Tag: silicon valley

Technology’s Ayn Rand fallacy

The tech industry’s love affair with Ayn Rand and libertarianism is a deep contradiction with its roots.

Adam Curtis in his wonderful BBC series All Watched Over By Machines of Loving Grace discusses how Ayn Rand influenced many in the tech industry.

Having been accused of being a ‘techno-utopist’ Curtis’ story is a good reminder of the limits of technology and how the future doesn’t usually turn out how we imagine.

The Ayn Rand influence is worth reflecting on as Rand’s libertarian outloook is shared by many in the technology industry – from the lowest PC technician to the highest flying software mogul.

Rand’s beliefs are best portrayed in her own words, in a 1958 interview with Mike Wallace she tells of how she believes in “challenging the moral code of altruism.”

In Rand’s world view it was the duty of each man to achieve their own happiness, self sacrifice and caring for other is weakness.

That technologists should have those views is curious in that the entire computer industry, the internet and Silicon Valley itself is the result of massive US government spending during World War II and the Cold War.

An more delicious irony is the centre of Silicon Valley, Stanford University, is itself the result of a bequest by railroad tycoon and former Californian governor Leland Stanford.

So self-sacrifice, altruism and government spending forms the basis of the entire modern tech industry – something that computer industry’s libertarians ignore, if they are conscious of history at all.

An even bigger contradiction is the belief that the internet dismantles government and corporate power – one of the lessons of Edward Snowden’s revelations is how comprehensively intelligence agencies monitor online communications.

When the history of Silicon Valley and the 21st Century tech boom is written, one of the compelling themes will be the contrast between the industry’s beliefs and reality.

The final chapters of that history will describe how that contrast between reality and beliefs is resolved.

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London’s quest to be the next Silicon Valley

How London is building its place among the global technology centres

In November 2010 British Prime Minister David Cameron set out his vision for London becoming the centre of Europe’s digital economy.

“We’re not just going to back the big businesses of today, we’re going to back the businesses of tomorrow.” Cameron said. “We are firmly on the side of the high-growth, highly innovative companies of the future.

Three years later London’s tech scene is booming with more than fifty incubators across the city and over three thousand digitally connected businesses in the Shoreditch district.

Building London’s resurgence

Gordon Innes, the CEO of the city’s economic development agency London and Partners, puts this down to a combination of factors including a young and diverse population coupled with being a global media and finance centre.

At the time of Cameron’s speech the cluster of tech startups around Shoreditch’s Silicon Roundabout area was already firmly established and the British government was acknowledging the industry’s successes.

“What we did, what the mayor did, what the government did,” Innes said, was to make sure that we removed as many barriers as possible to let the sector grow as rapidly as possible.”

The value of teamwork

Part of that effort involved business leaders, London & Partners, the mayor’s and Prime Minister’s advisers meeting on a regular basis to thrash out what the tech sector needed for the UK’s tech sector to thrive.

“There were changes to the tax credits for R&D and an important one was the Enterprise Incentive Scheme,” says Innes.

“Linked to that was a recognition of the need to link angels and high net worth individuals to be educated about the sector. It’s not just enough to balance the risk through the tax code.”

Another success for the UK startup sector was the British government introducing an entrepreneur’s visa that makes the country more attractive to foreign founders of startups.

Having built an community of tech startups, the city is now looking at how to grow the sector. “The big priority over the next few years is growing your business in London.” Innes says.

“Making sure you’ve not only have access to angel finance but also to stage one and stage two venture fund capital, you’ve got access to capital markets through new groups on the stock exchange and the AIM market.”

One of London’s big challenges is linking the city’s strong financial sector to the tech industry with a range of organisations like London Angels and City Meets Tech.

Sharing the vision

A notable point about the successes of London & Partners and Tech City UK is the co-operation between the levels of government along with having a shared vision of where the city should sit in the global economy.

Having a unified, strong and consistent vision is probably the best thing governments can offer a growing entrepreneurial or industry hub.

“Government can’t create that but government can certainly support it or, if it’s not careful, can destroy it,” says Innes.

London is showing how to support a growing sector of their business community, other cities need to be taking note how they can compete in a tough global market.

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A startup’s journey – what businesses can and can’t learn from Silicon Valley

There’s a lot small business can learn from the tales of Silicon Valley startups, but not every lesson applies.

Tech Crunch has a fascinating story on the journey of failed startup, Los Angeles based Flowtab that hoped to create an bar tab smartphone app.

In many ways Flowtab is a story of our bubble economy times – a cheap, easily built service that addresses what is, at best, a minor first world problem.

Flowtab failed when it turned out solving that problem was a lot harder than just writing an app, which is something often overlooked in the current startup hype.

However had the timing of Flowtab’s founders been a bit luckier they could have hit the jackpot.

Dave Winer describes the herd mentality of venture capital investors and had the hot trend of the time been bar ordering apps then the Flowtab team could have been one of the beneficiaries of the Silicon Valley business model.

Along with being a historical insight into today’s investment mania, Flowtab’s story is an illustration of how a new business needs to pivot when the original idea turns out not to be as compelling as the founders first thought.

Even when a business does a pivot, it’s not guaranteed the company will survive, but that’s part of the risks in starting a new enterprise, particularly when it’s undercapitalised as Flowtab was.

There’s many lessons from Flowtab’s failure, but not all of them apply to every business.

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Evolving cities and Silicon Valley’s private buses

What do Silicon Valley’s corporate buses tell us about the way our cities are evolving?

One of the phenomenon of Silicon Valley’s development has been the rise of the ‘Google Buses’ – the private services run by the big tech companies to shuttle their workers between home and their workplaces.

The Bay Area’s private bus shuttles are a real time illustration of how regions evolve around industries and economies and how cities and communities are in many ways dynamic, living creatures themselves.

An effect of the Google Buses is that San Fransisco is experiencing a ‘reverse sprawl’ notes Eric Rodenbeck in his Wired Magazine story Mapping Silicon Valley’s Gentrification Problem Through Corporate Shuttle Routes

It’s about more than gentrification as we’ve experienced it thus far: It’s about an entirely reconfigured relationship between density and sprawl, and it’s going to need new maps to help us navigate this landscape.

Driving those buses is instructive as well and Buzzfeed has an interview with an anonymous driver employed by one of the bus companies.  The driver’s tale shows the scale of the phenomenon.

This bus holds 52 people and that is 52 cars that are not on the road in one trip, and we have 70 routes in our system. That’s thousands of cars everyday.

Driving cars is fundamental to the American – and Australian – lifestyle. The modern American city developed around the motor car and that mobility is the defining feature of the Twentieth Century.

So maybe the Google Buses are an early part of the redefinition of our cities to meet the the needs of the 21st Century and cars are not the driving factor.

In this vein, Jarrett’s Walker’s Human Transit blog teases out some of the issues behind these developments.

Finally, this joke is on the lords of Silicon Valley itself.  The industry that liberated millions from the tyranny of distance remains mired in its own desperately car-dependent world of corporate campuses, where being too-far-to-walk from a Caltrain station — and from anything else of interest — is almost a point of pride.  But meanwhile, top employees are rejecting the lifestyle that that location implies.

While I don’t agree with Jarrett’s proposition that the geeks riding these buses want to mingle with strangers given the locations they live – I’d argue they’re attracted to those locations because their peers live there and downtown amenity to good restaurants and bars – he raises a very good point about the mismatch between where the workers and the jobs are.

Jarrett’s point touches on land use zoning and its effects on the evolution of cities. An excellent piece by Alexis Madrigal in The Atlantic tracked Silicon Valley’s iconic techonolgy sites, most of which have been demolished due to the pollution partly caused by zoning requirements for underground tanks.

The issue of zoning is also raised by Rodenbeck who points out that zoning issues with carparks are what has made employee buses more attractive to the giant tech employees.

Zoning different land uses makes sense on one level as no-one wants to live next door to a tannery, heavy metal waste dump or quarry, but there’s a risk with fixed ideas that our cities will become less responsive to economic developments, particularly in an era when people don’t want to, or can’t, dive across town to get to their jobs.

What Silicon Valley’s corporate buses really show is that our cities are evolving around the needs of today, not yesterday. It’s something governments, businesses, investors and communities should keep in mind.

Image of Google shuttle bus stop from David Orban through Flickr

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Can Russia build a Silicon Valley?

Can Russia build its own Silicon Valley in Skolkovo?

Like many other countries, Russia is trying to build its own equivalent of Silicon Valley at Skolkovo on Moscow’s outskirts as Tech Crunch reports.

Across the world governments are trying to find a way to replicate Silicon Valley – from London’s Tech City to Australia’s Digital Sydney, the hope is they can create the same environment that built California’s success.

In some respects, Russia should be well placed to create their own Silicon Valley having had the same massive Cold War technology investments as the United Stated. The old Soviet system also left a deep scientific and mathematics education legacy.

As the Tech Crunch article points out though, the Russian financial and legal systems are working against the nation with most local startups looking at incorporating in offshore havens like Luxembourg and Cyprus rather than taking their chances with the local tax laws and courts.

If finance was the sole criteria for succeeding then Skolkovo would be almost guaranteed success with twenty billion US Dollars of private and government fundiing behind the project.

Funding alone though isn’t enough, and most industrial hubs are the result of happy accidents of transport, natural resources and skills being found in one region.

It might take more than a load of cash for Russia to build their own Silicon Valley, but with a shrinking and aging population the nation needs to find a way to diversify away from simply being an energy exporter.

Image courtesy of Skolkovo Foundation through Flickr

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When Venture Capital meets its own disruption

Falling barriers to entry are disrupting Venture Capital investors as much as incumbent managers.

Tech industry veteran Paul Graham always offers challenging thoughts about the Silicon Valley business environment on his Y Combinator blog.

Last month’s post looks at investment trends and how the venture capital industry itself is being disrupted as startups become cheaper to fund. He also touches on a profound change in the modern business environment.

Graham’s point is Venture Capital firms are finding their equity stakes eroding as it becomes easier and cheaper for founders to fund their business, as a result VC terms are steadily becoming less demanding.

An interesting observation from Graham is how the attitude of graduates towards starting up businesses has changed.

When I graduated from college in 1986, there were essentially two options: get a job or go to grad school. Now there’s a third: start your own company. That’s a big change. In principle it was possible to start your own company in 1986 too, but it didn’t seem like a real possibility. It seemed possible to start a consulting company, or a niche product company, but it didn’t seem possible to start a company that would become big.

That isn’t true – people like Michael Dell, Bill Gates and Steve Jobs were creating companies that were already successes by 1986 – the difference was that startup companies in the 1980s were founded by college dropouts, not graduates of Cornell or Harvard.

In the current dot com mania, it’s now acceptable for graduates of mainstream universities to look at starting up business. For this we can probably thank Sergey Brin and Larry Page for showing how graduates can create a massive success with Google.

One wonders though how long this will last, for many of the twenty and early thirty somethings taking a punt on some start ups the option of going back to work for a consulting firm is always there. Get in your late 30s or early 40s and suddenly options start running out if you haven’t hit that big home run and found a greater fool.

There’s also the risk that the current startup mania will run out of steam, right now it’s sexy but stories like 25 million dollar investments in businesses that are barely past their concept phase do indicate the current dot com boom is approaching its peak, if it isn’t there already.

Where Graham is spot on though is that the 19th and 20th Century methods of industrial organisation are evolving into something else as technology breaks down silos and conglomerates. This is something that current executives, and those at university hoping to be the next generation of managers, should keep in mind.

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And your message is? How Silicon Valley wrote its own history

Is the myth of the altruistic Silicon Valley entrepreneur an example of businesses rewriting history?

Sitting in on the Storytelling and Business panel of the Sydney Writers’ Festival it occurred to me how well Silicon Valley and the tech startup community have crafted an image for their times.

Author of What’s Mine Is Yours, Rachel Botsman focused on the need of businesses to articulate the organisation’s sense of purpose. While this begs the question of what’s the message if the business’ purpose is to enrich their senior management, it is an a good point.

What is a business’ purpose and how do you articulate it? More so, what is the purpose of your industry?

One group of businesses that has done very well in articulating their message is the Silicon Valley tech community who’ve portrayed themselves – regardless of the reality – as being driven by the altruistic aim of changing the world.

Steve Jobs was one of the leaders of this and, while we shouldn’t overlook his talents, he was a ruthless, driven businessman.

On the panel advertising industry elder Neil Lawrence raised Jobs’ ability to articulate Apple’s mission, telling the story of when the Apple CEO was challenged on the ‘Thing Different’ slogan not being good English, he replied “it’s Californian.”

Apple’s success in branding itself as a visionary, creative company – and Google’s image of ‘Don’t Do Evil’ – show how it’s possible to create an image for an organisation, an industry or even an entire industry.

In reality, Silicon Valley and the tech industry are as full of snake oil salesmen, mercanaries and paper clip counting corporate bureaucrats as any other sector, but legends have been built, and continue to be built, on the myth of  selfless entrepreneurs sacrifice all to make the world a better place.

Contrasting Silicon Valley’s success with the Australian experience was interesting, Botsman was scathing about the ability of Aussie managers in telling the story about their businesses finding most of them have lost her by the second slide of their Powerpoint presentation.

We shouldn’t get too hung up though about the nobility of telling a business’ story, Shehan Karunatilaka, former copy writer and author made the major point about business communications “story telling in business is about shifting product.”

He went on to describe the tragic career path of the advertising copy writer who comes into the ad industry believing they are a world changing artist and ends up being burned out.

“you are not an artist – you are a mouthpiece for businesses” said Shehan.

The truth is most of us in business are not artists, some parts of our work may involve creative skills – like copy writing, design or financial engineering – in reality most of us are there to make a decent living, if not a fortune.

Silicon Valley’s mythmaking shows how you can cover the mundane truth with a noble, a constant narrative which has  allowed ruthless businessmen like Steve Jobs and Mark Zuckerberg to portray themselves as selfless visionaries rather than the modern equivalents of  John Rockerfeller, Cornelius Vanderbilt and other 19th Century robber barons.

This is possibly the greatest message of all in business communications – history is written by the victors.

When you’re winning in your industry, you get to write the story.

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