Silicon Valley is going to be difficult to displace for the same reason Facebook is difficult to displace - the network effect. Companies come to the SF bay area looking for talent, and talent comes looking for jobs. You can start your company somewhere far cheaper (an nicer, IMO), but people who are used to switching jobs every 18 months are going to be a hard sell on relocation.
Texas does have UT, TAMU etc. Maybe we need a couple of mega successful home-grown startups. Or perhaps the different tech companies starting up offices in Austin will create the density of engineers to reach that critical level where startups can find all the talent they need locally. I have a feeling it won't be the same path that SV took though.
I mean you can create a drink today and call it "sien cola", that does not mean you are going to sell a 100 million bottles per day tomorrow as a result of your "awesome" marketing strategy.
Why does everyone call their startup scene silicon something ?
It's like Bollywood which is not going to compete with Hollywood just because it has the same name. Or these Chinese companies which brand their phone "Appel" or their car "Felali". They are not going to compete with Apple and Ferrari.
I may be wrong, but I don't think this strategy works.
Among different companies in Austin: Apple, Amazon, Dropbox, Cloudfare, Twitch, Facebook (not engineering though...sigh), Blizzard, EA, Intel, ARM, Samsung ... I can go on, but I think I've made my point.
Is Austin really that successful from a tech standpoint? Which major companies and startups are based there? Which ones have large offices?
The "next silicon valley" will be wherever a high percentage of extremely talented young adults congregate and collaborate and have access to resources necessary to grow a company. Being able to download a lot of stuff really fast isn't really a necessary condition for that, even if it helps.
This is absolutely a fundamental reason: higher educational system. Atlanta (maybe Texas) is the South's version of SV and it has Georgia Tech, Emory, and others. If a municipality wants to be a top tech city, it needs the colleges and universities to support that.
It's hard to explain how it feels for me, when I get to the Bay Area. Being able to talk to like-minded people, not feeling like an out-of-place weird nerd like I do at home. It's no coincidence that I made most of my friends out there.
And anybody I've met that generally wants to "emulate" SV elsewhere generally has entirely the wrong mindset — trying to copy (badly) the investment style, their view / the mainstream media view of "startup culture", etc; it's completely misguided.
Admittedly, California has a little bit of that going for itself.
1) California is naturally aspirational, it's 'quirky' and the place that people have gone to 'escape' classical norms for a few centuries now.
2) The weather is amazing.
3) It's in the USA = a market big enough to support anything to start, before international expansion. Almost nowhere else can do that. Think Sweden: you have to go 'very international' and deal with many cultures/languages to get going.
4) Standford/Berkley - almost the perfect mix of both public and private ethos in the same spot. I'm not for or against either, but both systems have advantages. Also proximity to other pretty good schools.
5) SF artistic culture + VC culture + Tech culture - I would argue all are needed, and it just happened to be there before, and now they have a mass in all three. Granted, the art-vibe is dwindling.
6) Money - another thing that comes from both US scale and capitalist culture, that doesn't exist most other places. Rich people write big Angel cheques and take risks like few other places.
It's crazy to try to 'reproduce' the Valley elsewhere - it's best to focus on things that regions have as an advantage.
Canadians are not the most capitalist/lean-in people (I know this, I am one), and we don't fare well on R&D spending etc. But - the Oil Sands are almost unique to Canada, and developing around that are tons of relevant mini-innovations and side industries. (Eco-issues aside, but even then - some eco-innovations as well).
Montreal has a huge 'creative community' that they don't leverage well enough.
Sweden has a specific kind of culture that has lent well to their exports and innovations espcially in Music. They are a world powerhouse in pop-music ... Spotify should be no surprise.
When industries are related, or if there is a 'key advantage' somewhere in the core, then other, related inustries can leverage that.
'Critical masses' happens when there is some kind of relationship between the various companies.
Trying to 'just make startups' wherein there is no synergy between entities is not a good strategy.
Is this still the case? I could sort of see this in the 60s, but present day, living in the bay area it feels pretty home-owner-associationy. In Oregon in the city we had neighbors who performed a ritual pagan goat sacrifice in their back yard -- I kind of don't see that flying in Palo Alto.
Palo Alto I don't think has ever been quirky.
But yes - maybe Portland is the new SF :)
- A critical density of engineers as a percentage of the population. Few places have as many engineers per capita as Silicon Valley but in the places that do it drives the dynamics of the culture (e.g. Seattle).
- Strong lack of risk aversion. This I would argue is Silicon Valley's most unique trait. When combined with its other traits, good things happen.
- High average wealth above some threshold that is well distributed in the local population. Again, there are a few cities such as Seattle that meet this criterion but they are not common. It may merely be a correlation with engineer density.
This is what led me to move to Seattle six years ago after many, many years in Silicon Valley. Seattle (relatively) is more risk averse but it also lacks many other pathologies while having the other critical ingredients (engineers and ambient money) in spades. With the number of Silicon Valley (and New York City) people that I know that have moved to Seattle, I am seeing even the risk averse aspect change over time.
TL;DR: It took decades, spanning back to defense spending in the 1950s and included advances such as radar, ICs, PCs, & the internet.
Growing the company after that is somewhat problematic, as one needs engineers, marketers, business developers and recruiters in rather large quantities. A company that's growing from 100 to 1,000 employees will have to resort to importing such people from Silicon Valley, but what would motivate those people to move?
Some can be attracted by the premise of cheaper housing, better schools, easier commute or, as the article suggests, faster Internet. But they also have to consider the risks of
* lost opportunity cost (a rapidly-growing rocketship startup shows up in 2 or 3 years, eyeing this exact engineer, and is most likely to be located in SV, not in Topeka)
* spousal unemployment
* lack of fallback scenarios for layoffs, team/manager mismatch or just plain burn-out, where you happen to work for the only major tech employer in town
With that said, Snap managed to grow from 0 to 1,500 employees in LA, and I'm sure there are some NY companies in the same league, so things are possible.
* There are technically other service providers, but they are not competitive if you want more than 20Mbps of throughput.
Hard to replicate a culture of early adoption and willingness to try new things.
Just as comments below say, it takes more than having wide spread fast Internet access to be able to replicate the SV. It also takes more than having access to cheap HW components. It also takes more than having access to dirt cheap computer programmers. That's why Shenzhen is not the next SV, neither is New Delhi or Bangalore. Plus, in Shenzhen, I assume the State gov. maintains all the control it can over whatever is going on there. This goes against the SV start-up culture of freedom of entrepreneurship and freedom of thinking and freedom of capital circulation.
If you want to see something interesting, look at what's happening in Pittsburgh right now with Carnegie Mellon and robotics. They have recently gotten huge influxes of cash and I think might be the hub for advanced manufacturing in the future. Of course, this actually started in the 70's, so it didn't take hold immediately.
Culture and capital are the two differentiators, and they're hard to recreate. Investors are willing to bet money on so many crazy ideas.