For years now, the good people of Silicon Valley have been telling us that the rest of America should be more like them. That we should focus more on entrepreneurship and innovation. Last week, on a visit to the region, I was happy to see that we are, indeed, becoming more like them.
I had the privilege of attending the annual conference of the Indus Entrepreneurs (TiE), in Santa Clara, CA. TiECON 2014, as it is called, is billed as the largest entrepreneurship conference in the world. This year, over 3000 entrepreneurs, investors, startups and service providers came together for a series of activities in and around the conference to network, pitch, raise money, recruit talent and learn about the Next Big Thing. Entrepreneurs from over 40 countries also came to see what Silicon Valley is all about, and how they can learn from the best.
The conference reflects why Silicon Valley is a truly an amazing place. There were entrepreneurs from all sectors of the economy – IT, telecom, clean tech, oil & gas, biotech, life sciences, financial services and non-profit. Sitting side by side, they heard from startups at the cutting edge of technology – on topics like “big data” and the “Internet of things”. You can hear about those topics at a lot of conferences, but only in Silicon Valley is the conversation already about “Big Data 2.0”. The rest of us are still on Version 1.0.
But what struck me about the conference was how much the rest of America has been paying attention to the Silicon Valley model. The Indus Entrepreneurs (TiE) has been a big part of this. Launched over 15 years ago in the Bay Area, TiE now has 11,000 members and sixty chapters in 17 countries – all committed to building entrepreneurial ecosystems with the characteristics and ethos of Silicon Valley. In addition, every major American city now as an entrepreneur-focused growth strategy, an accelerator or two, and local universities rushing to brand themselves as entrepreneurial.
Ten years ago, only Silicon Valley and Boston had enough home-grown startups and executives to host an entrepreneurship conference on such cutting-edge topics. Today, there are many American cities that can host entrepreneurship conferences with a slate of home-grown, but global leaders in technology as their speakers and sponsors. Many cities can fill the room with entrepreneurs and experts thinking about The Next Big Thing. No longer must I go to the traditional centers of entrepreneurship to understand the opportunity in my field or scope out the competition. This is not entirely because the world is flat. This is also because people around the United States have actively studied the attributes of the Silicon Valley culture and adapted it to their cities and regions.
Silicon Valley still maintains two huge advantages of the rest of the world. One is tangible and the other is intangible.
The tangible advantage is simply the volume of activity in the Bay Area (not just Silicon Valley). It would still be hard to get 3000 people regularly for an entrepreneurship conference anywhere else. When adjusted for population, the Bay Area has nearly 40% more startup companies than other regions like Boston, New York or Austin, TX, according to data from the US Census. That means more startups, more investors, more competition, and as a result, more innovation and speed.
Certainly, as other cities build their entrepreneurial ecosystems, this size advantage will decrease. New York, Los Angeles and Houston easily have the populations to surpass the Bay Area in size of the entrepreneurial ecosystem. On the flip side, the Bay Area may maintain this advantage for centuries to come. Nobody has displaced New York as the financial capital of America in nearly 300 years. (Again, a title taken from Boston.)
The intangible advantage that Silicon Valley has is the willingness to tolerate risk. And this advantage will be much, much harder for others to replicate. The Bay Area has truly become a place where anyone with an idea can build a company or non-profit. The region’s investors are open minded, liberal with their money, and big in their thinking. This combination has led to investments in college dropouts, immigrants with limited English skills and people with alternate professional backgrounds. In too many other cities, the entrepreneurs must have a pedigreed technical degree, the right look and connections before investors look their way. In the blue-blood cities of the East Coast, that “profiling” has been hard to shake. Investor’s have been less willing than their West Coast counterparts to invest in promising technologies or entrepreneurs without a track record. We are starting to see signs of this changing as well, but not at the speed most entrepreneurs would like.
Bill Gates had a quote several years ago about the rise of the BRIC nations, suggesting that the their growth would not come at the expense of the United States, and that the United States will continue to be a global leader and maintain a high quality of life, but that our share of the global pie will shrink. That was the sense I got visiting the Bay Area.
Before my friends in the Bay Area send me nasty tweets and emails, remember that imitation is the best form of flattery. And everyone is imitating you.