And spawning Valleys all over the world
Last week, a late-night Twitter conversation with Marc Andreesen and Dave McClure got me thinking about the future of Silicon Valley in a different way.
The perennial “future-of-the-Valley” debate isn’t a new one. Nor is it surprising that a community preoccupied with building the future is curious about how the entrepreneurial world map will be redrawn in years to come. Will the Bay Area remain the mecca of modern tech entrepreneurship? Or will replica Silicon Valleys sprout up in cities like Singapore, Moscow and Tel Aviv that eventually reach parity? In short, will the future of the Valley be a story of continued consolidation or one of global diffusion?
I’ve always been in the camp that’s long on Silicon Valley—not just as a physical space for entrepreneurs but a mental one that values putting big dents in the universe. The ecosystem here is both complex and self-reinforcing, and each component—the Stanfords, Googles, Wilson Sonsinis, weather and natural beauty—would individually be so difficult to replicate that copying the entire package would be nearly impossible, akin to building a man-made Mount Everest in the desert and convincing the best climbers in the world to abandon the original and come scale Ever-esque.
How the full-stack marketer breaks the rules to get started
Most startup projects fail because they never even get off the ground. Ideas stay in the brainstorming phase on the back of napkins and never make it to the actually-talking-to-prospective-customers phase, which is the critical moment when a startup takes its first breaths of life.
Let’s get a few things straight.
• You don’t need a technical cofounder to start talking to prospective customers about your idea. In fact, what good is someone who talks to computers and writes code all day going to be in talking to people.Talking to people is your job; get used to it.
• There is never a “good time” to start working on your startup. You can wait for things to ease up at work or to be done with school and before you know it you’re married with kids, sitting in a cubicle talking to your coworkers about how you once had this great idea. Lame.
• No one cares about your idea. Literally no one, except maybe you, cares about your idea.Your belief that someone is going to steal your idea is an illusion based upon the bias of your own perspective. Besides, ideas are completely worthless. Execution is what matters.
How entrepreneurs “drill” their way to success
The most precious asset any entrepreneur has is time.
Because time is constantly slipping away, one of the most basic entrepreneurial dilemmas is knowing when to pivot and when to persevere. When to take flight and when to keep fighting.
Like an oil prospector in search of his first strike, an entrepreneur traverses the dangerous terrain of rapidly shifting markets to find elusive black gold. You never know whether you’re meters away from hitting the lucrative depths of product-market fit or whether you should pack up your rig and find another spot to set up camp.
Great companies, however, aren’t built on pivots or perseverance, but on insights. Mark Zuckerberg’s decision to build Facebook wasn’t based on a conscious decision to pivot or persevere but instead on a core insight into a human behavior that could be ported to the Internet. Similarly, an oil prospector chooses when to keep drilling and when to give up based upon the insights and clues he collects along the way: that rock formation looks suspect, these deposits look promising, that river seems to have moved.
Turning real-world locations into personal sensors
When I was a kid, I remember reading books that depicted the future. Everything was taken care of for you by technology and no one had to work very hard because robots subsidized human productivity.
That second part turned out to be total bullshit, but in the waning months of 2013 it’s starting to feel like we do in fact live in the future. What I mean is that technology is starting to do more and more of the heavy lifting for us, which is ironic given that modern-day humans work more hours for less pay than their 20th century predecessors.
But we can’t really complain. Gold miners in the 1840s couldn’t push a button on their smart phones and have a horse drawn carriage pull up minutes later. Italian merchants in Renaissance markets couldn’t exchange gold bullion instantly with tiny plastic squares. File storage for Alexander the Great meant building a 100,000 square foot stone library in Alexandria to house hundreds of thousands of scrolls.
We work like dogs but live better than the Kings of England or Pharoahs of Egypt ever could have imagined.
At the push of the button we can get almost anything we want.
Why big companies get slayed by startups
It’s a paradoxical yet persistant truth in Silicon Valley that innovation is almost exclusively a biproduct of small, scrappy startups, not large public corporations.
It may seem counterintuitive that disruption and headcount would have an opposite relationship. You would think that amassing an army of thousands of employees would give you more leverage in this digital Game of Thrones, but business parks across North America are strewn with the carcasses of megacorporations that have been killed off or irrevocably maimed because they thought the clock would never run out on them (Kodak, Blockbuster, AOL, Motorola, RIM, Sun, Sony).
There are some obvious exceptions (Apple), but as a general rule bureaucratic inertia at large companies gets channeled into a death grip on the status quo, not big bets for the future.
Like the power law of distribution, innovation in the technology space follows a sort of inverted 80-20 rule (also known as the Pareto Principle) where the top 20 percent of startups like Square, Uber and Dropbox generate 80 percent of the innovation and the largest 20 percent of corporations like Samsung, Yahoo and HP mount 80 percent of the obstruction to that innovation through activities masquerading as progress, like patent lawsuits, government lobbying and acqui-hiring youthful competitors.
A shifting consensus around what a “seller” founder looks like
It is often said that there is an engineering bias in Silicon Valley, but in reality, it’s a bias towards doers over talkers, of execution over ideas.
This is why you’ll frequently here the refrain that MBAs make bad startup founders, because MBAs are oriented towards administration and management (talking) over designing, programming and growth hacking (doing).
That doesn’t, however, mean that engineers always make the best startup founders either. While it’s next to impossible to imagine a great founding team that doesn’t have at least one engineer, increasingly, it’s becoming just as hard to imagine a great founding team that is comprised solely of engineers.
You can visualize the requisite skill set for a founding team as a pendulum that swings over time depending on the macro-circumstances. Twenty years ago, the technical costs of building a product were so enormous, that it made sense to stack your team with engineers and figure out your business later after you’d raised your $20 million A round; to load up on business guys prematurely would have been putting the cart before the horse. When Silicon Valley got overheated in the late 90s, VCs were writing checks for business plans with no product, so all the business guys wanted to start companies too—and we all know how that worked out.
Impatience turns wantrepreneurs into hackers, designers and programmers that focus on execution instead of just ideas
It is often said that patience is a virtue. And sometimes it is.
The best time for patience is when you don’t have control. If you’re waiting in line at the DMV to renew your license or stuck in rush-hour traffic on the 101, no amount of impatience is going to change things for the better. In these cases, impatience is counterproductive because the stress-induced cortisol shooting through your veins will inevitably grind you down and make it harder to fight the battles that actually matter. It’s better to keep your powder dry.
In the world of entrepreneurship and startups, these same rules don’t apply. When you’re building a startup, there are a lot of things you don’t have control over: timing, the market, your competitors, the macro-economy. These forces are so powerful that they can overwhelm great products and great teams like a giant wave that capsizes a tiny boat. Building a company (at the risk of mixing too many metaphors) is like a game of three-dimensional chess that never really ends - and you’re constantly dancing on the edge of glory and failure. The only thing you have control over is yourself, and in this persistant battle to create something from nothing, impatience is your friend.
The ascendancy of libertarianism in Silicon Valley
The average American looks to the West and assumes that Northern California is populated by roving packs of Prius-driving, weed-farming, granola-eating, deodorant-despising, left-wing Marxists.
For certain pockets of the Bay Area—Berkeley comes to mind—this is probably a fairly accurate description. But when it comes to Silicon Valley and the tech community more broadly, the political sentiment here is not so easily put into a left-right, Republican-Democrat box.
In fact, over the last few years, I’ve seen something much different happening here—a rising tide of libertarianism in a community that is increasingly taking on the mantle of ethical capitalism, free-markets, civil liberties, limited government and personal responsibility.
Silicon Valley’s political reawakening and realignment away from the two major parties towards a philosophy of economic liberty and social tolerance has come not a moment too soon, at a time when crony capitalism is at an all time high (Solyndra), faith in government is at an all time low (11% Congressional approval rating), the economy is in a sluggish state of perpetual malaise (2% GDP growth) and civil liberties are being eliminated at the stroke of politicians’ pens (NSA Prism).
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