Vijay Anand | The Startup Guy.

The Valley is just one Element.

Posted on: March 6, 2008

What makes the american economy enviable. Most folks who are entrepreneurs, technologists and venture capitalists seem to say “Its all about the silicon valley”. I think we are missing some very crucial elements there.

A conversation came up yesterday as to what inspired the valley to what it is today. Well, the truth of the matter is that, the valley is built on billions and billions of dollars of military research money. During the second world war and during the cold war with USSR, everything that was ever conceived and experimented on, was happening out of the bay area. The father of the silicon valley, if you ever get to hear about his name Fred Terman, was one who pretty much headed most of the defense initiatives for the US. [Steve Blank talks on the same Topic]

If you look at the technology s-curves of what has been the predominant business of the valley, it started off with Defense work, followed by semiconductors, followed by huge computational devices, followed by personal computers, followed by the internet. In each of these episodes, there were mammoth organizations that were created; Lockheed Martins and its ancestors, Intel, Dell, Microsoft, Yahoo and now Google. They fit the waveform, almost perfectly. There cant be another google, but there will be another wave and there will be another mammoth which will come out of that – if the US economy can sustain itself till then.

But think about it. All of this is sheer technology. Is technology, or techno-entrepreneurship as they call it, the only form of entrepreneurship? Actually, that’s the interesting part. Its not.

While the valley focused on technology and pushing it to the next level (essentially since more cycles meant more great companies and products and markets), technology alone doesnt fill all the gaps. What is often neglected are centres such as the east coast of the US, like NY which is not only the capital, but also the media giant for most of the english-speaking world. Newyork is as cash-rich as the valley in every aspect, and has more than its share of thriving entrepreneurs, just dressed differently. The fun part is that, unlike the short cycles of the technology-centric hubs where companies come and die before they get a chance to mature, because their time has run out, cycles are longer and more robust with economic and media centres.

Why is this important? It is crucial to understand this, because unless we do, we’ll constantly be talking about and dreaming about creating more engineers, Phds and smart businessmen. The world of media, economics, and markets will be opportunities lost for a thriving and growing market like India. It also comes down to the matter of allowing everyone to be participatory. I am realizing that because arts and science students & professionals think that they have fewer options (the best being working for call centres), they are much more daring and entrepreneurial than MBA graduates and engineering students. The truth is, we havent yet scratched the surface of the other sectors apart from IT. We get blamed for it, and I have to say that the naysayers aren’t all together wrong with their accusations.

If we are looking at a resilient economy, and looking at entrepreneurs and SMEs to be at the bottom and middle to strengthen and stabilize it, we need to be firing on all cylinders. And that will only happen if we focus on all key areas, that essentially forms the basis of what we call as modern civilization. As I said before, the valley and its model is just one part of the equation.

I had this fabulous discussion with Professor Veeravalli, who is a director at the Great Lakes Institute of Management yesterday on this topic. I wish I met more sharp folks like him, more often.

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3 Responses to "The Valley is just one Element."

Hi!! Thats an interesting take. i think it would be very useful for the techies and business professionals on SiliconIndia.com site to read this and comment on their take on your arguments.

There have always been a far more developed, other than IT, startup ecosystem and entrepreneurship models existing in several pockets in India. Take Tirupur for hosiery and woven garments, Surat for Diamond cutting, Tourism in Kerala, cottage manufacturing (almost anything eletrical items to auto components) in Ludhiana and cattle and poulty in Andhra Pradesh.

Not many would’ve noticed because they are way too focused to blog about it.

Krishna, Yep what they call as Clusters. You are quite right in drawing the parallel there.

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