Telegraph.co.uk
Friday 14 March 2014
What I learned from the new masters of the universe in Silicon Valley
Technology firms in California have a 'who dares wins' attitude that is central to their success
Most of the world's biggest technology companies hail from Silicon Valley Photo: AFP
Fearless. That’s the aura of San Francisco and Silicon Valley. And that one word has acted as a magnet for people, capital, skills and ideas on a scale that is jaw-dropping to the new arrival.
I have spent the last week meeting and interviewing British tech entrepreneurs
living and working here. There are up to 250,000 Brits living in the Bay
area and they are helping to build nothing less than a new world capital for
the confident.
Take Michael Birch, the understated founder of Bebo, who exited for a cool $850 million and put it to me like this,
“There is a fearless belief that you can achieve anything here.”
Huddle’s Andy McLoughlin came to the Valley on the mantra of “Go Big or Go Home” and he told me that, “Everyone here is focused on making a world-beating company. We came out here in 2007 and you could immediately feel the palpable energy.”
In the Valley, they tend to not even use the word entrepreneur. They far prefer the term "founder".
Here, the founding of a business is the embodiment of the American Dream, the most economically exulted and commercially celebrated act of creation.
Today’s generation of Silicon Valley buccaneer is not part of some short-term bubble. Their time has come and the future is the name of the game.
And, while some in the commercial world view the pace of change as a danger to be checked, on the West Coast, business has its foot to the floor to speed things up.
There is a fixation among Valley entrepreneurs with confronting the impossible at every turn.
Ebon Upton, the Raspberry Pi founder, highlights the “brain drain to the Bay and its ability to suck in talent” as a major part of its competitive advantage.
That accumulation of the world’s talent builds a velocity of creativity in the Valley. In the reception of one corporation I visited is the Einstein quote: “Creativity is contagious. Pass it on.”
Think driver-less cars are a thing of the future? Here the expectation is that everyone will be using them on Californian freeways within ten years.
Here Apple is building a new headquarters that, when completed, will be bigger than the Pentagon. It’s a place where corporations will soon have the commercial firepower of nations.
Silicon Valley is on a scale that I found almost unimaginable. It is a river of money flowing 1,800 square miles with over 20 of the Fortune 500 based in the Valley alone. US venture firms invested $7.8 billion in 1,005 start-ups in the third quarter of 2013. Nearly half that money went to Valley companies.
“The thing that really makes Silicon Valley impressive is the reinvestment in new companies,” says Huddle’s Andy McLoughlin.
Only when you are here can you can see why WhatsApp went for $19 billion.
For Silicon Valley, the recession is not only over, but many argue that it never even arrived.
It is a muscular and mainly masculine world brimming with confidence. It is one where youth is the cult to be celebrated. The average age of a founder is just over 33 years old.
And, while some point to issues of arrogance and naiveté, for the most part there is a more functional relationship with age. John Reynolds, of the language technology business Swiftkey, said,
“People in their 20s have no clue about what can’t be done, they just set about solving the problem.”
And of course they often do precisely that.
The Information Exchange
The focused role of the university is crucial to the success of the Valley, explains Birch. “If you’re at Stanford you are very likely to work for a start-up and everyone knows it. All the firms want to hire the best grads from Stanford.”McLoughlin speaks of the pivotal role of “universities sponsoring innovation and supporting it with cash.”
Reynolds believes that the universities in the Valley have created a massive information exchange.
He believes that the role of UK universities in seeding start-ups has been significantly improving but believes that there is a long way to go.
The collective knowledge of a Valley feeds the shared feeling of having a stake in the birth of new technologies. This is the era of the innovator.
That is why, in this part of America, they do not need to worry about glamorizing the image of science to attract more young people. And that culture is spreading.
The number one rated job in the US right now is the software engineer. Physics is not for geeks, it is a rock star degree.
Silicon Valley is a destination rooted in a rejection of knowing your place. It’s about a deeply disruptive generation of founders.
Central to this is the rite of passage that failure provides. Not something to diminish confidence but to build it.
Your first failure is called the ‘Million Dollar MBA’. A valuable and sometimes essential process of learning and life experience.
Eben Upton contrasts “the fetish of failure here versus the idea that it is shameful to fail in the UK.”
Birch speaks of “a great forgiveness of failure... in the US they’d ask what did you learn from that? ... in the UK they would see it as proof that it was a bad idea.”
“Here you are with very successful people so you strive to be as successful as your peers."
Today the appetite for growth is ravenous. That attitude is fearless, the optimism palpable.
This is a part of the world that proves the mantra of the SAS.
Who dares wins.
Michael Hayman is the co-founder of campaigns firm Seven Hills
