There is an ongoing debate on what constitutes a great tech startup ecosystem outside of Silicon Valley, as other cities and regions try to export, copy, emulate, or learn from what makes Silicon Valley the model that it is.
Brad Feld, who wrote the book on Startup Communities recently discussed whether Silicon Valley is like religion. Fred Wilson asked if the NYC Tech Community could have another name than the default moniker it often gets, as Silicon Alley.
Some others want to minimize Silicon Valley’s impact on the rest of us, but I don’t believe you can do that.
My perspective on Silicon Valley and its impact on other such ecosystems is tainted by two personal perspectives: a) having worked at Hewlett-Packard for 14 years, I started working with and visiting Silicon Valley since the early 80’s, b) being part of the Toronto-Waterloo tech ecosystem, a region that is trying hard to earn its reputation and place in the “world of tech ecosystems”.
I have two conclusions that I’ll summarize here, and will expand on each later:
Silicon Valley is the only region that has been producing industry giants for each successive waves of technological innovation cycles, decade after decade.
No ecosystem in the world is perfect, including the one in Silicon Valley.
Silicon Valley Produces Giant Companies for each Wave
Silicon Valley is not only still the largest ecosystem that produces tech companies, but its history is made-up of a succession of giant companies that emerged out of each successive technology cycles. Almost each decade is defined by a handful of representative companies who symbolize a particular era:
- Pre 80’s, Semiconductors and Aerospace: Intel, Fairchild, Lockheed Martin, Hewlett-Packard.
- 80’s, Computers and Software: Sun Microsystems, Oracle, HP, Apple.
- 90’s, Networking and Internet I: Netscape, Cisco, Yahoo!, eBay.
- 2000’s: Internet II and Cloud Computing: Google, Apple 2.0, Salesforce, Netflix, VMware.
- 2010’s: Social and Tech Energy: Facebook, LinkedIn, Twitter, UBER, Dropbox, Tesla, SolarCity.
- 2020’s: ??
Silicon Valley is an amazing epicenter of energy and activity in tech innovation. Keeping it in the back of your mind provides an incredible mental model for any other tech ecosystem.
No Ecosystem is Perfect
In my own backyard, the Waterloo-Toronto ecosystem is on top of my mind, as it gets frequently self-introspected by its participants because it’s not so perfect, as it tries hard to be recognized as a top global tech startup region.
But no ecosystem is perfect, and none will ever be.
Even Silicon Valley has its own flaws and imperfections, despite its appearance to be the “model”: office rents are high, real estate is expensive, employees are less loyal, traffic is bad, salaries are higher, it has some arrogance, it suffers from a superiority complex, it’s hyped, etc.
What sets an ecosystem apart and on the path of success is not the degree in which it tries to copy Silicon Valley, but in how it develops its own uniqueness. And if there are ecosystems to be copied, the better lessons come from places like New York, Austin or Boulder who created and evolved their own ecosystem, with their own identity and uniqueness, without being obsessed by replicating Silicon Valley.
Any tech ecosystem needs to work with what they have, make it its own, and work with it to make it better, piece by piece.
Truth is, you don’t need a perfect ecosystem, but you need many of your ecosystem parts to be excellent.
Despite the intent to “copy” or “emulate”, you can never make a perfect copy of something as complex as an ecosystem. You can only take lessons and apply them in your own way. Using a cooking analogy, you can follow a recipe, but because you will source most of the ingredients locally, the expected results will be different. The flavors will not be the same. And the rituals, stories, companies, actors and landmarks of an ecosystem will be different from region to region.
Maintaining an ecosystem is also like living in a city you like- if you find a pothole, you avoid it, but you also would do good if you report it.
In the Toronto-Waterloo ecosystem, we’re still growing to be that ecosystem that stands tall on its own two feet (literally). We probably have the best of both works in terms of underlying cultural underpinnings: a Silicon Valley culture mentality (Waterloo), coupled by a New York City drive intensity (Toronto).
What really matters to the success of a tech ecosystem is:
- Entrepreneurs that do
- Mentors with experience that give
- Capital owners that fund
For Toronto-Waterloo, we should make sure we continue to improve our ecosystem in the right direction. The visible signs will be manifested as:
- Experienced entrepreneurs helping each other at the peer level, without being prompted or rehearsed.
- Exited entrepreneurs re-investing in the ecosystem that fed them.
- Ex-employees of companies starting other startups after gaining experience in previous ones.
- Venture capitalists, funds and angel investors taking risks with local startups.
- Startups attracting capital and mentors from outside the region.
- The region producing (via universities) or attracting (from outside) enough of the right human talent to fuel the growth demands.
- Anyone else supporting the ecosystem following the needs of the above players, and not leading them.
At the end of the day, a tech ecosystem is like nature’s ecosystem. It is full of interdependencies where each organism contributes, interacts with or links to another one. Its members feed from one another, and gradually, the ecosystem becomes stronger and stronger by virtue of its stability via the symbiotic dependencies.
When you have excellent parts, just as when you have excellent ingredients, it becomes more difficult to ruin a bad meal, as it becomes easier to build a great ecosystem.