Silicon Valley Bleeding

“Silicon Valley invented the technologies that will break apart Silicon Valley,” was the opinion of one Silicon Valley start-up founder in my cabal.

Scott McNealy, co-founder of Sun Micro and the longest running ad lib comedy act in high-tech recently started a fresh round of discussions about the perpetually pending demise of Silicon Valley. He is heading a stealth start-up in Colorado, far from Stanford, Sand Hill Road and giant blimp hangers. This caught the attention of over seasoned Silicon Valley veterans, and apparently McNealy received a number of inquiries concerning the locale for his new technology empire.  In response he listed the “Top 10 Reasons it’s Better to do a Startup in Colorado than California.”

Jerry Brown is spinning in his grave (What?  Not yet?  You’re kidding?  He looks older than Keith Richards’ grandfather!).

sv-mapMany things make Silicon Valley the incubator for new and world changing technology, but none of those elements are indelible.  There is a lot of tech-savvy venture capital here, but investors around the globe are banking on technology these days (oil and energy investors in Texas are becoming digital sugar daddies).  A cluster of tech talent is tops, but in this century we can hire anyone from any point on the globe to cut code, map schematic diagrams and even digitally collaborate on chip manufacturing plant design. About the only other variable is the Silicon Valley culture that embraces failure, but few things aside from political lies move faster than cultural biases.

And if Silicon Valley’s masterminds are ready for Colorado ski slopes, then they take inertia and vibe with them.

An informal poll of a handful of founders shows me they have no particular desire to be or stay in Silicon Valley.  Several local founders would leave tomorrow if their VC’s didn’t insist on keeping a close watch on their cash.  Those not in Silicon Valley are actively looking for capital elsewhere to avoid relocation.  Even a couple of VCs I know admit that if they had a way to keep tight reins on their portfolio companies, they could care less about the location of corporate headquarters.

In short, nobody is insisting that Silicon Valley remain the center of the technology universe … not even the people in Silicon Valley.

Yet numbers, being stubborn things, may tell a different story.  Spot checking a few Silicon Valley cities (with Cupertino stats shown below) we see that since the dot-bomb era the population is slightly larger, income (adjusted for inflation) is higher, and the number of people with sheep skins is up significantly. A single decade snapshot is insufficient to define a trend, but it seems Silicon Valley is not exactly destined for diaspora.

2000 2009
Population over 25 34,521 35,207
Percent with bachelor degree or higher 65.4% 72.6%
Management, professional and related occupation 71.0% 73.2%
Median household income 100,411 119,398

This does not mean it won’t happen.  After all, residential broadband is still a relatively new commodity and the world is working out novel patterns of employment.  We may well see a hybrid whereby many or most of the sharpest startups land in Silicon Valley for the lucre, maintaining tiny executive headquarters while virtually managing a mass of employees scattered yon.  Nothing guarantees Silicon Valley will be Silicon Valley in the future … the place has a habit of inventing the next new thing, which might be a new “center” of the technical universe.


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