Working For Equity CEO Panel Returns to Silicon Valley Code Camp 2013

Written by Sean Murphy. Posted in Events, Founder Story, Silicon Valley, skmurphy

We are reprising our “Working for Equity” CEO Panel for the fourth year at the 2013 Silicon Valley Code Camp. Here is the current write-up, we will be adding panelists’ bios in a few days.

Many of us in Silicon Valley seek either to found or to be an early employee at a technology startup. If you aspire to create a startup come take part in a conversation with four startup founders about what’s really involved in leaving your day job and striking out on your own or with partners. The startup founders range from serial entrepreneurs to first-time CEOs, they will share their vision, drive and passion as they discuss the nuts and bolts of following their dreams to building something that will change the world.

Please Register for Silicon Valley Code Camp and indicate your interest in the session, this determines the size of room we will be in. We have had some great discussions not only among the panelists but with the audience–more than half the time for the session is allocated to questions from the audience–so please let us know if you plan attend so we will have room for you. There is also a Mobile Session Viewer And Planner.

While I think our panel is one of the better reasons to attend Code Camp there are another 232 sessions offered by experts and practitioners that cover a broad range of topics of interest to software engineers. Code Camp takes place all day Saturday October 5 and Sunday October 6 on the Foothill College campus at 12345 El Monte Rd, Los Altos Hills, CA. The “Working for Equity” panel takes place on Saturday October Oct 5 at 1:45.

For more information on earlier “Working for Equity Sessions” see

Ebb and Flow

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

A long term viable business model embraces ebb and flow: it organizes the abandonment of failed and obsolete products to enable an investment strategy for new growth that emphasizes experimentation in anticipation of a high rate of early small failures.

Evelyn Rodriguez Envisions a Silicon Valley Renaissance of Art & Culture

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

Among my other pursuits, I envision a Silicon Valley renaissance that brings a love of art, culture, place, and the divine spark alive and innate within our humanness out into the open.

To that end, I’m working on some ideas that revive Parisien style salons. Imagine curated one-of-a-kind intimate living art experiences. Seasonal dishes. Cross-fertilization of folks from the agriculture/foodie arena, the arts, and the techie financiers of the region.

Inspiration and pushing our edges is not a solitary act.

The Italian Renaissance wasn’t about one artist, one patron. It was a movement. A concerto with many players in the orchestra. I concur with this statement from the Montalvo Arts Center in Saratoga, CA:

“While the voice of an idea may appear to be individual, in fact the emergence of new ideas is a collective effort.”

Evelyn Rodriguez “About Page

It’s a compelling vision. To the extent that we can create opportunities for collaboration and shared improvisation that infuse art with our strengths in science and technology I think it would be possible to spark a new Renaissance. In Finding Silicon Valley in Two Passages from E. B. White’s “Here Is New York” I observed

What the Silicon Valley settlers lack in comparison to those who aim for New York–probably less interest in the arts or finance–they compensate for in their commitment to innovation, science, and technology.

I wonder if we have neglected the arts to our detriment.

Evelyn Rodriguez elaborates on models for collective efforts in  “The Myth of the One-Woman Inspirational Whirlwind” and references a great quote by Michael Schrage:

“If we really want to understand innovation and collaboration, we have to explore shared space. Consider Watson & Crick: How many experiments did they do to confirm DNA’s double helix? Zero. Not one. They built models based on other people’s data. These models were their shared space. Their collaboration in that shared space powered their Nobel Prize-winning breakthrough. If you don’t have a shared space, you’re not collaborating.”
Michael  Schrage, MIT design researcher and author of “Serious Play

In “$650,000 grant drops in your lap, and you’d…” Rodriguez outlines an approach very similar to the Art Prize model developed by Rick De Vos that has helped to transform Grand Rapids, MI.

Ben Kaufman on “What Raising Money Means”

Written by Sean Murphy. Posted in Rules of Thumb, Silicon Valley

Don’t congratulate people for raising money. That was never the goal. The goal is building a successful and meaningful business. When people raise money, instead of congratulating them, wish them luck. Their work is just getting started.

Congratulating people for financing perpetuates a problem that has plagued the startup world. The problem is that that it’s easy to focus on the hype surrounding a company, and lose sight of the fundamentals.

This is why our industry is flooded with […] people whose only ambition in life is to raise money, and then sell their company. They have no real interest in building a meaningful and enduring business. If we let [the people] dominate, we all lose.

This is my favorite startup quote of all time (although I don’t know who said it): “Congratulating an entrepreneur for raising money is like congratulating a chef for buying the ingredients.”

Ben Kaufman in  “What Raising Money Means to Me

Four key points for bootstrappers (from 8 Tips for Evaluating Funding Alternatives)

  • Revenue, especially break even revenue, is never dilutive of your ownership.
  • Paying customers are real proof that there is demand for your product. Getting funded is proof that an investor thinks there will be demand for your product.
  • Your most important investors are your spouse, friends, and family who will provide you with emotional support on the entrepreneurial roller coaster.
  • Professional investors don’t want control of your business, they want a return on their investment.

Related Posts on Viable Business Models

Exits vs. Enduring Companies

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

VCs and angels may talk about changing the world, but their business model rests on a more prosaic calculation: Buy low, sell high. They invest in companies they think will become more valuable, so they can sell their stake for a sizable profit. From the time that VCs invest in a company, they have five years—10 at the most—to sell their entire position, hopefully for many times more than their original investment. After that, it doesn’t matter to them whether the company survives a year or a century.

To put it another way, the VC model is based on creating wealth for investors, not on building successful businesses. You buy into a company early on and sell out a few years later; if you pick well, you can make lots of money. But your profits don’t accrue to the company itself, which could implode after your exit for all you care. Silicon Valley is full of venture capitalists who have become dynastically wealthy off the backs of companies that no longer exist.

Felix Salmon “For High Tech Companies, Going Public Sucks

Marc Andreessen’s selection as “The Man Who Makes the Future” in a recent Wired cover and interview highlighted five key idea and related project or companies he started as a result:

  1. 1992: Everyone Will Have the Web  (Mosaic at NCSA)
  2. 1995: The Browser Will Be the Operating System (Netscape)
  3. 1999: Web Businesses Will Live in the Cloud (LoudCloud)
  4. 2004: Everything Will Be Social (Ning)
  5. 2009: Software Will Eat the World (Andreessen Horowitz)

It’s interesting that there is no mention of Jim Clark recruiting him to start Netscape, he does have an interesting aside as to how ephemeral even significant products can be:

Andreessen: One of the first times Zuckerberg and I got together, in 2005 or 2006, he stopped me in the middle of conversation and asked: “What did Netscape do?” And I said, “What do you mean, what did Netscape do?” And he was like, “Dude, I was in junior high. I wasn’t paying attention.”

Felix Salmon offered a less enthusiastic endorsement than Wired:

“In many ways, Andreessen’s entire fortune has been built on the greater-fool theory: if you build something trendy enough, there’s probably going to be a huge lumbering company out there somewhere willing to overpay for it. Hence the buzziness of the Wired interview — clouds! social! SAAS!”
Felix Salmon in “The Problem with Marc Andreessen

Salmon’s assessment echoes Chris O’Brien 2009 profile, “The Curious Case of Marc Andreessen” written just prior to the launch of Andreessen Horowitz, which triggered a Curious Case of Marc Andreessen Part 2. Some excerpts

And then there’s Marc Andreessen, the businessman, who seems to me to be — how can I put this charitably? — a bit of a dud.  […]

I don’t want to imply he’s a failure, because he’s not. But when I look at Andreessen’s business track record, I’m less interested in his checking account than the financial statements of his companies. As far as I can tell, Andreessen has never started or operated a profitable business, with one exception: Netscape turned an annual profit, back in 1996 when it posted a $19 million profit. Of course, that was when the company still charged you $49 to buy a copy of Netscape Navigator. Once Microsoft started giving its Explorer browser away for free, that was all she wrote. Andreessen and Netscape couldn’t figure out another business model, and vanished a couple of years later in a complex deal with Sun Microsystems and AOL that was announced November 1998.

[…]

Andreessen’s reputation has only risen as he has emerged as a leading angel investor for the Web 2.0 industry, advising or investing in companies like Facebook and Twitter. These companies reflect the philosophy of service and technology over revenues and profits.

[…]

Of course, at some point, these priorities have to change. A company has to actually make money. Innovation can’t be sustained by creating a venture-backed Ponzi scheme where one money-losing start-up is sold to another, which is then sold to another.

Losing money indefinitely isn’t just a financial failure. It represents a failure to truly understand how a service or product is creating value for a customer, how to communicate that value, and how to persuade the customer to pay above and beyond for that value.

That, all too often, is where the valley still falls short: Failing to innovate around the business to the same degree it innovates around the technology.

Three years after O’Brien’s article his assessment seems prescient.

CTO Mastermind Open House

Written by Theresa Shafer. Posted in Consulting Business, Silicon Valley

Saturday March 24, 9-11am

Ground Floor Silicon Valley, located at  2030 Duane Avenue, Santa Clara,

We are launching new Mastermind groups in response to several requests from entrepreneurs who wanted to form an advisory board of peers with a deeper understanding of each other’s businesses and shared accountability.

Come to the meeting and see if you feel comfortable with the other folks that we invite and we will work out times and locations. There will certainly be one group that meets on weekends, there may be others that meet on a workday.

The difference between these mastermind meetings and a Bootstrapper Breakfast meeting is that anyone is welcome to drop in to a breakfast, this will be the same group meeting and holding each other accountable for goals and commitments. Over time, because these entrepreneurs are more or less in the same stage of their business and meeting multiple times they will get to know each better than the average breakfast attendee.

There is no charge for this open house but if you decide to join a facilitated small group there is a small monthly subscription.  Want to be notified of future open houses join Bay Area Mastermind meetup.

Tools for Finding a Physical Workspace: Deskwanted, LiquidSpace, Loosecubes, OpenDesks

Written by Sean Murphy. Posted in Consulting Business, First Office, Silicon Valley, Startups

If you are looking to rent a desk or conference room by the hour, day, week or month here are four tools you can use to search. All of them cover Silicon Valley and other metropolitan regions as well

Updated: Also consider Evenues and Cloud Virtual Office, see below for details.

Implications for the  future of startups and small service firms:

  • It’s interesting that same forces that are making fractional leases on computing capability available in the cloud seem to be at work enabling the ad hoc provisioning of workspaces.
  • Coupled with the pervasive availability of wifi in coffee shops and eating establishments and transition to laptops or even smaller form factor tablets and smartphones for computing support,  the old assumptions that an incubator provided value offering office space, Internet connectivity, and space in a co-located datacenter are defunct.
  • For startups with less than a dozen people, both their computing and physical office configurations are becoming increasingly virtual.

I think this will enable new opportunities for firms to provide professional services, knowledge work, and clerical support in a variety of new forms and delivery modes by interacting either in virtual on-line spaces and/or virtual office space on demand.



Update Thu-Feb-09
: A commenter suggests evenues.com also provides information about meeting rooms and event venues. I took a quick look at the site for Meeting Rooms San Jose and learned about a number of new venues to consider. The site also had an interesting blog post on “A Brief History of Coffee Houses as Meeting Places” which reminded me of this RSA video of Steve Johnson on “Where Good Ideas Come From.” In it he explains that coffee houses were one of the first co-working establishments that allowed people to mix and recombine different thoughts to form new ideas.

Update Fri-Feb-10: I came across Cloud Virtual Office (tagline “Virtual Offices & Touchdown Space”) researching “Going Bedouin” a term coined by Greg Olsen that I had written about previously on “Bootstrapping Startups: Bedouin, Global, Incessant, and Transparent” Related blog posts:

  • the original blog post by Greg Olsen is no longer available but a copy that admits an image that contained his recipe for a Bedouin startup is still up at “Going Bedouin” on GigaOm
  • The Long Hallway” by Jonathan Follett

Update Mon-Apr-2 a reader suggested DesksNear.Me as another tool for this list.

The Startup Mythology of Silicon Valley

Written by Sean Murphy. Posted in Silicon Valley, skmurphy

A post on Matt Wensing’s blog alerted me to an atypical post on TechCrunch by Mark Hendrickson “Startup School and the Instigation of Entrepreneurship.” It’s an insightful critique of the startup mythology of Silicon Valley. Some excerpts:

“We are experiencing a generation of entrepreneurs who prioritize the phenomenon of entrepreneurship over its justification; we ought to be concerning ourselves as a community with teaching folks not only how to get into the entrepreneurship game but how to find their purpose as well.”

I think the dominant myth of Hollywood is to be part of a movie. Silicon Valley’s default aspiration is to be part of a venture backed startup. How do you know you are in a venture backed startup? You secure investment from a venture firm and are celebrated in the pages of TechCrunch. This detracts from a focus on value creation, as Jeff Nolan observed in January 2009, writing in “Why the TechCrunch Economy Will Falter” (bold in original):  “…a fundamental flaw in the startup economy promoted by a wide swath of pundits and proponents, that starting is more important than sustaining.”

Hendrickson continues, using the phrase “deliberate practice” which echoes Anders Ericsson‘s “The Role of Deliberate Practice in the Acquisition of Expert Performance

We should develop and promote a more deliberate practice of discovering passions worth pursuing and problems worth solving in a less haphazard way. […] But without it, institutions like YC and its Startup School will likely continue receiving and channeling ever-more entrepreneurs who may be well-versed in tactics but who lack anchoring values that drive their efforts. And that will be a shame not only for those individuals but the investors and customers who await the fruits of their labor, which otherwise could have amounted to so much more.

Tim O’Reilly has also suggested to  entrepreneurs that they “Work on Stuff that Matters.” Alas this is easier said than done but essential to making a significant contribution. In “Overnight Success”  I recommended that “if you define success as making a lot of money quickly you should go into sales and cut out the middleman”.

It’s easy to lecture other people about their shortcomings, or at least your perception of their shortcomings.  I think the celebration of financing events as accomplishments instead of as a sometimes necessary precursor to the start of real efforts is one problem that Jeff Nolan, among many others, has already touched on.  One of the differences between the 80’s and today is a condensed time frame caused by a “built to flip” mentality that focuses on “cashing out” in a year or two instead of five to ten years building a real company.

I am reminded of the movie “Hoop Dreams” which documented how an entire generations of inner city boys are aimed at a few slots in the NBA. Most that miss are left with few if any marketable skills or fallback options for earning a living.  But all along the way they are encouraged by coaches, scouts, and others who are paid to fill the pipeline with new recruits.  I worry that a lot of what passes for entrepreneurial advice is given by folks who profit from their participation in the venture ecosystem and it is encouraging an “entrepreneurial lifestyle” that bears little resemblance to what’s needed to create and manage a going concern.

People ask me why we work with bootstrapping entrepreneurs and how we make any money at it. I like the orientation that most bootstrappers have toward creating value for their customers (it’s the only way they can get paid so it’s also a matter of enlightened self-interest). We run our practice on a “low intensity long duration” model that assumes success is going to require perseverance, intelligent experimentation, and a commitment to solving problems that will make a difference in people’s lives (a shorter answer is that we make less than we might serving other firms but we enjoy it more so it balances out).

See also

A Nicely Furnished Room In A House That’s Burning Down

Written by Sean Murphy. Posted in 2 Open for Business Stage, Silicon Valley, skmurphy

Silicon Valley is a nicely furnished room in a house that’s burning down, the state of California.

From Joseph Vranich‘s blog “CA Business Departures Increasing–Now 5x 2009” June 20, 2011.

  • From Jan. 1 of this year through this morning, June 16, we have had 129 disinvestment events occur, an average of 5.4 per week.
  • For all of last year, we saw an average of 3.9 events per week.
  • Comparing this year thus far with 2009, when the total was 51 events, essentially averaging 1 per week, our rate today is more than 5 times what it was then.

The same tracking system has been in place throughout the three-year period.

The top five destinations are (1) Texas, (2) Arizona, (3) Colorado, (4) Nevada and Utah tied; and (5) Virginia and North Carolina tied.

Our losses are occurring at an accelerated rate. Also, no one knows the real level of activity because smaller companies are not required to file layoff notices with the state. A conservative estimate is that only 1 out of 5 company departures becomes public knowledge, which means California may suffer more than 1,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars.

From Joel Kotkin’s “The Golden State’s War on Itself” in  the Summer 2010 issue of  City Journal:

California has long been a destination for those seeking a better place to live. For most of its history, the state enacted sensible policies that created one of the wealthiest and most innovative economies in human history.  […]

Recently, though, the dream has been evaporating. Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent. […]

Since the financial crisis began in 2008, the state has fared even worse. Last year, California personal income fell 2.5 percent, the first such fall since the Great Depression and well below the 1.7 percent drop for the rest of the country. Unemployment may be starting to ebb nationwide, but not in California, where it approaches 13 percent, among the highest rates in the nation. […]

Silicon Valley, for instance—despite the celebrated success of Google and Apple—has 130,000 fewer jobs now than it had a decade ago, with office vacancy above 20 percent. […]

And Cisco, whose fortunes rose supplying the “picks and shovels” of the Internet revolution plans to shed 10,000 employees, or about 14% of its workforce by laying off 7,000 and getting 3,000 to accept early retirement according to a report by Ashlee Vance “Cisco said to plan cutting up to 10,000 to buoy profit

Cisco Systems Inc. (CSCO), the largest networking-equipment company, may cut as many as 10,000 jobs, or about 14 percent of its workforce, to revive profit growth, according to two people familiar with the plans.

The cuts include as many as 7,000 jobs that would be eliminated by the end of August, said the people, who asked not to be identified because the plans aren’t final. Cisco is also providing early-retirement packages to about 3,000 workers who accepted buyouts, the people said.

And Joint Venture Silicon Valley noted on Valentines Day 2011 that “Structural flaws in local government budget threaten to sabotage the regions gains.

A growing crisis in state and local government finance is undermining the economic recovery in Silicon Valley, according to the 2011 Silicon Valley Index released today by Joint Venture: Silicon Valley Network and Silicon Valley Community Foundation.

The comprehensive yearly study on the economic strength and overall health of Silicon Valley shows signs of a slow comeback from the deep recession, but it also reveals a precarious road ahead for cities, towns and counties in the region as public revenue drops while the demand for services climbs.

“Silicon Valley’s economy is making slow but noticeable progress recovering from the major blow delivered by the recession,” said Russell Hancock, CEO of Joint Venture, “but unless we address the fundamental structural issues in our local governments we cannot sustain continued growth.”

As entrepreneurs we have to identify and pursue the opportunities that are available, not lament the loss of earlier ones we may not have taken full advantage of.   But I wonder if we paid a  little more attention to local and state government policies and decisions, it might pay a significant dividend in improvements to the economic environment that is the necessary platform for our new business efforts.


Update July 14: I have reflected on this post and realized how difficult it can be to restrict your focus to those issues you can control or at least affect. As Stephen Covey points in “7 Habits of Highly Effective People” under the first habit of “Be Proactive” your circle of awareness is much larger than your circle of influence.

It’s not my intent to start a political discussion or to to start a round of “Ain’t it Awful” but I worry that these structural issues were identified by independent observers with a stake in California’s ongoing economic prosperity, not people trying to complain or generate page views. I take them very seriously. I worry that the challenges they have identified will not be easy to address much less fix, and that for the most part the situation continues to deteriorate. Without thoughtful and concerted action a new equilibrium may be reached that looks closer to today’s Michigan than the California of the last few decades.

Update Sep-24-2012: a report from the Manhattan Institute,  “The Great California Exodus: A Closer Look“, by Tom Gray and Robert Scardamalia documents a migration of 3.4 million residents out of the state since 1990. Some excerpts:

Executive Summary

For decades after World War II, California was a destination for Americans in search of a better life. In many people’s minds, it was the state with more jobs, more space, more sunlight, and more opportunity. They voted with their feet, and California grew spectacularly (its population increased by 137 percent between 1960 and 2010). However, this golden age of migration into the state is over. For the past two decades, California has been sending more people to other American states than it receives from them. Since 1990, the state has lost nearly 3.4 million residents through this migration.

This study describes the great ongoing California exodus, using data from the Census, the Internal Revenue Service, the state’s Department of Finance, the Bureau of Labor Statistics, the Federal Housing Finance Agency, and other sources. We map in detail where in California the migrants come from, and where they go when they leave the state. We then analyze the data to determine the likely causes of California’s decline and the lessons that its decline holds for other states.

The data show a pattern of movement over the past decade from California mainly to states in the western and southern U.S.: Texas, Nevada, and Arizona, in that order, are the top magnet states. Oregon, Washington, Colorado, Idaho, and Utah follow. Rounding out the top ten are two southern states: Georgia and South Carolina.

Conclusion

California has an opportunity deficit that shows up in its employment data and its migration statistics. We can understand the nature of that deficit clearly when we compare the Golden State with those that lure its residents away. In such a comparison, as we have seen, one fact leaps out: living and doing business in California are more expensive than in the states that draw Californians to migrate. Taxes are not the only reason for this, but we have highlighted their effect because taxes—unlike rents, home prices, wages, or electric bills—can be changed through sheer political willpower.

California has cut taxes in the past, most dramatically with 1978’s Proposition 13, and when it has done so, prosperity has followed. Ballot propositions this November aim to do the reverse, raising taxes on business owners while the state is still struggling to hold its own against more aggressive, confident rivals. The results will send a strong signal, whichever way they go: the state’s voters will be deciding to continue on the path of high taxes and high costs—or to make a break with the recent trend of decline.

In the meantime, California’s leaders are not powerless to stem the state’s declining appeal. For example, they certainly can do something about the instability of public-sector finances, which is likely one of the key factors pushing businesses and people toward other states. They can also rethink regulations that hold back business expansion and cost employers time and money. And though there is no changing the fact that California is more crowded than it used to be and is no longer as cheap a place to live as it once was, policies can make the state more livable. One reason that land is costly now is that much of it is placed off-limits to development. Spending on transportation projects where they are really needed—in congested cities—can ease life on freeways that now resemble parking lots.

California’s economy remains diverse and dynamic; it has not yet gone the way of Detroit. It still produces plenty of wealth that can be tapped by state and local governments. Tapping that private wealth more wisely and frugally can go far to keep more of it from leaving.

SDForum Workshop Series “Networking for Lifetime Career Success”

Written by Theresa Shafer. Posted in Events, Silicon Valley

SDForum June Event Information:

Title: SDForum Workshop Series “Networking for Lifetime Career Success”

Date: Tuesday, June 28, 2011, 7:30 AM – 10:00 AM

Description: During times of change, the ability to naturally and effectively network to identify new opportunities and develop professional relationships can be critical to success. In this interactive session, Next Step CEO, Jennifer Vessels, will provide proven tips for successful networking that attendees can put into practice immediately at the event.
This hour long program will include tips to you can use immediately to:

  • Create a memorable first impression.
  • Develop a compelling elevator speech to gain attention and be remembered.
  • Leverage ‘keys to networking success’ to stand out and be noticed (positively).
  • Utilize follow-up as foundation for long term relationship building

With time for networking, interaction and feedback built into the program, all participants will leave with an action plan and approach they can most effectively utilize for networking.

Confirmed Speaker: Jennifer Vessels, CEO of Next Step

Location: White & Lee, 541 Jefferson Avenue, Suite 100 Redwood City, CA 94063

Registration Link: http://www.sdforum.org/workshopseries

History of Silicon Valley: It’s 100 Years Old

Written by Sean Murphy. Posted in Events, Silicon Valley, skmurphy

History of Silicon Valley

Michael Malone, in a Dec-2001 article for Forbes ASAP entitled “Second Sight” (reprinted in his book “The Valley of Heart’s Delight“) offers some insights on the history of Silicon Valley:

The Valley had been born of war. Military contracts had built Hewlett-Packard and Varian; the nuclear age had given birth to the Valley’s largest employer, Lockheed Missiles and Space. So too had defense order underwritten the success of the Valley’s first modern company, Fairchild Semiconductor. All had grown rich building successive generations of weaponry; they would grow richer yet.

Harry Truman once observed “the only surprises are the history you don’t know.” Malone offers an eye opening perspective on some history “hidden in plain sight” of the origins of Silicon Valley. Radar, radio, and countermeasures–both mechanical and electronic–underwent a rapid evolution to become what was called “electronic warfare.” Starting with World War II efforts and continuing with the Cold War, military R&D funded a considerable amount of engineering effort in Universities and private firms in Silicon Valley.

Steve Blank on “The Secret History of Silicon Valley”

Video of “The Secret History of Silicon Valley” talk given at Google Dec-18-2007 is available here http://www.youtube.com/watch?v=hFSPHfZQpIQ

The most interesting aspect of the talk for me was a vision of “systems fighting systems” in an accelerated co-evolution. Eric Ries has a copy of Steve Blank’s slides up at “Where Did Silicon Valley Come From” Slide 37 has the “systems fighting systems” picture where it’s clear that a bombing raid was not a single homogeneous flock of bombers but included not only escort fighters but a number of different kinds of electronic warfare aircraft, with many distinct radio/radar detection and countermeasures roles.

Silicon Valley is 100 Years Old

Blank anchors the birth of Silicon Valley with Hewlett Packard but I am guided by Timothy J. Sturgeon’s  “How Silicon Valley Came to Be” and believe that Federal Telegraph is a better origin point.

The fact that the San Francisco Bay Area’s electronics industry began close to the turn of the Twentieth  Century should lay to rest the notion that industrialization and urbanization on the scale of Silicon Valley can be quickly induced in other areas. Silicon Valley is nearly 100 years old. It grew out of a historically and geographically specific context that cannot be  recreated. The lesson for planners and economic developers is to focus on long-term, not short-term developmental trajectories. Silicon Valley was the fastest growing region in the United States during the late 1970s and early 1980s; but that growth came out of a place, not a technology. Silicon Valley’s development is intimately entwined with the long history of industrialization and innovation in the larger San Francisco Bay Area.

From California Historical Landmarks for Santa Clara note that Federal Telegraph predates HP by more than a quarter of a century and all of the early WWII era technology entrepreneurs had a common interest in radio.

NO. 836 PIONEER ELECTRONICS RESEARCH LABORATORY – This is the original site of the laboratory and factory of Federal Telegraph Company, founded in 1909 by Cyril F. Elwell. Here, Dr. Lee de Forest, inventor of the three-element radio vacuum tube, devised the first vacuum tube amplifier and oscillator in 1911-13. Worldwide developments based on this research led to modern radio communication, television, and the electronics age. Location: In sidewalk, SE corner of Channing Ave and Emerson St, Palo Alto

NO. 976 BIRTHPLACE OF SILICON VALLEY – This garage is the birthplace of the world’s first high-technology region, “Silicon Valley.” The idea for such a region originated with Dr. Frederick Terman, a Stanford University professor who encouraged his students to start up their own electronics companies in the area instead of joining established firms in the East. The first two students to follow his advice were William R. Hewlett and David Packard, who in 1938 began developing their first product, an audio oscillator, in this garage.
Location: 367 Addison Ave, Palo Alto

Silicon Valley: Not as Nuts as 99…Yet

Written by Sean Murphy. Posted in 2 Open for Business Stage, Rules of Thumb, Silicon Valley, skmurphy

So we are starting to pump a little hot air back into the bubble every week now. The streets of Silicon Valley witness young entrepreneurs looking for department store Santas venture capitalists to listen to their list of needs and make their dreams come true. It’s “not as nuts as 99” but not as sane, or dour, as 2003. Roger McNamee blogged for the better part of 2004 on “The New Normal” with this as his inaugural post:

Wake up and smell the coffee. This is not your father’s economy. And it’s not the boom that inflated our expectations and then exploded. But it’s also not the doom and gloom we’ve been mired in for nearly three years now! So, wake up. Pull yourself together. Get on with it. With what you ask? With the rest of your life. It’s a bright, fresh world full of opportunities. I know that runs counter to many of the opinions all around us, but it’s true, and I can show you why. It’s true for the investor, the entrepreneur, the CEO, the unemployed, and the human being seeking balance. This blog will be dedicated to insights and discussion about life, business, and investment in what I call The New Normal.
Please join in!

Now I regularly have conversations that remind me of 1997-2000. I am routinely admonished that “the old rules no longer apply” and advised that successful firms spend much of their treasure on PR social media and viral marketing (regular marketing is a waste of money since viral marketing is free). YouTube’s 1.6 billion dollar exit is the exemplar burned in 10 mile high neon letters into the back of everyone’s retinas.

This is not a lament nor a longing for the early 90’s (or early 80’s), now is the best time to be alive and an entrepreneur. It’s a wish that more firms would aim for creating value for their customers.

Note: This is cross-posted from  “Report from Silicon Valley” on FunMurphys, my brother’s blog.

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