silicon valley

 by Brendon J. Wilson

BC v. Silicon Valley, Pt. III

I’ve been taking more breaks from writing lately, but a particularly invigorating discussion with Perry Atwal (one of my colleagues from the Sauder MBA Program, and currently the school’s Director of Special Projects) and a separate thoughtful conversation with Kevin Cheng (my former SFU Engineering Science colleague and housemate) reminded me that I needed to revisit the “BC versus Silicon Valley” thread. I’ve already examined the benefits that population density and a networking-addicted community bestow on Silicon Valley – it seems logical now to turn to one of the results of those two elements: a propensity for thinking big.

When I lived in Ireland during 2000, I went to a lot of First Tuesday meetings to watch how people were trying to take advantage of the ‘Celtic tiger’ to make their fortunes. Unfortunately, a lot of the ideas I saw being pitched were wholesale replicas of existing (and very successful, mind you) online businesses in Silicon Valley, such as eBay. In and of itself, that’s not a bad thing – taking an idea and refining it for the local market is a valid strategy. However, the lack of barriers to entry into the Irish market for an existing Silicon Valley online business, coupled with the relatively small Irish market, doomed many of these businesses to failure. Many of these entrepreneurs just weren’t thinking very big.

For example, at one meeting I talked to one bunch of bright-eyed young entrepreneurs who were pitching a video game based on hurling. Hurling is a notoriously brutal sport that is best described as a cross between field-hockey and lacrosse – the sport is indigenous to Ireland. When I asked the students if it had crossed their mind that perhaps they were limiting themselves by choosing a game with such limited appeal, they balked, exclaiming, “Everyone loves hurling! Everybody in Ireland loves it, and nearly everyone in Ireland plays video games! Everyone in Ireland will buy our game!” Wow – everyone in Ireland? Even if they were right and everyone in Ireland did buy their game, they would still have one major problem: Ireland has a population of less than 5 million people. Once they sold the game to everyone in Ireland, they’d have no place to go.

Then again, maybe that’s all they wanted to do. They wanted to sell their 5 million units, take their money off the table, and retire. And there’s nothing wrong with that – it’s a perfectly reasonable thing for an individual entrepreneur to want to do. It’s when an entire society of entrepreneurs do the same thing that one has to be concerned.

The entrepreneurial environment in Vancouver doesn’t differ significantly from Ireland – it thinks small. It’s rare to see an entrepreneur in BC stand up and say, “Screw you world! I’m going to own this market!” Just look at Crystal Decisions – they were one of the leaders in the business intelligence space, but when Business Objects made them an offer, they rolled over, took the money, and retired. BC’s entrepreneurs are very good at taking their money off the table, quickly and permanently, and retiring in Whistler.

While cashing out is every entrepreneur’s dream, the difference between Silicon Valley and BC is that in Silicon Valley, the entrepreneur doesn’t stay out of the game very long. They dive back in, onto the next big thing, the next market to be chased. Sure, they’re in the game for the money, but they’re also there for the adventure. Adventure implies risk – big payoffs are balanced against headfirst failures. Unfortunately, BC has an overly-conservative attitude to risk and is fond of neither the possibility of big failures nor, as a result of this aversion, big payoffs. This conservative attitude immunizes it against most of the elements required to foster the ecosystem that sustains good entrepreneurs. This is a real shame because BC has otherwise a lot of characteristics that could make it a world leader in many areas – it just needs a cultural shift to make it possible. Regrettably, cultural shifts are the hardest to achieve.

Next time: Recognizing Success

in Business / Technology 5 comments
 by Brendon J. Wilson

BC v. Silicon Valley, Pt. II

Continuing on from last time’s discussion of Silicon Valley and the benefits of population density, the logical next step is to talk about one of the side benefits of having so many geeks in one place.

Hot Geek Action!

That’s right, you heard me – hot geek action. Read it again if necessary.

Silicon Valley is quite good at bringing people together. Sure, everyone’s a transplanted workaholic with no social life, but when there’s a chance of getting together to ogle a successful entrepreneur, glean a few tips for success, or grab a glimpse of the future of the tech industry, you have to beat the geeks off with a stick. It’s an insidiously effective positive feedback loop: the people smart enough to run the gauntlet to a liquidity event mold a new generation to follow in their footsteps.

Having a lot of smart people in a region by itself is no guarantee of success – you need to actually gather them together from time to time. You need the members of the population to actually engage with each other, to publicly lick old war wounds, tout their successes, and generally impart wisdom to the general population. Silicon Valley does this very well – any day of the week there’s any number of public events, speeches, meet-ups, featuring people far more successful than you who are willing to tell you how they got where they are today, the mistakes they made along the way, and how you might go about duplicating their success. Half the time, these events are extremely cheap; the other half, they’re free.

While you’re at these get-togethers, you’ll meet another bunch of people who are either exactly like the speaker or, like you, are hoping to be in the speaker’s place in about five years. Things tend to happen.

Now, compare this with the environment in the Lower Mainland.

During my MBA, I was considering joining the Vancouver Board of Trade – until I found out that it would cost $200 to join. This was the student price. In addition, any event that would be worthwhile attending would cost another $40 or so to attend. Talk about a really effective way to kill interest in participation in the community. Comparing this to paying $10 as a non-member of the CSPA and see Jerry Kaplan speak for an hour and a half, or donating $10 to the Computer History Museum to see Steve Case (and mingle with the likes of Woz and Walt Mossberg), I can’t help but feel that organizations in Vancouver are shooting themselves in the foot.

Part of the goal of these industry organizations should be about breaking down communication barriers, and encouraging connections within the business community. That’s how Silicon Valley businesses grow better, faster, and win. And business isn’t the only one that needs to be doing this on an ongoing basis – universities have to be constantly making connections to smooth the transition of technology from the lab to market.

Stanford has this program I just discovered, the Entrepreneurial Thought Leaders Program. It’s a free class that’s open to the public with the express purpose of bringing together the academic and business communities. It hosts an impressive list of speakers drawn from the local business community. Talk about breaking down barriers! And yet when I suggested bringing together the Engineers and MBA students at UBC for a combination entrepreneurship/engineering project course, all I heard from members of the administration were excuses over how it couldn’t be done because of the differences in tuition fees between the two programs. Lame. Maybe Stanford had that problem, and routed around it by doing it for free as a public service.

This brings me to my next rule for duplicating Silicon Valley’s success:

  • Reduce the barriers to bringing people together: Nobody creates a revolution in isolation – get people from all industries, all ages, talking, mingling, sharing, and learning from each other.

Next time: Thinking Big

in Entrepreneurship 8 comments