Think of watches? Think Switzerland. Think of fashion? Think Milan. Think of machine tools? Think Germany. Think of start-ups? There are no prizes for guessing it’s Silicon Valley.
Silicon Valley, the hub of innovation and the biggest start-up hotspot on the planet has remained unparalleled. Despite many attempts to recreate the success story (even by its own creators), it still remains a distant dream. Is the Silicon Valley story a one-time event in the history of mankind?
The question arises because Prof Frederick Terman, who is known as the father of Silicon Valley, himself tried to recreate it in New Jersey, after his retirement from Stanford, which failed simply due to lack of industry support. Renowned Harvard professor Michael Porter’s suggested model of setting up technology parks around universities failed as well. The attempts were not limited to the US alone. Kochi has a start-up village and Bangalore has been attempting for a long time to become a major start-up hub. This certainly points at one direction – it isn’t really easy replicating Silicon Valley. What is it that makes Silicon Valley so unique?
Here’s a look into the many things that made Silicon Valley what it is and this would lead to the insight we are searching for, along with the many wannabe Silicon Valleys:
Overlapping Associations
The three major wings that co-existed in perfect measure and drove success were: academic institutions, the government and the investors. For a start-up hub to thrive and grow successfully, it is important to have the perfect mix of these three. Academic institutions nurtured innovation through their technical expertise and support through facilitating research. The Government provided the infrastructure needed and its policies were industry-friendly. An investor ecosystem that boosted innovation and entrepreneurship, played a major role in shaping the valley.
But, in the several attempts to replicate Silicon Valley, where the Government, the academic institutions and the investors came together, but still couldn’t succeed. Why?
It’s because, beyond these three basic factors, it was Silicon Valley’s philosophy and culture that was so unique in many ways that powered its success engine. This culture and philosophy was clearly missing in the many attempts which is what is critical to success.
Philosophy of Business
Openness: Silicon Valley was open to new people and outsiders were always welcome to join and operate. This sheer diversity in the mix adds a lot of new insight and explores new possibilities to explore. If you want to be a part of creating the next Silicon Valley, ensure that you embrace a culture of openness and diversity that would steer your way to success.
Learning: Hewlett & Packard as a company that made electronic test equipment started in a garage. It has come a long way to what it is today, a transnational company with a wide range of products and services, not restricted to electronic test equipment alone. Learning from its own success stories and more importantly failures has helped in great measure, in scaling it to great heights.
Sharing: Silicon Valley companies never shied from sharing technical know-how or the other aspects of running a business. They strongly believed in competing and co-existing, by sharing knowledge and insight, which helped them grow collectively.
Co-evaluation of ideas: Innovation thrives in a culture that allows idea-sharing and evaluation. This is what Silicon Valley was all about. It was practically ideas that translated into companies and revenues and profits.
Flexibility: Most Valley companies embraced a flexible culture. A rigid, regimented set-up is best-suited for a mechanical environment and deters creativity. In an environment where innovation and new ideas were core criteria for success, flexibility became a key ingredient.
Mutual feedback: Feedback, contrary to common perception, isn’t one way. Bottom-up feedback is as important as top-down feedback as it gives a perspective on operational level insight. This solves a lot of practical everyday issues in a smooth manner and creates a win-win situation that’s essential for innovation.
Fast reflexes: Most of the successful Silicon Valley companies adapted themselves quickly to change and knew the knack of turning a challenge into an opportunity. Swift reflexes not just help in keeping competition at bay but also help in exploiting new opportunities much ahead of time that can fast-track the growth curve.
Speed and edge in sensing and pursuing new ideas: A constant approach to look for new ideas and opportunities and jumping in first to exploit it to its fullest extent is one of the key elements constituting success. Companies that impatiently pursue new ideas always gain an edge.
Culture and Vision: Culture is a major aspect that sets the Silicon Valley apart and one cannot miss this aspect in an attempt to rewrite this success story.
Knowledge Intensity: There’s nothing more powerful that knowledge and the Valley companies have mastered this art of learning, managing and translating knowledge into products that make revenue. The more intense the knowledge is, the better.
Workplace Mobility: It is very difficult to determine the growth rate of companies and it is hence very important to have a high-quality mobile workplace. This facilitates easy relocation depending on the growth of the organisation.
Result-Orientation: Unlike established companies, the runway for start-ups is less and it is hence important to achieve results in the shortest time possible. Building a highly focussed, result-oriented team is a sure shot way to achieve success.
Rewards risk-taking and idea failure: Disruptive innovations happen in a climate of high risks. To mitigate the fear of failure and encourage taking calculated risks, rewarding risk-taking with a commensurate incentive helps a great deal. Failure is never frowned upon and the motto is ‘Fail fast, Fail cheap’.
Open Business Environment: Co-existing with competition is a major trend that one can observe among Silicon Valley companies. This breeds innovation and also drives organisations to maintain an edge through innovation.
Collaboration: Collaborating with Governments and NGOs helps a great deal in exercising social responsibility thereby giving a bigger purpose for companies to exist that transcends beyond revenues and profits and other transactional things. Brand image boosting is another perk of these collaborations.
High Quality Life/Specialised business: A high quality life is what everyone aspires for. When that is a given, that helps directing all the focus to the mission at hand and reach newer levels of specialisation in the business.
You have got to have these in you if you are to emulate the success of Silicon Valley. Feel free to share your thoughts on what you think would help in emulating the Valley here in India.