywhere close in terms of fertility to silicon valley. It will be there in another 25 to 30 years. And silicon valley will be even further along.
Unless, of course, something else happens.
The technological revolution that preceded the digital revolution was autos and airplanes. They were invented in the late 19th and early 20th centuries and the first commercial startups emerged in the first decade of the 20th century. The auto/airplane revolution played out until the 1960s/1970s. That suggests that a technology revolution lasts around 75 years.
The transistor was invented in the late 1940s and by 1958 we had commercial startups working on the technology. So if this revolution is anything like the last, the next big thing will be invented any day now and within a decade or two we will be on to the next technology revolution.
And in that case, all bets are off. Silicon Valley could become the next Detroit and who knows what will be the next Silicon Valley.
But of course, all of this is conjecture. History doesn't repeat itself. But it does rhyme. That comes from Samuel Clemens (aka Mark Twain). One of my favorite people ever.
The economist keep saying the new revolution already started around 3d printing.
InterestingWhat is it, something like – Fire, Wheel, Printing press…..
we have a bet in 3D printing, shapeways, and it would be great if shapeways was the fairchild semiconductor of the next big thing. but i am not convinced the 3D printing is the next technology revolution. i think it is a subset of the digital revolution.
Quirky, Kickstarter and emerging markets like them will make or break 3D printing… Unless 3D printing gets really efficient and simple really fast.
3D printing is hell of efficient and simple already. See Solid Concepts, Quickparts, ProtoCAM, there are many large scale services that allow you to upload 3D files and get parts within a day or 2. 3D printing has already been made – just in the high level manufacturing scene, it just has to trickle down to consumers in more ways like MakerBots and Shapeways.
Mark my words – in a decade we will have 3D printers on desktops everywhere just like we had laserprinters everywhere in the 1990s. The killer app hasn’t yet emerged – but remember that Desktop Publishing didn’t emerge until AFTER the Laserprinter started showing up on desktops. I got my first HP Laserjet (first generation) in 1984. We are in 1982 or 1983 of 3D printers.
The difference between 3d printers and laser printers is that everyone need(ed) to print out some kind of paper at some point. From school children to engineer to insurance salesman. How many people need to make plastic parts on a daily basis?
I think everyone needs to print out plastic parts on a daily basis. Just look around you at the amazing amount of plastic in your life. Now, imagine if you could customize it.
Well, certainly it’s fun and mind blowing being able to print out custom plastic pieces yourself. I can see it being very big in the Warhammer 4000 scene for making little action figures, kids toys, as a novelty. When I was a kid we had some toys that let you mold your own toy cars or creepy crawlers – 3D printers would be that ^10.But literally everyone needs to print out a resume, or a school paper or what have you at some point – those things aren’t luxuries. So you can’t really compare the “desktop 3D printer” to the “desktop laser printer” – for the average desktop, paper documents are(were) a necessity while custom plastic parts would be a novelty.Anyone with no experience in computers can sit down at Word and type out a 100 page custom novel to print out with no prior experience with computers. How many people can generate a 3D model from the same level of experience?
Your assertion that anyone can sit down at Word and create whatever printed document they want with no experience was most definitely not true in 1984. I remember very clearly fighting with Final Word to get the formatting just right for a simple document my dad wanted – I was doing it because he had tried and struggled and failed.Software will evolve very rapidly now that the hardware is here.
The software and hardware have been evolving together. Commercial stereolithography came out in the mid-90s, at the same time as modern 3D CAD packages like Solidworks. Now we have free software like Sketchup that makes it simple and intuitive plus many competing 3D printing technologies.But there’s a more important gap that I talk about when I mean that anyone can sit down and type out a novel to print out. There are 26 letters in the alphabet, laid out on the keyboard, all you have to do is put your finger on a key to make it appear on the page – the picture of a “Z” on the keyboard is the same as the “Z” that appears on the screen when you press it. Linguistically we all learn about the alphabet from diapers.But 3D shapes are completely disconnected from their computer input mechanism. If I have an idea for some 3D shape in my head, there’s no single key or even series of keystrokes that I can press to make it happen. I have to start from scratch and artistically create it using the software. Thus, only those with a definitively artistic talent can truly make custom 3D shapes appear on the screen from an idea in their head. That’s a much bigger gap than the one between thinking up a sentence and typing it out.
Disagree that “only those with a definitively artistic talent can truly make custom 3D shapes appear on the screen from an idea in their head”. Rather than argue, let’s check back in five years when the software has evolved. Plus, there are rapidly becoming large databases of 3D objects (similar to fonts, styles, etc.) – see http://www.thingiverse.com/ and amazing new products like TinkerCad – see https://tinkercad.com/. Plus, imagine when your iPhone is a real time 3D scanner.
Not trying to argue, just aimlessly exercising my rhetoric :)When I say definitively artistic – I mean that putting any mental picture in any medium (including 3D models) is factually an artistic practice. It’s largely independent of the toolset.Seurat made paintings out of dots instead of paint strokes… Today’s artists make sculptures on the computer and it’s a lot easier to make a concrete shape that way than by hand.But will you ever see an insurance salesman making 3D shapes on the computer?More likely you will see thousands of artists, designers and engineers using it to do the things they would have done some other way before – if at all.The 3D object databases like Shapeways are where the artistic producers can meet up with the non-artistic insurance salesmen. And the insurance salesman doesn’t have to have a 3D printer on his desk – it would be much more cost effective to buy the models readymade from Shapeways.If you just want an iphone case, you can get it for a few bucks readymade from Shapeways, or you can buy a Makerbot for $1000 and experience an epic pain in the ass as you try to maintain it.I guess what I’m saying is, desktop 3D printers will help out the artistic people do their thing; but the public in general doesn’t need 3D printers, and services like Shapeways will bring the technology to them instead.
I think they will happily co-exist. I remember very well go to Kinko’s to get copies and laser printed stuff even after I had a copier and a laser printer on my desktop.
Truly, shapeways and thingiverse are the kinko’s of solid objects 😉
3D printing – or additive manufacturing as the broader term – is a next technology revolution in manufacturing. I’ll give you a real example.I had to make a pilot of 100 plastic parts. My options were:- spend $3000 for traditional injection molding and $1 per part, so $3100 total, taking about 2 weeksor- Use 3D printed tooling and vacuum molding to make the parts, at $10 per part, so $1000 total, taking about a weekThe price and time difference is obviously well in favor of the 3D printed tooling. We call it “rapid tooling” – and that’s where the real technological revolution in 3D printing lies. Instead of having to make a 100 pound steel tool, that would only be cost effective to make 100,000 parts, you can just print out the tools that you need to make the next 1000.
I like 3D printing but what exactly is revolutionary? You get a prototype in a day instead of a few weeks. That’s nice but not a revolution.
I prefer the term “additive manufacturing” as a general alternative to 3D printing. The real mind blowing part about this new type of manufacturing is that shapes can be completely arbitrary. Whereas making parts without additive manufacturing, you have to use certain tools (i.e. end-mills) to shape parts by cutting them out of a block – limiting the possibilities of your parts’ shape – with 3D printing you can make literally any shape from nothing.If you then expand that into making tooling for traditional manufacturing, then you have a real revolutionary idea in manufacturing. I can now make tools for production, in any arbitrary shape, from scratch within a few days.
Which is great but sounds like a better mousetrap whereas a revolution is something that makes mousetraps obsolete.
In manufacturing it has made mousetraps obsolete. One technology can basically replace all the other technologies – with greater precision, faster speed, and more possibilities. Actually in your phrase, a “better mousetrap” would make “mouse traps obsolete” – so from that, you say that any better mouse trap is revolutionary.
If you’re using a better mousetrap you’re still using a mousetrap. It can’t obsolete mousetraps, because it is one.A revolution is an invention that replaces mousetraps and is not itself a mousetrap.
A mouse trap catches mice. A cat does the same job. But a mouse trap doesn’t take food and a litter box. So if you want to catch a mouse now you get a mouse trap. Did mouse traps replace cats? What would be the revolution in the mousetrap metaphor? Making mice extinct?
I’m suspicious of the current 3D printing mania. High end desirable products typically follow this evolutionary pattern:1) Conspicuous consumption of expensive/unique ingredients2) Increased precision3) Authoritative endorsements3D printing fails on the precision & expensive ingredients dimensions (low precision versus hard tooled production & uses common printable mat’ls). It does have celebrity cheerleaders, though. The end products are just not that great. However I am positive on the rise of well-resourced specialty manufacturing shops, sort of like Kinkos for product production. Combine digital job submission and the ability to bring the finest production methods and materials economically to even small volume runs, very quickly executed.
3D printing is pretty well accepted in the manufacturing world. It doesn’t take long to compare a quote for 3D printed parts to machined or injection molded parts – and usually the 3D printed parts are a better deal. And you can 3D print tooling as well, to make production quality parts for molding for example. I dont think you even need consumer involvement for 3D printing to be revolutionary in manufacturing.Most people don’t care how their products are made, but 3D printing can build designs that are highly improbably and novel – so people will buy them just for that reason no matter how they were made.
public companies that create 3d printers are experiencing growth. it’s strong. not mind blowing. they trade under the tickers DDD and SSYS
Check out PRLB. They do “rapid manufacturing” in a more traditional sense and recently IPO’d.They are “competing” in the greater market with 3D printers and 3D printing service bureaus, so it would be interesting to see how they stack up against 3D systems et al.
thanks for the tip, william:)i don’t do stocks any more. i’m more pro running a business. the stock market is a bit of a con imo.
Right, I see the stock market as more a source of data than anything else, that and a way to get into shareholder meetings at public companies.
agreed!i listened in on the DDD earnings report without having their stock–it was interesting.
Long post , but it was great the way you laid out the history of the cycles.Your ending that all bets MAY be off was a little unsettling, but could be very true.#RhymeContines
You left out Hewlett-Packard, a bastion of Silicon Valley’s history & evolution. The garage they started at is a historic site. Steve Jobs was a summer intern there & they influenced him heavily thereafter. Ironically, Apple recently bought large sites that belonged to HP in Cupertino.
My thoughts exactly. I would have said HP begat Apple.
so maybe HP is the first tree not Fairchild. it was started in 1939, long before the transistor was invented.
Yes, to many, HP is what started Silicon Valley. My best (and first) 14 years of work were at HP, 82-95. These were foundational years for me, and some of the best years of their growth & culture propagation. I met Bill Hewlett briefly at a trade show where he visited the HP booth we were at in Atlanta, and once caught a glimpse of Dave Packard in his office in Palo Alto. Legends.
so i entered when you left. Apple’s new flying saucer HQ is being built where my HP Cupertino office was. Apple was also a client of my dev company.
These were the good HP years. It started going downhill when they split the company & Carly too over.
IBM goes back even further, but of course wasn’t founded in Silicon Valley.
Your wonderful post prompted me to do more research. I’ve lived in the Bay Area my whole life. From my deck is a view from Oracle to Moffet Field with the tip of Hoover Tower (Stanford U) peeking out. The Bay Area is a Mecca for risk-takers and those who challenge conventional wisdom.When you grow up here, you have the feeling of isolation from the rest of the USA and that no one takes you seriously (well, until it became the Silicon Valley). We were left alone to create our own view of the world.If you look before HP, you’ll find that Frederick Terman (professor at Stanford U, 1925-1941 whose courses focused on work with vacuum tubes, circuits, and instrumentation) taught both Bill Hewitt and David Packard, encouraged students to start companies and personally invested in HP. Probably no accident since Moffet Field opened its hangar doors in 1931. Ames Research Labs opened in 1939, where advanced research for supercomputers, robotics and aerodynamics took place.During WW2, Ampex was a small manufacturer of high quality electric motors and generators for radars, that in 1944 expanded to create magnetic tape, recorders and other devices. Bing Crosby was a major investor since this new technology allowed him to create pre recorded radio broadcasts that were sent to NYC. Meanwhile, Bing could enjoy playing golf year round and live in Hillsborough, on the Peninsula. Interestingly, Ampex was located in San Carlos, CA… within blocks of where the first Digital Audio Recorder (Dyaxis) was built to use the Macintosh Computer (pre-dating Digidesign Protools by a few years, also of Bay Area origin — ). These digital audio advances were born out of technology that George Lucas was developing at Skywalker Ranch in Marin during the 70’s.Above Sand Hill Road, is the Stanford Linear Accelerator, (SLAC–founded in 1962) which was a favorite field trip for us school kids. The Home Brew Club that spawned Woz and SJ to create Apple had its meetings there. From quarks to space travel, kids were allowed to dream fantastic dreams.These kinds of complexes require land.. lots of it. With 12 months of mild climate, few natural disasters (hey, we enjoy the ride of an earthquake now and then), room to expand (and apparently, the ability to keep expanding to some chagrin), and limited unionization of labor, from 1930’s to the 2000’s there were few places that could compete. There was no more land to grab…, except in LA and Seattle.But, there should be consideration for why Leland Stanford, a railroad tycoon, came to California to found Stanford in 1885. The California gold rush of the 1850’s, brought adventurer from the East Coast to find riches in CA, though it turned out not to be gold. Leland (and others) found his riches in wholesaling that built him and others an empire. San Francisco became a well known port and the financial center (until the late 1900’s, if not still today). People came here to start fresh and find fortune… including my all grandparents. I’d guess most Californians are second generation from outside of the USA.What can you say? Ocean, airport, agriculture, civilization, all within 20 minutes and a climate that says “work and play never stops for snow or heat waves”. Okay, this is not meant to be a ad for SV…please, everyone go away and start your own hub. 🙂
Great stuff. Well played. Thanks.
No mention of Edison? why?
Because he worked in New Jersey?
Because he worked in New Jersey?
No snow though….how do you build snowmen???
Bob Noyce and his cohorts who founded Fairchild and Intel originally worked for a company called Shockley, which would have been the first -silicon- company in silicon valley, including the first silicon transistor, they started right around WWII.There’s a great documentary about Bob Noyce by the BBC called The Podfather, it was very inspiring and informational.:
Actually fairchild was started by a disgruntled team from shockley semiconductor lab. William Shockley, inventor of the transistor, moving to silicon valley was a seminal moment in SV history.
I hail from HP and also forgot it! Was a developer there from ’95-’98, then after got the blessings of management to spin off an indy dev shop with HP as a major client. We built it to 50 people and sold it to Palm/3com. Then years later, HP bought Palm, so you can see the virtuous circle of it all.
I have that picture in my laptop….and do you know how much P and H owned later of HP?
i can’t recall, but I’m guessing a combined 17%?
What will be the future of HP…
Uncertain. You saw they are laying off 25,000 employees?They need to drastically reinvent themselves. Their Board sucks as a starting point. Their best employees & senior execs keep leaving. It’s a very badly managed company today.
“If you study Silicon Valley, what you see is something that looks like a forest where trees grow tall, produce seeds that drop and start new trees, and eventually the older trees mature and stop growing or worse, die of disease and rot, but the new trees grow up even taller and stronger.”Based on this, a city needs a single technological company to make it big that can start to allow other seeds to be planted.If these seeds are supported by the surrounding community/city then there’s more chances for additional success, more seeds to fall from the successes and start to sprout.This of course can be applied to nurturing children (everyone) in a community as well.I see startup hubs as ways cities have used to have a competitive advantage over other cities.Clearly bigger cities have an advantage due to potential resources allocated, speed of networking, etc.. They perhaps can more easily draw in talent from everywhere else – just because a bigger city has more culture and a variety of cultures to offer, making them more attractive to a wider range of people.Of course it’s best for a city to try to keep talent and their youth local (avoid talent drain), which generally means providing or allowing opportunities for them to exist.The best run cities and healthiest cities direct resources to this area – innovation, development – and not a ton is needed on the city level, just enough to start the culture.Most cities lag in the internet technology or don’t consider it its own ecosystem to be nurtured in a unique way – which it very much needs to be as the metrics are very different and thus prevents the ‘viral’ growth of said community.I would love to help guide and cultivate such an environment in my city. We have ridiculously good and untapped resources here.”So if this revolution is anything like the last, the next big thing will be invented any day now and within a decade or two we will be on to the next technology revolution.”This gives me chills and mainly so because I am aligning my own plans with the next cycle, meanwhile they will still thrive during this cycle.
I love this shop talk. If you’re a startup, the community around you is the air you breathe & the food you eat. Speaking of Canada, Ottawa used to be a hot bed for telecommunications/software activity (Nortel, Newsbridge, Cognos, etc) but they couldn’t survive the next cycle because their millionaires left town or didn’t start any significant follow-ups (except for Terry Mathews). Toronto has potential, but is still 3-5 years behind New York in its maturity level. Research in Motion had the chance to spawn a revolution around them. Instead, they are faltering at every occasion they get. Vancouver is too small to make a difference but it has the right ingredients. That’s why I’m spending my time in New York & San Francisco, the 2 poles of the US startup ecosystem.
RIM’s demise can and should be very good for Waterloo and Toronto
How so, please please elaborate…
it is the tree that rots and dies, but not before making lots of money for some who can become the angel investors in the new companies started by the folks who made enough money and learned enough at RIM to start the next thing
Presumably lots of talent as well.
yes, absolutely. that was inherent in my point, but i did leave it out
I’ve not seen great resumes from RIM yet that fit startups. They have a big company mentality.
what would you say is the best things to look for on a resume for startups?
Proof that you are an expert at something & that you are flexible, nimble, can work under uncertainty, self-learner & a nice rounded personality. If you come from a big co, I’d like to see that you have ventured outside the corporate fish tank, and that although your company is stale, you are not. Show me that you kept up with the times & know the latest & greatest in your field. Not everything is in the resumes. Social channels tell you something of course, then you meet or video/Skype to get the rest.
very useful. thks.
Let’s hope this can still happen, because the evidence so far is stacked against anything falling out of RIM that’s benefiting the outside ecosystem.
Portland had Tektronix but it didn’t work out this way. It produced quite a few saplings but they were all wiped out in the winter storm. Now we are starting over, it seems, without the guidance and support of an “old guard”.
hmm. that is a cautionary tale.
Cautionary, but part of the creative destruction that goes on. The old guard disappeared, there was an infertile time, and now the cycle starts again. There are awesome things going on in Portland (we are investors in Urban Airship and about to close a second investment there) and the new guard (many of whom are experienced entrepreneurs) are reinvigorating the place with a passion, without being constrained by the old guard who made a bunch of money but then didn’t seem to reinvest in the next generation.
I can’t get my head around the ‘why’ for Toronto. I just don’t know it well enough.I can draw a picture, culturally, of NY, LA, SF. It’s not just infrastructure and programming talent that creates a ‘place’. Its got its special soul.What’s the there there of Toronto?
waterloo is to toronto as palo alto is to san francisco
True, it is. But Toronto and Waterloo don’t collaborate well with each other.
Toronto is a generic city. It’s a good, clean, nice city to live in. Nothing revolutionary about it. Toronto is like what New York would have been if it was built by the Swiss.
Lol. Know exactly what you mean. I loved going to Switzerland but after a couple of days there I used to find it very sterile; somewhat disturbingly so – re: so totally devoid of any ‘edge’, as mentioned elsewhere in thread.
Montreal is a big center for video game companies, largely due to ludicrous tax incentives. But now there is a big pool of design and development talent in the city.
Yes, sorry I forgot to mention Montreal & there’s lot of good stuff happening there including the gaming part. The good thing about Montreal is that people that live there are loyal to it, and they don’t easily leave. I’ll be there this coming Wedn for Accelerate Montreal & Founders Fuel day & there’s a great line-up of companies I’m looking forward to seeing their demos.
@wmoug:disqus Hi William. You started Engagio, correct? I’m a wildly enthusiastic fan of Engagio. Anyway, I’m curious to know what you mean by spending more time in NYC & SF. Are you there looking for talent? And if so, what do those locales have that you can’t find closer to home?
Hi David. Thanks re: Engagio. I’m following your discussions on blogs too via Engagio 🙂 Talent, yes but in terms of leverageable talent, not straight hires per say. I’m there to look & feel part of the ecosystem, to develop relationships, to raise our visibility & to be closer to where my market is. I get a lot more from a marketing buck spent in the US than I did if spent in Canada. The US market is very efficient for marketers.
“to develop relationships”This hits on a point that @twitter-41899343:disqus made about virtual relationships. Physical proximity allows you to build emotional connections which is the key to being able to do deals, connect parts of a puzzle, learn, and of course help others (which results in benefits business wise). I know of so many anecdotal stories of people who did deals as a result of belonging to a country club (or even in the case of my father – his health spa membership).
Indeed. Many of these relationships started online / onsocial.I’m on a mission to promote the power of online conversations.
Right! The online conversations allow you to narrow down and target exactly the people that you want to have IRL’s with. It’s very efficient.Compare this to the time wasted by going to a meeting or convention and having to have random conversations (and be tied up) with people who you have no interest in being around once you get to know them.
Thank you, William, for your response. Makes sense. I’m fascinated to see how it all plays out for you and Engagio. Wish you all the best.
Boston seems to have missed the boat, somewhat? Ironic.Maybe it is compromised by being so – relatively – close to NYC?
Someone should study why SV was able to elegantly pivot from the infrastructure period of the digital revolution to the application period while Boston was not. There is a fantastic lesson in there sonewhere
Irony compounded by, of course, MIT’s legacy and presence.When I was important/somebody and travelled a great deal, lol, I spent a lot of time in and around Boston – to me, much as I love/d the place and Mass’ in general, it always seemed to be too ‘nice’ and genteel to ever really be a hotbed for innovation/startups – to be somewhere that fosters such a gung-ho spirit there needs to be a bit of an ‘edge’ to a place – hence why NYC and parts of CA are, I guess, so well suited.We are our environment. My wife lectures on such stuff in the animal world context – and we are no different – as she often reminds me!But, as intimated elsewhere in this great topic, where will be the next ‘edge’? I doubt it will be London or pretty much any traditional European city…
Yes, Boston was hot with medical devices/tech & hardware too. I used to go there monthly in the mid-late 80’s during the Route 128 growth period.
I disagree that Boston is missing the boat. Boston / Cambridge is a few years behind NY but accelerating very rapidly. There is incredible entrepreneurial density in a few neighborhoods, including Kendall Square, the Innovation District, and the Leather District. You are starting to see the next generation of hugely successful software / Internet companies emerge and the entrepreneurs are actively playing into the community.
While it sounds a bit small minded, one of the most powerful obvious and subconscious drivers of population patterns is weather.All of America is moving to the South — the central, southwest and southeast.People want to live where they feel good.I love California but I could not live there, hmmm, maybe so?You love Boulder — well, because your wife told you you had to — but because it makes you feel good and when you feel good you are productive..
I think there are many places in the world people want to live. I strongly assert that you should find the place you want to live and then build your life around it.When we came to Boulder, we didn’t know anyone but we wanted to move her because of (a) physical beauty, (b) middle of the country, (c) mountains. Six months in we realized this would be home forever.I know plenty of people who love to live in Minnesota. They would have a different set of reasons, but they’d be there.
@bfeldHorses for courses.Everybody has their reasons and when you mix in geography you are left with the coast, the mountains, the lakes, the savannahs, the cities and the ranches/farms.Over all of these sites is the weather unique to that unique location.California would not be California absent the sunshine and the positive ions in the air off the Pacific.In general, even when these other conditions are factored, the numbers show America moving to the South. Sorry, Maine, no offense intended..
Is it possible to sketch out the minimum requirements a wannabe webtech hub location would need to have to have a shot at successfully emulating a place like SV?
That’s a loaded question. So much has been written about competitiveness clusters including Michael Porter’s specifically. More recently, @bfeld is working on a book that will cover this topic. In my opinion, the one ingredient that is the most difficult to emulate or re-create is the collective entrepreneurial culture. Making it organic is the tough part.
It’s hard to match the # and density of people in NYC. This is a powerful rapidly accelerating network.(Can’t remember my usual disqus name? Then, disqus eats my comment upon login?)
In my upcoming book (Startup Communities) I write extensively about Startup “Neighborhoods”. What you have in the Union Square area is a startup neighborhood. You’ve got this in DUMBO and a handful other spots in NYC. At them all up and you get the Startup Community of NYC, but the neighborhood is a key concept since it generates massive entrepreneurial density ((# entrepreneurs + # people working for startups) / total working population in a geography) which is what you are referring to.
I agree. I think NYC has the potential for the most startup neighborhoods and the best transportation infrastructure to allow for the most physical interconnectedness among them.
Sorry, I trailed off after neighborhoods…How about entrepreneurs = people working for startups? Don’t you mean,(#people at startups in a given space – #total working people in a given space)/space. This gives us density of entrepreneurs per square km or something like that. We can the multiply this by overall population density to get a better measure. This is why cities and places with high overall population density have more potential (I think)
It’s a different measure but also interesting.
Or maybe you just care about Entrepreneurs/space. (e.g. 1000 entrepreneurs per sq km) If this is high it is good. If non entrepreneurial density is high, this is probably good too? (i.e. a multipler) There are more and a greater diversity of people. This is an advantage of places like NYC?
Nope – absolute number of entrepreneurs isn’t nearly as important as total # people working for startups in the same geography.
Sorry, How do you define entrepreneur? (Founder of a company?)
i enjoy big picture macro discussions, as they provide me with ample opportunity to spread the bad news i enjoy dwelling upon. sincere thanks.i’d like to start by repeating the same points i usually do:1. customers, capital, and energy are all headed east, outside the US. 2. for those who do not wish to entertain opportunities outside of western culture, i think the connection between hubs and geography is still undeniably strong — but weakening. the right network – i.e. open source communities, terrorist cells, anonymous, etc — may be what spawns the next big hub. as the nation-state system continues its collapse i find this to be a particularly compelling scenario.i have saved the most morbid and depressing point for last. unless the political paradigm is fixed and unless an energy source sufficiently powerful/dense enough to replace oil emerges, we have reached peak prosperity/peak innovation/peak wealth. there remains insufficient political will to deal with these problems and the march to world governance continues; atomic energy is fortunately growing, although much progress is needed and at a much faster rate (as usual nation-state governments remains a major hindrance).
so the next silicon valley is in cyberspace?then maybe it will be at AVC.com?
now we’re talking!
i am starting to understand your world view.
It is. AVC.com is its own mini Silicon Valley. That’s why I spend time here.AVC = Awesome Valley in Cyberspace
lol i like that — good acronym!
AVC = Awesome Valley in CyberspaceI wonder if I’m the only one who cringed a little when reading that.
“Awesome” jumped the shark a good while back.
I half cringed. 🙂
Was using @fakegrimlock language. Put your own A, or just AA Valley in Cyberspace Amazing, etc
Accelerating Visions in Cyperspace;)
Is that a Milan Kundera translated from French?
I’ll never tell! 😉
My username is the same on both sites!
The network is rapidly displacing the hierarchy and with it the virtual displaces the physical. We’ve got a ways to go, but think about how our relationship works (very little physical, a lot virtual, very close and intimate, even though we are rarely together physically). I experience this even more profoundly as an introvert as I’d love to spend even more of my time physically alone but emotionally and intellectually connected.
That works well for us but not our wives. And I think thats a good thing!
I resonate with this a lot. I know a number of introverts my age (47ish) who are uncomfortable or fully reject social media as they have a preconceived notion it will result in “too much exposure and vulnerability”. They “pooh-pooh” it saying people who engage in social media are either exhibitionists, narcissistic, immature, pathetic, etc.I feel bad for them in having this view as the reality is social media is exactly what an introvert is looking for. “Virtually” (pun intended) no human is completely antisocial. So even those who we think of as introverts do crave a regular amount of social interaction.Its just that the introvert wants more control over that interaction than the extrovert and tends to think fully rejecting social media is the best way to avoid losing control of their social life. They worry about being overwhelmed.But the thing they are missing is that social media offers them total and high-fidelity level of control over socialization that is ideal for their needs. They can turn social media on and off instantaneously so they can get as much or little as they want whenever they want, wherever they want.That’s introvert heaven.
Which are the startup communities that are leveraging the “virtual” in their communities the best? Boulder comes to mind.Boulder, certainly in my mind has “more mindshare than marketshare”, and that’s a good thing.
Boulder does a great job of this although I encourage you to come visit and see the actual market share which I think will blow your mind.Cross community is where it becomes really powerful – think Techstars across Boulder, Boston, NY, and Seattle.
Don’t do it, @wmoug:disqus ! Boulder is a beautiful place which is difficult to leave. It’s like a self-imposed Hotel California. Brad is setting a trap.
I meant it as a compliment, totally. Anyone that has more mindshare than market share is on a winning path. I’ve been twice to Boulder, once on business 2 years ago, and once for a short visit 8 years ago. I’m sending my CTO next week to GlueCon as you know, because of your involvement with it. I’d love to be back in Boulder sometime this year.
I know you meant it as a compliment. Boulder welcomes you any time.
Agree completely. And your post some time ago (on feld.com) regarding introverts and a link to the article in the Atlantic proved to be very helpful to me. I’ve wanted to thank you for that and just waiting for the opportunity, so “Thank you”. The article helped to illustrate to others, certain feelings in a way I hadn’t expressed or addressed, and kindled additional dialogue for clarification and accuracy regarding “my version”. Again, thanks.
Awesome – my pleasure.
that would be fascinating, but doubtful. It takes more than just a virtual community and virtualization – you still need organizational efforts, and that is hard to manage virtually…
For some reason your comment makes me want to reread a bunch of William Gibson novels.
Thomas More’s Utopia 1516.http://en.wikipedia.org/wik…
I resonate with your comments and concerns. Despite that I do have some optimism around all your areas of concern.1 & 2 As Fred and others have said I agree that customers and capital and energy are headed into the interactive online human network. So physical location flexibility will go from dozens of megahubs at major metros to thousands of self sustaining but inter-networked mini-hubs that rise above the lines between nation-states3 & 4 The political paradigm is changing and being fixed rapidly with the new “social-media” style of bidirectional information flow reaching a critical mass. IF you step back a bit and look at whats happening you see that social media information flow is flipping the magnetic field of political power from top down to bottom-up. Yes there are challenges and the “top-down” powers that be are trying to stop this power filp. But I think the tipping point is about to be reached in this years election cycle in the US and across the globe after that. Going forward the control of information/truth/fact will no longer be in the hands of the powerful few.Also go look at the status of research at the National Ignition Facility http://www.nature.com/news/…We need one last hard push and NIF will achieve breakeven energy on clean fusion in the coming 12 months and within 10 years we could see the first fusion energy being generated in large quantities.The human race is approaching an inflection point in the next 20 years where if we focus on clean energy, education and innovation we’ll reach the Kurzweil vision of singularity.
Some great thinking in there.I am amazed that small nuclear power plants are not being embraced. You can currently get your own baby nuke to power your own neighborhood for both power and heat for about $10MM.In a northern climate you could melt all the snow on every road, every sidewalk, every driveway and provide hot water to boot.I am trying to get my neighborhood association to buy one — just kidding.The issue of energy and nuclear fusion is right at our fingertips. It will be a reality within the next 10 years..
we already bought one one in my home town…what you say about that…advanced thinking or shape goat?http://en.wikipedia.org/wik…
china is making good progress with the small modular nuclear reactors. ghana just agreed to go nuclear and i believe it will be more economically viable for them to couple a small modular reactor with solar power as the basis of their energy infrastructure.
That’s it – what about what to do with the fuel afterward?
I am amazed that small nuclear power plants are not being embraced.Psychology. Very small chance of a very big thing going wrong.It would be interesting to see at what point a person would choose nuclear power over other alternatives if it was framed in terms of money. Pay $275 dollars per month for electricity with existing system Pay $75 dollars per month with baby nuke (great “pink slime name btw”.)(arbitrary figures above)Of course even if you get a large enough percentage of the public to agree to this (say by vote) you still will have the wacky percentage of the public that will protest it and block it from happening.
The US Navy has operated over 400 mini-nukes without one fatality. Any other form of energy that safe?.
Not my view but my view of the public’s view.Try telling someone it’s no big deal if the cook spits in your food that the chance of getting sick is so slim. You can’t overcome emotion with a rational argument. You can’t tell someone (and show by data) there is less of a chance of getting into an airplane accident on a cross country flight then statistically in an auto accident. People were all freaked out that Jerry Sandusky was watching the kids at the school behind his house. As if he would reach out and molest one of them in broad daylight.You could however possibly brainwash people out of a particular way of thinking. Or if you dangle a dollar in front of them greed might get them there.
i agree with what you are suggesting as the solutions (virtual networks and fusion power). my only concern is that this will require a political battle and i’m not sure we as a collective society have the will for it — yet. i remain hopeful that as the situation we are in becomes clearer we will find the will and see the solutions before us that you have outlined.
Agreed. You are right on target. It’s all about being able to raise to prominence the will of the many and diluting the will of “the overly self-interested few” in a way that avoids the overreaction that historically is part of a reversal of power.The last thing I want is this coming reversal of polarity to look like the French Revolution. The population is now way too big and the house of cards stacked way too high for that kind of violent reversal to be anything but awful.We need to unstack this house of cards in as controlled a fashion as we can manage.It’s time for the wise among us to step up in a sober fashion and keep people calm and confident as this major change begins to happen.As they said in England during the blitz…”Keep calm and move along.”
I believe a switch away from oil will happen relatively soon (2020-2030). There are a number of technologies that are maturing, and there’s enough widespread interest now that the organization of systems will continue to speed up and amplify.
U are so confused when you don’t know what is 2001…grow up kid …
oh snap…..why don’t you put me in my place and enlighten me……unless you’re just talking smack and got no info to back it up
U can’t handle the truth….when everyone knows the truth.
i don’t dispute that i cannot handle the truth or that i need to grow up. you are suggesting that everyone knows the truth. all i’m asking is that you share the truth that you know, provide supporting facts, so that i can be enlightened.you opened your big mouth here in front of everyone and launched an unprovoked attack against me. i’m always game for a beef so no qualms here. but now it’s time for you to back up your statements or sit back down.
Sir Mercury,,, this the question you have to ask those 100s of Engineers and Army , air-force, naval professionals and the AVC guy Not me.ASK THEM WHY THEY ARE NOT SHITTING ALL OVER THE NET LIKE YOU.NOW CAN YOU SHUT UP AND GET SOME SLEEP.
lol…..it is unclear what you are even talking about though it seems to be something related to 9/11. i have asked you now three times to clearly state your view and support it — obviously you are unable to do so, choosing instead to respond angrily in all caps. i do thank you for your participation in this discussion as your inability to form a coherent thought and your unprovoked attack will help to awaken more rational observers.
@kidmercury:disqusThis exactly what i wanted convey … you become a laughing stock in your own community (today’s comment on AVC (29 may 2012). Hope you take this in a positive sense.don’t handle the truth when everyone knows the truth.——————————————————–I typed this following message on the other day … but did not post it as you were not in a position accept what i was trying to say.Here it is now….Ha ha ha…. you are not the first to say that … my father always said the samething … “when you talk… you talk very coherently and convincing … but why your writtings are ‘telegraphic’.If i can’t convey over 3 comments that i am asking you to reduce your volume on 9/11 … i can never convey what i think to you (rather anyone) in writing. When i saw the twin tower going down in a local channel in india the first thought thatcame to my mind is “why america is doing this to themselves?” … what is the big thingthey are trying to hide by sacrificing the 2-towers, the lives within and more than anything elseThe horror it will bring to the people U.S. of A.A decently educated engineer can figure-out that there is something gooffy… A ordinarycitizen who beleives in U.S. of A’s defense system will accept there is some ‘magic hand to the incident’.
what amazes me about folks like yourself is you obviously know i am a full-blown kook, you obviously have read my comments, yet you clearly have not interpreted any of it. you are correct a decently educated engineer can tell there is something goofy and many of them already have, as i have noted literally hundreds of times on this blog. please visit ae911truth.org so you can educate yourself about elementary engineering, physics, and the basic facts of the day. you clearly lack a simple education on this subject and are embarrassing yourself as a result.
or, because of virtual interconnectedness, the entire country becomes a start up hub. place doesn’t matter, only the idea and execution.
The entire world rather…
Culture of place is obsolete?I’m a big believer that this is not correct regardless of the real-time connectedness and city-llike dynamics of the web itself.Culture and personality is the creative force. It that’s not tied to place, it’s tied to what?Sorry…one of my hot buttons. As soon as you make tech the top rather than people and their drives, it rings unclear to me.Am I misunderstanding?
I am saying you don’t have to be in SV or NYC. You can be anywhere and collaborate with anyone. I think we agree, it’s about the people, not the place, and the web can interconnect them in ways they couldn’t back in 1939 when HP started.
Virtual will never replace a smile and a handshake.
What are your thoughts about London as a Startup Hub?
what is the Fairchild Semiconductor of London?
Good point. I’m not entirely sure we have a mega-success like that. There are more or less solid successes – like Lovefilm, or Last.fm, seatwave, Moo, Mendeley, and so on, and lots of exciting upstarts, but it seems the local culture actively shuns away from building “epic companies” like Sun or Oracle in the technology space.At the same time, I’d hesitate to say there’s no startup hub in London… that doesn’t reflect the activity that I’m seeing around startups here. Perhaps it’s possible to jumpstart a startup hub without a Fairchild via investment coming from other sources (of which London has many)…
maybe it is Spotify. and even though Skype is not headquartered in London, it sure feels like a lot of Skype’s founders, investors, and employees ended up there.
That’s true, though Spotify is far from huge. It’s not even public yet! I guess we’re on gen-1…
You’ll be offending the swedes if you said spotify was london.I thought they were stockholm through and through.Agree about skype..
i used to work for the data centre company that hosts most of spotify’s equipment in london. they very rarely came to the data centre. i’m not even sure if they have a london office.
Further thought: having a Fairchild doesn’t mean you’ll get a startup hub. For example, Microsoft grew up in Redmond, and made a lot of millionaires, but as far as I know no one is talking about Seattle being a startup hub. Perhaps there’s another magic factor needed. Perhaps that magic factors is even more important than having a Fairchild…
I am sure you are right. It may be necessary but not sufficient
London feels (is) too big. Odd premise for a possible flaw, but that’s how it always strikes me.
The study of these S curves is always fascinating.One theory I have in mind is that the S curve durations cannot be judged from history i.e. if it took 75 years for Silicon valley to become silicon valley, it will only take 37.5 years for the next one. – timelines are always shrinking.(Think of gaps between financial crises, time it takes for organizations to have 1 million users etc etc – all shrinking.)So, change could be sooner than we think.Then again, like in these curves, maybe Silicon valley will innovate itself out of this and be the hub of the next curve.
I’m not sure the timelines are “shrinking” – I’d assert they are unpredictable (or non-predictable).
Fair enough. Why do you feel the unpredictability quotient has increased though?
I don’t know.
Interesting analogy to the life cycle of the auto industry. Something I touched on in this post, Web 2.0 versus Auto 2.0, was how, prior to the dominance of Detroit, there were ‘Auto 1.0’ start-ups in places like Mercer County, NJ.
What a great post. With all those begats it read like the Leviticus of Silicon Valley.Chris Dixon says this often on his blog, that what NYC needs to really take off as a tech hub is a PayPal-like exit that creates a big group of serial entrepreneurs and investors with enough capital to take a lot of risks.When Foursquare, Tumblr and others go public or exit there is going to be another wave of innovation from their founding teams and early employees. That will be a fun time to be an entrepreneur in the city.To your last point, and this may be optimistic and short-sighted on my part, but I don’t think Silicon Valley will ever have the same fate as Detroit. Why? Because the autoworkers in Detroit had highly specialized skills. They made cars. Not only that, some people were only trained to make one very specific part for a car.Silicon Valley (as well as the tech community in NYC) has a culture of constant professional development. Software engineers and designers are trained to solve problems at a very high level, and they are used to teaching themselves new technologies on the job. Ever year new frameworks and languages emerge and learning them is just part of the job. Combine that with the culture of taking risks and suppressing the fear of failure and you have a model infinitely more flexible than the assembly line.“Let us so live that when we come to die even the undertaker will be sorry.” – Mark Twain
a ton of companies have come out of Doubleclick. it is the PayPal of NYC that Chris is looking for.
Except DoubleClick founder Kevin O’Connor started his next company in Santa Barbara, CA and not NYC…
yeah, but gilt, 10gen and a bunch of others were built in NYC. and Doubleclick CEO David Rosenblatt is now running 1stDibs.com.
Didn’t know about 10gen.I guess it’s just difficult to compare to the PayPal team. I mean, Elon Musk is building electric cars and commercializing space travel.
yup. but paypal happened six or seven cycles in.
Great point I hadn’t considered that.
People get smarter and more capable when they have success under their belt (and for the first time in history a big failure has almost equal benefit which I don’t believe ever happened in the past). For one thing they end up being able to associate and learn from other smart people that others don’t have access to. They are also able to attract better people to work for them, give them guidance and advice on what they don’t know about. For arguments sake there may be 10, 150 or 15000 Elon Musks in the US (and more in the world). But without the success of paypal they wouldn’t be able to do what Elon is doing now.As far as the paypal team that is like a musical group that is successful as a result of being with others of great talent. Take the BeeGees who were brothers. What’s the probability of so much talent in one family? That’s why we haven’t seen it other than the BeeGees.
“for the first time in history a big failure has almost equal benefit” – I preach this in my professional and personal lives but find it hard to live up to it.
i’ve been seeing some anti-mongo posts recently–people migrating over to other DBs. with issue such as stability, issues around the data model, and the time it takes for secondary nodes to elect a new primary when a primary goes offline etc.
The platform is young and being adopted rapidly and for use cases its not optimal for (yet). You are seeing growing pains. All huge winners go through this stage and survive it. Some could have been winners go through this and dont. I am optimistic about Mongo but they have to make the product better and more stable faster than they may have thought. The adoption curve is breathtaking and scary at the same time.
what is jafa script?
Nope…what is jafa script?
i’ve seen it mis-spelled that way. since you’re being coy i’ll assume it was a typo
No problems whatsoever…. we will meet in the next round
Agree completely Because the autoworkers in Detroit had highly specialized skills. ……Silicon Valley (as well as the tech community in NYC) has a culture of constant professional development. Software engineers and designers are trained to solve problems at a very high level, and they are used to teaching themselves new technologies on the job …..
have you taken your sleeping pill?Please do and get back to sleep.
In what though – so far we’ve been talking about silicon and things that run on silicon – maybe the next Fairchild is going to be in biotech….
Unlikely, in part for reasons Fred and the FT’s John Gapper laid out recently (as I mentioned in a recent SA post).
Well, maybe not biotech, but we’re not articulating why it is going to be “the internet” forever….
“Forever” is a tough time horizon for predictions, but Fred did articulate precisely why web and mobile are attractive areas of investment: relatively low investment required, and high potential returns on investment.
“Forever” is a tough time horizon for predictions, but Fred did articulate precisely why web and mobile are attractive areas of investment now: relatively low investment required, and high potential returns on investment.
What will be the next Silicon Valley? Silicon Valley is people. People are the place, whether it’s Austin, Boston, or NYC, it’s people.Where will the next Silicon Valley be? In the bedrooms, garages, shared work spaces, basements, sheds, and dorm rooms of people.
Where will the next Silicon Valley be? In the bedrooms, garages, shared work spaces, basements, sheds, and dorm rooms of people.Your second sentence there doesn’t answer the question raised by your first sentence. Where will the bedrooms, garages, etc. be located? Although Silicon Valley sells the connectedness capable via the web and mobile, in reality, entrepreneurs and those that support them (investors, vendors) generally need to work in physical proximity in RL, and so they tend to cluster in places such as Silicon Valley, NYC, the Route 128 corridor, etc.
“People are the place…”That’s how I see it. Silicon valley became “Silicon Valley” because of the people. It now remains Silicon Valley because of what those people created there. However, if you were to build a silicon valley infrastructure somewhere else without the “right kind” of people it would fail.I think your “where” is correct. People now live where the weather and topography fit their liking. So, the what (people) that created silicon valley now lives where it wants knowing it can connect with the world via the internet.As the workplace becomes more virtual it will be more important to *not* be geographically attached for startup or investing purposes.Some important points are:- No wasted time in traffic.- Healthier food, made by you, for lunch.- Split your workout into a morning and evening session because you don’t have to drive to the gym.- If people are traveling they can still meet for little to no cost via the internet.- If you have a mouthy, useless, uncreative, lazy, asshole boss you don’t need to invest in moving to a new place to live. You just remove that person from your contacts and start on a new project. <- I added that one mostly just for some fun.
you are funny any way….why only the last one :-0
The first four aren’t marked as fun because I see more and more people benefit from them every day The last one just seemed funny at the time. Although, I’ve been a victim of those kinds of bosses in the past. Just to be fair, I’ve also worked for some great people. But for me not being in a founder or entrepreneur position leaves me with no reason to get up in the morning.
Good response, this is what I’m thinking as well.
Love the Mark Twain quote. And everything else from him. Do you know he used to live on 14 W 10th (btw 6 & 7 ave) and used to buy drugs in Bigelow, which is still here after 150 years.
i lived at 11-13 W 10th for most of the last decade so I do know that and it is one of the many reasons he is one of my favorite people ever
I need to read more Twain. Woefully ignorant of his works, as most of us Brits are. Looking back, it’s remarkable how insular our education was re: English literature. Sure, we had/have a wealth of our own literary talent to choose from but shame it didn’t have a more worldly view back then – wonder if it does, nowadays?
“The Adventures of Huckleberry Finn” is the classic but if you’re interested in Twain’s witticisms and worldly wisdom his travel writings and essays are the place to start. “Life on the Mississippi” and “Roughing It” are good and you’ll learn a lot about the American ethos.(I studied literature).
Thank you, Luke. Noted!
I second Life on the Mississippi. Great memorable novel.
I lived on W 10th too, but in Vancouver 🙂
Back in those days you could -actually- buy drugs at Bigelow
I don’t know how much it really affects your line of thinking, which I think is right, but even HP needed the right conditions to start – they needed a professor named Fred Terman, and a lab named Stanford, to really get it worked out. Terman gave them space and support and mentorship to be able to go out and build interesting things for an interesting client (Disney). Fairchild (and Shockley Semiconductor before that, where the Traitorous Eight started) were important for the cycle of destruction, but the attitudes of giving back to the community really came from Terman and Hewlett and Packard (even though it’s very hard to see in today’s HP), and the university/industrial complex money were, in my mind, the critical starting conditions and fuel.Hope to catch up at Disrupt.
thanks John. i know that my history is incomplete and the failure to include HP is a perfect example of that.your point about the “other factors” is clearly important and the recycling of capital back into the ecosystem is the most important factor for sure that is what makes me so excited about NYC these days. it is happening very much in the silicon valley way here in NYC right now.
Yep, I think that point is an excellent, excellent one – that with Doubleclicke we are maybe 15-20 years into it in NYC, so exciting to think ahead several generations about what might become. It’s the most promising ecosystem to develop in a long time.One thing I think about a fair bit, though, is that there were a number of points along the way when people figured Silicon Valley had played itself out. That it was too tied to semiconductor. Or the PC. or the Web. And something about the place gave it enough robustness to move from one technology cycle to one that looked very different. I think it’s not quite as linear as you put down above – or maybe that’s your point – evolution always looks linear and inevitable when you’re looking backwards, even though it’s anything but inevitable as it is developing.
Ack, also, I meant hope *to* catch up at Disupt, not what I wrote there. Typo from glass. 🙂
Thanks, Fred. Really enjoyed this post. It’s a great analytical framework for investors, entrepreneurs and policymakers, especially those responsible for economic development and innovation.For startups, it’s also an interesting exercise to consider who begat thee — ie., in whose footsteps are you following or in whose shade are you growing — as a way to place oneself in the time continuum of an innovative darwinian startup hub.
As much as I love the SF Bay and Silicon Valley has been very good to me, if I were a VC looking to set up shop, I’d seriously consider emerging markets, where future startup employees can still get an affordable 1st class education, and politicians and citizens haven’t squandered generations of wealth to become a debtor nation. I’m Dutch and grew up in the Caribbean, but my children are learning Chinese as their second language. Of course it’s quite possible that we’ll continue to thrive right here (e.g., some of that FB slush fund will certainly be invested here), but it’s time to hedge your bets…
you are so right. i think eastern europe is very interesting.if i was 34 instead of 50, i would be starting 19th Meridian Ventures
Some of the finest minds – and nicest people – I have ever worked with came from Hungary.
…and prettiest girls 😉
That’s a great VC firm name by the way – snap it up!
http://g.co/maps/kpxd9 That makes a neat map: Sweden to South Africa!wow i want to hear more on that thought. I’m in London this week meeting investors partly around this theme, besides also meeting Shazam and Spotify.
Points for using the word locus.And I respectfully disagree with you and Mr. Twain. History repeats itself time and time again. In fact history has proven that so. 😉
That may be the point of the begats….
Perhaps, but begets in my mind is more “to trigger” than “draw from history”. Just the last line threw me. Loved the post.
Rhythms and cycles;http://en.wikipedia.org/wik…
Remember Law of Accelerating Returns, simply the time span shortens per next doubling.When you consider all of the doublings, this is going to be some decade. As we move and mature via understanding new dimensions, the next new thing following the one you claim coming any day now will have us laughing in 2018 as we look back.
Humans generally don’t understand exponential curves. If you take a short enough time period everything looks linear and that’s how most people view what’s going on right now and what is going on in the forceable future. But almost all innovation curves are exponential until they break, so the behavior as you accelerate is mindblowing – for a while – and then mindblowing again in a different way.
The hockey stick curve is the path between successive plateaus of iterative development.Sometimes those plateaus are final destinations — regardless of how many horsepower you strap onto 3500 lbs of airplane it can only go so fast because drag increases at the square of speed. Oh, you can slick that little jewel up but all that tarting buys you is 5 knots.Sometimes plateaus are just the beginning of the next hockey stick curve and ensuing iterations are going to be increasingly more and more productive — I owned the first Apple II in ATX with two 64K floppies and we have advanced a bit since then.I sit with my 94 year old Father and he tells me of life in the first quarter of the last century.Is this a great time to be alive or what?.
I did an explanation in the Kurzweil world (back when it was more hocus) that explained Accelerating Returns more linear when you get out of the box… used transportation starting with two feet, horse/camel, chariot/wagon thru today. Love the plateau metaphor!At the same time, plateaus are a matter of where the doublings cannot take place and it is a matter of someone solving the coming issue… for instance the chip.Great time to be [email protected]:disqus
@davewbaldwin:disqus ..The transportation metaphor is very apt. Thanks..
Mind blowing in a different way… Well put!
We’ve had 3 waves of digitization where prices have dropped 99%+, but sector revenues grew 10-25% over a decade as demand exploded. That’s because of the network effect, which is not quite an exponential progression, but it effectively doubles growth in each period. That type of compounding is huge.
Is FB silicon valley progeny?
Absolutely. The arc and involvement of people would have been very different if it had stayed in Boston. I have no idea what the success dynamics would have been, but the people involved would have been radically different ones.
Fabulous point.Great idea spawned at Harvard which moved its brain to a zip code with better nourishment, brain food.This is the mobility of a free country..
Thinking of startup hubs, how does Berlin match up to the described model of evolution? Is it in need of its Fairchild moment to move to the next stage?
The Samwers are part of the answer in Berlin. They provide a place to learn the game. But they dont make others rich
If wealth derived from exits equals likelihood of reproductive success, then it is fairly Darwinian. But considering that the characters and qualities which drive a company’s success (knowledge and know how; management skills; company culture) are acquired *during its lifetime*, this kind of evolution is positively Lamarckian!
not one of my favorite posts, kind of all over the place, no real point
sorry about that. i will try to do better next time.
Ha! Too funny. Can’t please everyone.I’m enjoying the read (and dialogue).
Tim – disagree – I think this is right on target around the evolution of a startup community over time and puts the dynamics in NYC in historical perspective when compared to Silicon Valley, which is a comparison that is being made more and more often (and usually done poorly).
I was waiting for your grand entrance to this importance topic which is smack in the middle of your next book 🙂 Well played !
Well – I’m two hours behind y’all AND was tired after the week so I slept in.
An interesting sub-topic that’s emerging here via Kid is that AVC.com is arguably a virtual startup community. Would be great if you weighed in on that theme.
Hugely so. I think I left a comment down below somewhere about both physical and virtual communities. The short version is that with the demise of hierarchies and the emergence of networks, virtual communities are even more powerful.
Thanks for the great historical perspective, Fred. I have just begun studying the history of the computer industry in earnest and this gives me some helpful pointers. By the way, if you want to read some well-written computer history, I really enjoyed *The Chip: How Two Americans Invented the Microchip and Launched a Revolution*: http://refer.ly/a09K. Also I have just started *Computer: A History of the Information Machine*, and am liking it a lot: http://refer.ly/a09r
.Typical great post and wonderful thought provoking conversation.The future is often haphazardly fashioned from a stream of fortuitous happenstances cemented together by luck at the hands of visionaries.Being in Austin, I am struck about how much impact innovative thinking organized at a community — perhaps governmental — level can have on the future of a city.Austin always had the University of Texas which, in addition to fielding a professional football team, always had a lot of entrepreneurial zeal and brainpower.UT already had and continues to have a world class research operation and makes no bones about its desire to commercialize its successes. Nobody at UT is embarrassed to make a buck.In 1977 George Kozmetsky showed up and it was game on.Dr K was one of the original founders of Teledyne, a genius and a classic entrepreneur who in addition to becoming the Dean of the UT School of Business also founded IC2 — the Institute for Creative Capitalism.BTW, George was a huge mentor to Michael Dell and was on his Board as the infant terrible that became Dell shed its swaddling clothes. George never stopped creating wealth through capitalism.He forged an immediate link among business education, entrepreneurial vigor, capitalism, technology and thought leadership.In rapid fashion MCC (Microelectronics and Computer Corporation) and Sematech were formed or lured to Austin.Adm Bobby Ray Inman, #2 spook at the CIA and head of NSA, was instrumental in the leadership of this effort. A very, very, very interesting cat indeed.Pike Powers, who lurks on this blog, was also a driving force. Pike had the Governor’s ear and was a political driver. The classic Chamber of Commerce kind of guy who got things done, funded and promoted without every really seeming to break a sweat but made all the right moves. A humble and powerful guy who could put his hands around your throat and never leave a fingerprint.It did not hurt that IBM, AMD, Motorola and now Samsung set up shop in Austin putting the factory floor right next to the lab.The reason I mention this is that Austin has had the combined efforts of a great university, great community leadership, great government sponsorship, great consortium building, a bit of political will and then threw the pixie dust on the gumbo and got out of the way.The invertebrates emerged quickly from the bog in Austin.Austin was originally a bit more semiconductor — continues — oriented. But it has now branched out to anything technology oriented.What it has going for it now is that is centrally located, has a great quality of life, a very young vibe and continues to provide the same kind support for technology that it ever did.I think the long term hidden weapon of Austin will be its supportive political and economic climate. Today Austin unemployment was reported at 5.5% — typical U-3 baloney but still quite a feat.Did I mention that Texas has no personal income tax?On Earth as it is in Austin Texas!And, oh yeah, we still have an OK professional football team. Hook ‘Em Horns!
I love how you love Austin and Texas.Doesn’t Austin also have car manufacturing?
No, San Antonio, which we embrace as part of the Austin-San Antonio Corridor. In San Antonio Toyota is making pick up trucks which still have a $4K cost advantage even after the post Obama GE-UAW dust up.Most importantly Old San Antone has the Mercado which features Mi Tierra which provides some damn good Tex-Mex and tequila.Tequila and Tex-Mex is about an even trade for a couple of years of Internet service.But, hey, that could just be me..
I love good Tex-Mex, Jeff, and good tequilas, but Austin has Tito’s Vodka, too, and that’s not bad at all. It’s the “house vodka” here. 😉
I passed on a chance to buy Tito’s for a pittance.I also passed on a chance to buy the Corona distributorship in ATX for next to nothing — thought it was an unsustainable college fad.Supremely dopey, indeed..
We all have passed on opportunities. Hopefully we learn a little each time so that we may seize the next one. At least that’s what I keep telling myself.
We passed on airbnb, square, and pinterest. Ouch!
Ironically, my first exposure to Tito’s was in Manhattan at the bar in The Gotham (hotel). I didn’t want to pay for Hangar 1 there; don’t like Grey Goose, but wanted something “decent”. Kenneth, tending the bar, suggested Tito’s and provided a taste. Made from corn, it’s pleasantly slightly sweet and quite smooth, and very reasonably priced (though not cheap in comparison to some). Now, even our little “corner store” stocks it in Auburn, CA.(Sorry, didn’t mean to add salt to the pass. 😉
Gotham Gal orders Titos when they dont have Stoli
We prefer Tito’s to Stoli, but I also order Stoli at times. These things are all personal. I once met a Russian molecular physicist who was staying where I stayed in Bangkok (prior to getting an apartment there). He was there to work with or speak at Chulalongkorn University. We were chatting in the Towers Lounge and I shared with him some very nice tequila that I had taken there. He’d never tasted tequila before and liked it. But what really turned his crank was straight shots of Smirnoff vodka from the bar! He’d never seen it before and thought it was magnificent. The bar had Stoli and something else, but Smirnoff was like gold to him. I said “really?? umm, okay”.
what is this tito’s vodka that you speak of?
@ShanaC:disqus It’s a nice vodka made in Austin, TX. Slightly sweeter than some; made from corn; has done well in tastings. I also like Belvedere, which is made from potatoes, but it’s more costly. My wife likes Tito’s also because it’s smoother to her. Makes a nice, not harsh, dry martini, etc. http://titosvodka.com/about/
Shana, I replied and included a link to the Tito’s site, but after it posted (and was visible) it looks to have been flagged as spam or something because it’s gone now. I edited the link to provide a path to the “about” page on the site, and that’s when the comment disappeared. Sorry.Tito’s is a high quality, modestly priced spirit worth trying if you like vodka. They were selected over Grey Goose, Belvedere (a favorite of mine) and others, in an international tasting. Selection was unanimous, etc.
I remembered you … when i saw this …knickerbockersFans and teammates rush onto court to congratulate Philadelphia Warriors Wilt Chamberlain in Hershey, Pennsylvania, after he scored his 100th point in a 169-147 win over the New York Knickerbockers, on March 2, 1962. The record still stands, 50 years later. (AP Photo/Paul Vathis)
And UT gave us Kevin Durant who plays basketball with a style and grace that I have not seen in a man his size. What a joy it is to watch him play.
If Durant had stayed at UT for 4 years and had stayed healthy, he would have been mentioned in every article alongside a fellow named Jordan.He is a 7′ point guard w/ a side of shooting guard with a killer instinct to boot.He is a delight to watch and a good person to boot..
Did you hear the story about the tweet KD sent out last summer about wanting to play some flag football and a young guy in Norman replied and said “join our game tonight” KD showed up and threw a bunch of TD passes. Its on YouTube. He is a man of the people
I did. Very cool. I love hearing about the “normalness” of people who have attained a bit of celebrity. It is heartwarming and it is encouraging.I have been amazed how ordinary people really are. Even when they possess monster skills.
I love this metaphor. It’s a lot like this quote from Steve Jobs’s 1985 Playboy interview: “Little by little, people started breaking off and forming competitive companies, like those flowers or weeds that scatter seeds in hundreds of directions when you blow on them.”Biomimicry is important to understand. I’m certain that Qualcomm (mobile) and Intuit (big data) is going to produce many many seeds around San Diego that will sprout into amazing companies.
the actual part of it is “blow on them”….blow on them … let the seed flow around.
I am Impressed … bring me more …
The recurring patterns that you are seeing in the microcosm of the tech world has been repeated the world over from time in memoriam Byzantium, Rome, Thebes, London, Constantinople (again), Washington, where will the next great empire rise, probably in the East.
Silicon Valley isn’t about only about silicon, or arranging zeros and ones in unique order to create useful applications, nor is it med-tech, bio-tech. It’s a diversified hub of innovation and entrepreneurship. Add Stanford and Berkeley to the mix and you get a sustainable environment for growth.Detroit was about 1 industry, 1 non-sustainable labor model, crappy weather. Latly the auto industry is a zero-sum game. If I buy a Toyota, it comes at the expense of Ford. If my use of Foursquare does not come at the expense of Apple or Oracle or Google.
I wonder if density is important. Silicon Valley is focused on a small geographical location surrounded by water. The interlinking mesh between companies, talent, finance etc is tight and small. This attracts those who want to be in it to come right to the heart of the ecosystem. It creates it’s own vortex which is self promoting. If all of the begetting companies were spread across California then it would have been less likely to have had the evident success. This bodes well for NYC. Mayor Bloomberg seems determined to create a fertile land for tech and with the cover of some large successes it seem probable it will work. My final comment is Mobile, i believe it dwarfs any cycle we have seen in life so far. Much of the world never received the combustion engine, electricity, radio or television, web1.0, 2.0 or even clean water but 5.2bn already have a mobile phone. Silicon Valley will do well to hold onto it’s lead in such an enormous category.
Hey,Fred,I’ve been reading your blog for quite a while and respect your opinion.I think this is the first time I comment though.You mentioned in your reply EE.Could you write a blog post or just give your thoughts which countries y
ou believe would provide better long-term opportunities for an 18-21 year old person than the US and why?Excuse me for the indented end of the reply,but had issues with my inet connection
One exogenous factor you don’t give enough attention to is capital. NYC had capital, but not the technologists before DoubleClick. The availability of capital pulls startups that were in other locations to new ones early in the life.To use one example, Arbor Networks was created by a professor at the University of Michigan. Because the VC was in Boston, the company headquarters was created in Chelmsford. To this day they still have a R & D facility in Ann Arbor, but I think mostly because the prof didn’t want to move.In the movie 2001: A Space Odyssey the computer HAL was built in Urbana (home of the University of Illinois). Several decades later that Andreeson fellow moved to Silicon Valley to build Netscape.
Silicon Valley is more like London, Paris and NYC than Detroit. I don’t see these places dying anytime soon. They will die when our civilization does.
It’s interesting to see you come back to the concept of golden ages, eras and patterns – it reminds me of Carlotta Perez – who you’ve mentioned a few times over the years.I think the next era will happen sooner and faster than we all expect. The 75 year cycle was driven by a variety of factors (speed of communication and access to information being just two of the bottlenecks). While we can now communicate at lightspeed almost any in the world – there are still real bottlenecks in society and business which draw out the adoption of any new technology.Venture Capital in its current form has only existed during the digital era. Do you think it can survive to finance the next era? Recent posts by Steve Blank lamenting the end of Silicon Valley make me wonder…
Yup. Carlota was running around in my mind as I finished this post. She has influenced me so much.I dont know if VC will be the dominant form of funding for the next revolution. Crowdfunding seems like it is coming on strong.
You should note what Start-up Chile is doing for Santiago as a hub, with only 40k x 500 = $25mm. I was just at a meet-up, discussing with a nascent VC working in the LatAm space about the opportunity in arbitraging the tremendous amount of talented and experienced people in Buenos Aires over to the Chile scene where a more accommodative business environment makes a scale-able business a real possibility. Meanwhile Dave McClure was answering an interview question about what should LatAm based start-ups do to attract American investors, saying that maybe they should be trying to elicit seed funding from local investors and build up a progression where more substantial investments can be sourced internationally.Well, it ain’t easy. How many cashed out entrepreneurs are there in LatAmm that would do early angel investments? If you exclude MercadoLibre veterans, I don’t know if I could count them on both hands. There was one VC fund in the space with US-based LPs, did not work out as far as I know, there is now another with LatAm-based LPs, and everyone’s looking to Corfo to fuel the next level of fund formation. It’s like stitching a quilt from capital imported from all over the region just to keep a few dozen families warm.Meanwhile, let’s examine Tel Aviv – tons of start-ups, a few exits from the 90s, plenty of tech people moving from Silicon Valley to Israel and providing early-stage capital. If only Santiago or Singapore had thousands of years of beautiful tradition from Moses to Sandy Kofax working on their behalf, their acceleration would be faster. Barring that, it seems like a relatively small amount of public money can go a long way to solicit relatively larger amounts of private money, and spark a fire.
Wences Casares is another latin entrepreneur/angel who has connections down there. I backed him and Marcos from MELI back in the mid 90s at the dawn of the Internet and to this day they are two of the best entrepreneurs I have ever worked with.
I left Austin because the startup scene is very much based on enterprise IT there, which isn’t really my bag. Now I am in San Francisco. I am envious of my friends moving to New York.NYC could really lead the charge for diversifying where apps are being made. Why? Because technology should feed off of other industries, and NYC has a lot of other industries that need technology. Too often Silicon Valley startups seem to make the next shiny new thing that will get the tech press going instead of something actual human beings will use and/or pay for. It baffles the mind.
Maybe it’s space that we head to next and take an unknown turn.Earth becomes Detroit!!
First it would be the people who build the spaceships, and they are hanging out on a playa in southern California…So maybe s. Cali will be it.
Darwin’s son, Horace, started the ball rolling here in Cambridge, UK in 1885 by founding the Cambridge Instrument company which started the whole Cambridge thing off which eventually gave the world ARM etc
That I didn’t know…wow…smart family
What goes around comes around.
You are right in so many ways, but the macro picture isn’t terribly relevant. Better to focus on the micro… better for NYC to have a mission statement of: build solid awesome tech companies one at a time… than to have: make NYC a great start up hub.
Fun way to look at this … and I would put HP before Fairchild.
I think that the idea that SV could become the next Detroit is way off mark…While most of us assume that Detroit was always this massive automobile hub that is not a true assumption and that the world always had nothing more than “The Big Three.”Here is a list of automobile companies that were thriving in 1910 but are now defunct: http://en.wikipedia.org/wik…There were lots of young people dreaming in those days to create the next big thing in travel, I am sure one of them even thought about spaceships and putting a man on the moon.As far as skill sets go, we can thank Ford for the concept of assembly lines and there was quite a bit of skill improvement over the years and quite a bit of the self taught kind.Honestly, it could be argued that consolidation killed the automobile industry because with consolidation you saw the strangulation of innovation. The whole concept of “hubs” may actually be the death of tech and innovation; just something to think about.There is no doubt that the automobile industry changed the world, and led to dramatic growth in a broad spectrum of industries. We have not seen the same “downstream” growth from tech.In fact we have seen a reduction in small companies and companies going public:http://www.economist.com/no…Personally, if I was in tech, I would want to learn from history and not create hubs (I mean why does everyone need to be physically close to each other in an industry that is based on the world wide web platform) and rather focus on a decentralized model for growth; history might actually tell you to be different to be successful.
Why do you think hubs kill innovation?
So essentially, it’s hub and spoke theory mixed in with dispersion of knowledge. Makes sense to me…I believe another driving force is behavior. The dark side to the transformation process is culture; how behaviors change once success is achieved. In part, I believe this is what makes the repeat so difficult for incumbents and why talent transports elsewhere.
One of my favorite posts ever on AVC!
I will use “begat” more often 🙂
🙂 for sure-and hopefully in the future I’ll give you a reason to!
Great story. What would the genealogy of other startup hubs in the world look like: London? Berlin? Istanbul? Tel Aviv? Bangalore? Sao Paulo?
The risk aspect you describe is interesting: semi-professional, wealthy investor-entrepreneurs with nothing to loose playing with ideas.No government-sponsored incubator or other policy initiative can match this.
Great story. I wonder what genealogies other Startup Hubs of the world have? London? Berlin? Istanbul? Tel Aviv? Moscow? Bangalore? Sao Paulo?
This is a keeper. Plenty of great history and study of NYC as a rich ecosystem.
Fred, perhaps it has to do with the nature of processing. The smartphone and app ecosystems are very communication and transaction rich and thinking/processing/creation poor. The Wintel phenomenon was built on silicon and processing moved to the edge where we did a lot of our thinking/processing/creation. With ubiquitous broadband we have seen processing collapse to the core (cloud). Transaction and communication rich industries (advertising, AT&T, Verizon, Lucent) are located on the east coast; specifically a lot in the tri-state area. So these are your legacy redwoods. Of course financial services (Wall Street) is a huge transaction business. The concept of NetJets derived from Goldman’s trading systems; and is now the basis for AirBnB, uber, etc… Every industry is going digital and the app ecosystems are leading the charge. I think other comments on this thread touched on this theme.
Amazing post. I’m curious if the next hub has to be a physical place. I think it does.It will also be interesting to see if the next hubs sprout up near universities.
Been reading this blog for a while now, and this is far and away my favourite post you have written, Fred.Mark Twain and all. Well done.
I’m a native east coaster currently working on a startup and *for* another startup out in LA. I fundamentally could not see myself taking the financial risks I’ve been able to take out here because of the quality of life difference.There’s something about the prospect of being broke being more palatable if you’re living on $3 fresh fish tacos and in the sunshine as opposed to beating a hard slog from your craptastic apartment in “East Williamsburg.”I love NYC and spent a good part of my first 5 years out of college there (working for other people). It’s probably a confluence of age, experiences and location. But I think that the pleasant lifestyle in California goes a long way.
there is no one best place. but there is a best place for everyone.
Why didn’t you mention the role of Stanford University?
i was not trying to be comprehensive and said so in the post.
First off, great piece. I love the narrative. One thing that I do wonder about is the impact of so many of today’s startups being pre-ordained for an acquisition by BigCo vs growing into big revenue-producing standalone cos.Obviously, it’s great for entrepreneurs and investors that a healthy M&A market exists, but I do wonder if the resulting ‘fertilizer’ that such an ecosystem produces provides the right kind of nutrients for subsequent waves of growth (in today’s hubs).I think that I know the answer, but to me it’s suggestive of how certain hubs can become more durable than others.
you hear a lot about “building for the quick flip” but the truth is our portfolio is full of companies building for the long haul. we’ve had one, maybe two, quick flips in the eight years we’ve been in business and that is over something like 45 portfolio companies
I think that perhaps I framed that wrong. It seems to me that in the past decade, and the decade before that, there were more upstarts chasing a path to profitability, whereas today, the ethos is more tilted to building a big network and not creating the “friction” that early monetization presents.I’m not suggesting that these companies are specifically built to be flipped, but rather that when the impetus is on getting big user adoption, that (potentially) changes the operational discipline in such companies.Plus, on the M&A side, it seems like there has been a hollowing out of the pool of great companies (HP, Cisco, AOL are a few that come to mind).It makes me think about how a Detroit scenario could play out, given the interplay between the two elements (i.e., upstarts and gorilla incumbents).
ah, got it
Not sure how the “auto revolution” is really indicative of what could happen in the valley. Auto companies in the US got hammered by foreign brands, initially by Japanese brands, and also by their unions. You are taking a set of workers who may not have a ton of education but are good at the set of skills they’ve been taught to do repeatedly, and then you are pretty much protecting and insuring their well being for life, regardless of whether or not their skill set evolves to meet changing market demands.The only similar comparison in the valley would be companies that develop hardware, but the valley learned long ago to ship manufacturing abroad.
What happens when technology moves far from the expertise of the original Fairchilders?That is phrased completely wrongly, but here in Vancouver we have had some Fairchild equivalents, however all of the tech and focus (and people & investments) have not translated to web / Internet businesses.Or perhaps it is the simple fact that there hasn’t been a big enough win locally?
awesome analysis.i love mark twain: reading “life on the mississippi” is living history. he made and lost several fortunes; his investments in printing press technology were the wrong horse but the right idea.the first boom in nyc had a lot to do with marketing and agencies, and the tech underneath them was often just enough to get things done. i remember sitting with dev teams and thinking of hacks to make things trackable because doubleclick hadn’t quite happened.this time is different.related: reading a william gibson collection of nonfiction/essays/interviews, wherein he notes that he wrote neuromancer just before cellphones became ubiquitous, and the plot would have been completely different just a short time later because of that.think about it: how many 19th century novels turn on waiting for a letter.
Hey now, Detroit is making a comeback in auto and tech. We have many startups making their bones here in the city. http://www.ondeq.com is among many startups here in Detroit and planning on staying here. Detroit is filled with many talented and passionate people.
Great write up! Would like to see your thoughts as applied to Seattle. I noticed it wasn’t mentioned and curious more than anything else.
I’m a few days late on this one, and I’m a bit disappointed about that. This was a solid post.
Nice to see the background behind the Paypal mafia 😉
I have noticed some very distinct differences between what I read about Silicon Valley VCs and NY VCs. Perhaps this is due to what you describe as different stages in evolution. Human systems clearly evolve, and just like biological system they can evolve into systems that have a negative impact on their host.Any system that is around long enough becomes subject to “gaming”. The original purpose of the system becomes subjugated, as those in the system learn how to maximize their upside, without regard to the larger host environment.It seems to me that Silicon Valley has advanced way into this “Gaming” Stage. How else do you make sense of some of the bizarre things you hear coming out of Silicon Valley VC’s and startups?Common wisdom imparted to startups from their SV VC’s includes such things as “Don’t make any money.” Because if you make any money, then we can’t make up how much your startup is worth”. I understand the reasoning, but it still smells bad.Then there is the way they talk about their culture. It appears to be common for startups to refer to their connections to the various VC groups as being “Mobbed Up”. As in “They got all mobbed up with the Pay Pal Mafia”. Really? You use organized crime metaphors to describe your system. This doesn’t make the rest of us feel good about you.And now of course we have the Facebook IPO. The whole chain of events from the buying of Instagram to the unequal distribution of information prior to the IPO, just smacks of gaming. It sure looks like a pump and dump.Is it just me or is this kind of wackiness centered in Silicon Valley? And we don’t see it as much from other less “evolved” VC hubs?If so then I would rather go with a less evolved hub, if I ever had the chance to pitch an idea. ( not likely ).
VCs can be awful just like any other group of business people
Agreed.My point is that there seems to be a correlation between the amount of “awful” behavior coming out of a Startup Hub how long it has been around.
maybe the correlation is to the oversupply of VCs not the age of the ecosystem
OK, I will buy that. Of course an older ecosystem is likely to have more VCs. But the you could have a lot of VC’s piling into a young ecosystem.
Wow you made that sound really simple. I live in Boston and really need to do some reading as to how the tech scene got started here. I know there were many important companies started out on the 128 belt that led to the current batch of startups, but those precursors predate me by a lot.
it is important to know that you are playing musical chairs. because you need to know what to do when the music stops.
reading on the subject of media ecology, i arrive at a different conclusion with regards to the web
you mean what about media ecology makes me think… the informal layer is still nascent. vast improvements can be made in multiple directions.one such idea is the driving of innovation through the improvement of the visual. vision is the highest sense–you can’t do mathematics with touch or taste. new devices that allow greater visual representation open up new possibility.there’s a lack of appreciation of the effect that media has on people–to the core of being human. mindsets such as ‘advertising doesn’t effect me’ are pervasive. what people don’t conceive they don’t perceive.
that sounds like the 1950s car industry! i was trying to get at a shift of what it fundamentally means to be human and our experience of opening to the world. there’s more innovation left. it’s not an empty tank–to use a auto metaphor.and if there’s more innovation, then there’s opportunity for abnormal returns a la Schumpeter
if they recognize it as such. microsoft on the internet, google with social etc. it’s hard to predict the future, thankfully.