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Renaissance Florence Was a Better Model for Innovation Than Silicon Valley Is (hbr.org)
172 points by adamnemecek on Jan 25, 2016 | hide | past | favorite | 41 comments

It's an interesting article. There's certainly a lot of untapped talent out there doing relatively menial work when they've shown capability to do very different and more effective things. Sponsoring such people or just being more likely to hire them could bring benefits. Well, it's already been proven by the companies doing it while reaping those benefits. Plus the occasional academic team asking for funding on something that might be a game-changer and is to some degree. So, we need more of it.

That said, the author is wrong about the title and doesn't get Silicon Valley. Most don't because they don't know the historical context of how it became what it is. If you want to re-create or beat it, you have to either imitate or improve on the components that went into creating it. This is the best article I've seen summarizing the big picture of how Silicon Valley came to be:


Note: I bet many people didn't think Zuckerberg and others paid visits to the old guard to learn old lessons for IT. Probably thought it was all modern, fresh thinking "disrupting" the old stuff. A mix as usual. ;)

I think there is some selection bias going on here.

I am not sure about Jobs but it seems like Zuckerberg had already founded Facebook before he met with the old timer. So he was already onto something.

On another note I must say that although the phrase "to invent the future you must understand the past" (another popular phrase is; "Those who don't understand history are doomed to repeat it") I don't believe it's true. In fact Silicon Valley is the perfect example of why this is not the case.

At least from all the things I have bean reading up on, with regards to the history of Silicon Valley it started because of some demands for computing power and was cemented with the semiconductor which then ended up creating the real reason why Silicon Valley kept attracting talent. (you could probably go even further back and claim that the "Manhattan Project" was as important for SV too.

So the "real" reason SV was popular was because a lot of factors went into place none of them by design.

In other words. You can't design a silicon valley because it wasn't designed to begin with. It evolved from a number of factors and "after the fact realizations" which are not possible to copy.

And so whatever becomes the new SV will not be designed either, it will evolve when the right circumstances allow for it.

"In other words. You can't design a silicon valley because it wasn't designed to begin with. It evolved from a number of factors and "after the fact realizations" which are not possible to copy."

I'll agree with that. Far as the past, there were lessons being created every step of the way for future efforts to learn from. Certainly there's going to be plenty of new things in an area focused on creating new things. Obvious. There are old things that apply, though.

We even see Silicon Valley founders trying to draw from past lessons and successes as they create and grow their companies. That's smart of them. Those trying to re-create or exceed Silicon Valley aren't playing it as smart as they leave off components from its past. The Strategic Computing Initiative, DARPA, government contracts... lots of public investment in many creative teams in physical proximity happened. In parallel, we had the various booms going on in the private sector on both VC and demand side creating all kinds of companies and experience. On top of it, all these new people and developments like Y Combinator.

Silicon Valley emerges and is sustained from all of this. Probably more factors I haven't even mentioned. A lot of components to copy that the copycats either aren't copying or can't.

There are definitely lots of lessons and it at least help explain why it doesnt work other places.

For instance I tried that to explain Europes problems http://000fff.org/why-is-europe-failing-to-create-more-unico... based on various lessons that IMO factors in.

IMO it all boils down to being able to create the right environment where it can happen in rather than to try and create it or even kickstart it.

Yes, actually Facebook started to grow with east-coast VCs, already had some success before they got Silicon Valley investors to go to the next step (because east coast VCs weren't used to the SV amount of money). And obviously, moving to SV was a condition.

That fits in with my theme a bit. These people presumably had the business experience Zuckerberg lacked. They get it started. Then, SV grows it huge. Then, most people forget about east coast VC's and it's merely a "Silicon Valley success story."

Revisionist history. Gotta love it. :)

Peter Thiel was their lead angel investor, and Accel led their Series A funding. Both are Silicon Valley investors.

Enjoyed the article, thanks. For those who like trivia: bit of history at the current shopping center construction site around San Antonio Rd.

"Demolition has already begun on a row of buildings along San Antonio Road, including the International Halal Market and the Barron Park Plumbing Supply sites. The unassuming-looking market was the former site of Shockley Semiconductor a seminal, albeit unsuccessful, business credited with kicking off the silicon chip industry in the South Bay and considered by many to be the true birthplace of Silicon Valley. As of now, the only mark left of the former building is a signpost mounted years ago summarizing the history of the Shockley site.

As part of their plans, Geiser said the finished development would include a variety of silicon-transistor-themed artwork as well as a plaque and photos to commemorate the Shockley building. (http://www.paloaltoonline.com/news/2015/06/01/big-changes-af...)

Bonus: progression of the building over the years:

1. https://videogamehistorian.files.wordpress.com/2014/09/12sho...

2. http://telco.lk/wp-content/uploads/2013/10/Silicon-Valley-Ro...

3. http://i0.wp.com/siliconvalley.town/wp-content/uploads/2015/...

>Note: I bet many people didn't think Zuckerberg and others paid visits to the old guard to learn old lessons for IT

I see a couple of anecdotes, not a recipe for success, or even a pattern.

I agree that Silicon Valley arose from magic (or luck), and that it can't be recreated. But it doesn't need to be. The Valley will lose influence for precisely the reason it claims strength in the article; money and computer software can move anywhere, now more than ever. And mobility is increasing fast.

Technology development is diffusing, globally. Believe it or not, many people have cultural roots and don't want to leave their home town...or country. SV is still highly influential, but that will wane over time.

Magic? Luck? Or just plain old government money? ... In fact, he says, before there was was Silicon Valley, there was Microwave Valley, which specialized in electronic intelligence—spying on Soviets air defenses, basically—and the seed capital for it came exclusively from the CIA and military. Private capital arrived much later.

At one point, says Blank, the institutions of the Valley were so totally in the pocket of the Department of Defense that Stanford became essentially a research lab for the CIA. A number of engineering Ph. D. theses were actually classified. The largest employer at the time—and still the third largest for-profit employer in the valley is not Google, and certainly not Facebook. It’s Lockheed Martin." http://www.inc.com/eric-schurenberg/inconvenient-history-of-...

Is this correct?

There was a ton of government work over there. Many tech in the U.S. are also funded with DARPA, NSF, etc. By the time it hits press, the involvement of U.S. government or academia is usually minimized if we're talking a product rather than research result.

Anyway, this great (and long...) book will give you an idea just how much the U.S. government (esp defense) funded our computing advances back in the day. A chunk of that probably went to Silicon Valley, too.


First off: screw Silicon Valley. Using this as a label for the whole tech scene really has to stop.

Second off: I really like the patronage idea. It feels horribly unfair if you are NOT included, which is why it can't last in many places, but back around 2006 or so I joined Red Hat and we had the "Emerging Technologies Group" (now defunct).

Basically, our group was told to go make systems management applications that made people's life easier. No plan on commercailing, and we barely conferred with each other but every 6 months or so. It was pretty amazing.

Cobbler and Func came out of that, and eventually I was able to get more involved with OSS than most people do, and that led to a lot of other things later on down the line (like Ansible).

I think it's a really cool idea to just find some smart people, vaguely wave at a problem, say, "go make these users really happy" with very few parameters and see what happens.

I also believe in companies with a really strong vision of what they want to build, but what we miss is that some of our best designers are also the builders, and when we get one person designing and hundreds of people building, we can possibly get bloat and a bunch of untapped creative potential.

The theory of the 80/20 time, that I hear seems to be a myth, is a step in the right direction.

I disagree with the article. Basically what it's implying is that we should stop giving small amounts of funding to many talented people and, instead, give large amounts of funding to few geniuses.

The problem with this is that you can't know who is a genius before you invest. Was Steve Jobs obviously a "Genius" before he started Apple? No. Even after running Apple for a few years, he was fired because some important people saw him as incompetent (I.e. Not a genius). It took many years before he was able to prove himself.

If investors started spending more on fewer people, it would mean that fewer "geniuses" would be discovered.

If anything, I think Silicon Valley is too much like Florence; VCs are pouring billions into unicorns headed by so called "geniuses" while depraving unknown geniuses the ability to prove themselves on the market.

Also, I think during he renaissance, very smart/talented people would have stood out from the crowd. If you go to SV, smart people are everywhere, it's even harder to identify genius in such an environment.

If you can't identify the geniuses but you think that they (whoever they are) need lots of free time to succeed, you can just select people randomly.

Yes, I think it would work better that way. Just think of Uber; they raised $8 billion.

With that kind of money, we could have funded 100K small startups for 1 year ($80K each). That's a lot of startups!

I think funding fewer companies with more money is a good short-term strategy (in terms of buying competitive advantage) but not good in the long-run.

I don't think Uber will be able to maintain a monopoly once the hype dies down. Once the hype has faded, competitors will come up and eat into Uber's business - For example, Google, Tesla and Apple might all have their own dedicated networks of self-driving cars to drive people around and Uber may become redundant.

Uber's valuation would deflate and most of those $8 billion would have been wasted.

I wonder everyday why they don't have more competition. I won't be back, and don't need a long lecture, but it just seems like a service begging for competition?

I think they are missing a large demographic. There are people like myself, who don't care about style, or the newness of a vechicle. I just want to get there, at a reasonable price. Yes, safety is important, but older cars are safe if maintained. Hell, drive me anywhere in a old collector's car--with tons of metal?

Rent a Wreck was a popular business in the stone ages. People just needed cheap transportation. I honestly don't care about what a car looks like. I'm not marrying it.

I suspect with UberX you've already reached the point where you're not going to cut costs much by going any further downscale. There are things to criticize about Uber but "their prices are high because the cars are too nice" probably isn't one of them.

Rent a Wreck is still around and I know people who use them on a regular basis.

The article makes many points but I agree with what you say as well. Hopefully with the SEC relaxing the crowdfunding rules funding will become more spread out.

The apprenticeship system is something I have long advocated and think it is a much better system than today's college system. Your experience is actually in the field instead of being more academic. Why pay huge amounts of money and go into student loan debt? It would be much better for the apprentice to have free education and for the company to have free labor. It's a win/win.

Who pays for the education in the UK there used to be training taxes to pay for technical training cant see sv or the USA going for that

Under the apprenticeship model an apprentice agrees to work under a master/company for free (and then maybe for low wage as he becomes more skilled). Traditionally, it was a 7 year contract. Taxes are not necessary under that model. The education is provided in exchange for work. Work that gives you experience and helps you build mastery in the field.

Apprenticeship model can produce very good result. It is a one-to-one instruction and instructor has real world experience to pass on with all the technical knowledge. The advantage of this type of education can be illustrated by the Bloom's 2 sigma problem: https://en.wikipedia.org/wiki/Bloom%27s_2_Sigma_Problem

For the innovation to hit critical mass, do we have to survive a black plague, or will any large devastating event do?

Kidding aside, I wonder how hard it was to break in to the innovative trades without a politically connected benefactor (or be born in to it). This far out historically, we mainly hear the success stories and rarely the failures to which I expect were many and tragic.

There are periodic "devastating" events in the valley, maybe not quite as bad but there is a boom-bust cycle in the valley does something similar.

The selection bias for positive outcomes is pervasive. There were many, many apprentices working for guys like Verocchio, and pretty much the only one we know of is Da Vinci.

That said, just because you only hear of the analogies to Jobs/Woz, Ellison, Page/Brin, Gates, Zuckerberg, doesn't mean there weren't plenty of quite successful individuals. Likely, their work was lost as it wasn't of enough lasting value to survive the political and socioeconomic upheaval of a half-millenium, but I want to believe some merely-very-good people did well. Sadly there's no real way to tell...

First sentence reminded me of: https://www.youtube.com/watch?v=nyuJQ_UO7OE


I am not so sure this is a fair comparison. One thing I think it lacks is patronage competitors (and thus competition).

The article seemed to indicate (unwillingly) that it was a unique combination of non-reproducible scenarios i.e. talent and talent scout. It's not like there weren't other places with other talent and patrons.

Also SV teaches us the exact opposite since it didn't start with a city with lots of money and lots of patrons (they came over time)

I think a much more likely explanation is the same that spur many other sudden sparks excellence within a short time and geographic location and that is. Some sort of right combination of progress in a number of fields, the availability of money and a fairly progressive time in history in that area.

I.e. luck more than anything else. (Just like nation building btw)

Aren't Angels, Seed focused VCs and incubators essentially patrons? In many ways the modern patron of the arts is the Angel investor funding technological arts that may never become viable businesses.

They take what they fund. Also, when patents are involved, the big company that ends up acquiring it often uses it to discourage innovation outside their company. So, quite different from a patron model in practice due to incentives.

Now, this doesn't stop a company or VC from acting like a patron. We've seen a number of them release open-source software, publish papers on working strategy/tech, sponsor R&D that is similarly public, and so on. I'm not sure what the percentage is but it shows the models aren't exclusive. It's just the incentives shift VC stuff far in another direction from Da Vinci or Michelangos making goods for the public. Really far per some billionaires. ;)

That's a really optimistic view of a patron, patrons purchased or owned much of the work they helped create. That was the point of being a patron.

I havent really studied the concept much. People talk like it was charity or something. Thanks for correction.

It varied from patron to patron similar to how it varies VC to VC. Some would directly commission work, others would work to establish connections with people who would commission work, and to some it was similar to being on retainer.


I don't know if I agree with the author's thesis (haven't thought enough about it yet) but the comparison seems fascinating regardless. The very first thing that occurred to me was that, while patronage is a central feature of both systems, in Florence it was out in the open while in Silicon Valley it's obfuscated behind a layer of arbitrageurs. Not really sure why anyone would consider that an improvement, either in terms of being less transparent or of having yet another party between the creators and the profit from their work.

Presumably arbitrageurs would consider any increased arbitrage opportunities as an improvement. Everyone else would probably see it as theft (though an arbitrageur would probably spin it as increasing everyone's wealth).

"The city’s Renaissance blossomed only a few decades after the Black Death decimated the city, and in part because of it. Horrible as it was, the plague shook up the rigid social order, and that new fluidity led directly to artistic and intellectual revolution."

This may be only a small part of the reason. One of the Renaissance's most important cause was the fall of the Eastern Roman Empire. The extraordinary people flee to established centers, and at the time of its decline Byzantium enjoyed a great cultural blossom. Constantinople was a oasis of art and culture throughout the dark age, and only after Constantinople's fall under Ottoman Empire the European art and culture had no more that established place to coalesce to and thus was forced to blossom somewhere else. In the same way today's copycat entrepreneurial centers can not truly blossom until SF looses its name and appeal.

There's no doubt that people of means need to invest more in general, not specifically in talented individuals. There are trillions of dollars being horded and even a fraction of that could enable an extraordinary increase in invention and discovery.

I've actually wondered if ancient patronage systems would be better than Hollywood and other entertainment industries, that give power to studios and highly-profitable producers.

Need a hybrid for several reasons: marketing/sales; logistics; lobbying Washington against what undermines legal protections. The non-greedy things entertainment industry does that benefits industry and artists. I'm not sure what that model would look like as I don't know the industry well enough.

I'm not sure I would prefer the bad taste of an individual to the bad taste of the masses. The bad taste of the masses is at least more democratic.

This article reminds me how many time Europe has had to rebuild or reconstruct in the recent 500+ years. Rebuilding forces societies to start from scratch and think of new methods/alternatives.

Does anyone know if South Asian cities have had similar forced rebuilding efforts? I don't think they have. Natural disasters have not level-ed a city. War/Invasions have lead to attackers being assimilated.

What got Silicon Valley going is clear -- aerospace for US national security and NASA. That was it.

IMHO, the article:

(1) Neglects how much of what caused and/or enabled Silicon Valley really happened and still happens outside of Silicon Valley, e.g. Bell Labs in NJ, IBM near Poughkeepsie, NY, and in Boca Raton, Florida, Microsoft in Redmond, WA, US DoD, NASA, and DARPA in DC, CERN in Switzerland, and Linux wherever.

(2) Overestimates the role of Ph.D. holders in nearly all of the financial successes of the companies in Silicon Valley based heavily on software.

(3) Greatly underestimates the importance for economic productivity of the main uses of the work of Silicon Valley, (A) document preparation that got rid of typewriters, paper spreadsheets, and graph paper and (B) digital communications.

(4) For the last 20 years or so of Silicon Valley, overestimates the role of originality as illustrated in Renaissance Florence, Italy.

How Silicon Valley Did Get Started:

US aerospace needed a rapidly flowing ocean of electronics that desperately needed digital signal processing from transistors, integrated circuits, and microprocessors instead of analog signal processing from vacuum tubes.

So, aerospace was constantly just screaming for many multiples of more, smaller, faster, lower power transistors. Make a little progress in that direction, and US aerospace would buy, cost no object. So, desperate customers, deep pockets, wanting, in one word, more, and cost no object.

Before WWII, Bell knew very well that they needed an electronic amplifier better than vacuum tubes and started the research on a solid state amplifier. WWII delayed the work, but just after the war we had transistors -- Bell gave it to the world.

Soon the needs of US aerospace from the Korean War, the Viet Nam War, the Cold War, and the space race and the huge flows of US Federal money got us Silicon Valley and microprocessors. The key background was solid state physics.

Then, with microprocessors, could attack that huge time waste in the offices -- word processing or document preparation. The waste was enormous. So, a PC, some word processing software, and a printer would totally blow away any and all typewriters and did. Presto, bingo, we got the IBM PC, Intel, Microsoft, Apple, Lotus, Adobe, Seagate, Western Digital, Gateway, Dell, etc. Right -- document preparation.

Then, dialing phone numbers, with some phone modems, already available for selected high end needs, got us bulletin board software, AOL, and a start on social media.

Then put the TCP/IP stack from BSD into Windows, and, again, presto, bingo, got the explosion of the commercial Internet to replace dial up connections.

Then Tim Berners-Lee, at CERN wanted a word processing mark-up language to ease writing newsletters for the particle physics community to be distributed over the Internet, then common at research institutions, and we got HTTP and HTML.

To read the HTTP and HTML, we got Web browsers. We're talking just a simple word processing markup language of which by then there maybe a dozen popular ones and many dozens more. So, we got Web browsers for Windows, etc.

Then soon nearly every organization in the world wanted a Web site if only as an electronic replacement for a paper brochure.

Then there got to be a lot of Web sites and a need to let people find what they would like -- we got Yahoo and, then, Google. We needed IP routers, and Cisco got rich.

People wanted to interact with others, and we got social media and Facebook.

Meanwhile, we made great progress in the infrastructure. Especially, Bell Labs to the rescue again -- GaAlAs heterojunction solid state lasers and optical fibers for the data rates needed by the Internet backbone.

We needed, and slowly got, much more and better infrastructure -- data communications, data storage, processors, main memories, BIOS features, virtual machine software, operating systems, programming languages, disk file systems, and database software, and security borrowing heavily from the history on mainframes, lots of hardware communications standards, and, then, the great miniaturization of mobile devices.

Then we got a lot more in on-line shopping, information, news, video, etc.

So, Bell Labs gave us transistors; US aerospace gave us microprocessors; the mainframe history gave us infrastructure software; DARPA gave us the Internet; Bell Labs gave us the optical fibers to carry the Internet data; and here we are.

We might pour a little cold water on the hype about Silicon Valley with two points:

(1) As from Kauffman in


and from AVC in


on average, the VC returns have been poor.

(2) We get another Microsoft, Cisco, Apple, Google, or Facebook only a few times each 10 years.

Okay, but, now what?

Maybe next year the world will say, "Silicon Valley, what have you done for me lately?".

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