how silicon valley became a special place
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How Silicon Valley Became a Special Place for Innovation
and Entrepreneurship
Richard Allan HorningSNR Denton US LLP
Silicon [email protected]
SNR Denton
I HELP THE TECHNOLOGY
STARTUP GROW FROM THIS
TO THIS
INNOVATION
Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced.
(Peter Drucker, 1985, Innovation and Entrepreneurship)
• Perceived Opportunities
• Culture of Risk Takers and Respect for Failure
• Support Infrastructure
• Propagation of Knowledge and Skills
• First Class Educational System Encouraging Entrepreneurship
• Capital and Liquidity
• Rewards and Honors
• Repetition and Reinvestment
ELEMENTS OF AN
ENTREPRENEURIAL ENVIRONMENT
THE INVENTION OF SILICON VALLEY
Don Hoefler, “Silicon Valley USA”, Microelectronic News, January 11, 1971
EARLY OBSERVATION OF
THE OPPORTUNITY
“In the hands of an enterprising people, what a
country [California] might be” -- Richard Henry
Dana, Jr., Two Years Before the Mast (1840)
A VAST WASTELAND
“A village of 600 to 800 inhabitants … with thousands of ground squirrels burrowing in the plaza” – description of San Jose in 1846 when the population of all of California was 7,500
“Not a single modern wagon to be had …, nothing but the old Mexican cart with wooden wheels, drawn by two or three pairs of oxen yoked by the horns” -- Lt. William Tecumseh Sherman, reporting on Monterey in 1847
JANUARY 24, 1848
Eureka !
“Gold Mine Found”, The Californian, March 15, 1848
“California, no doubt, is rich in mineral wealth; great chances are here for scientific capitalists”
CALIFORNIA IN 1865
• Population has soared to 365,000
• Wheat crop more valuable than gold
• Manufacturing revenue $20M greater than gold mined in foothills
JESUITS ARRIVE
1849
SANTA CLARA UNIVERSITY
FOUNDED 1851
THE BIG FOUR
Crocker, Hopkins, Stanford, Huntington
OPENING THE WEST
1863 - 1869
THE FARM
THE TECHNOLOGY STARTUP
1893
EARLY WI-FI
POULSEN WIRELESS /FEDERAL RADIO
SPIN OFFS
• Magnavox
• Fisher Research Labs
• Litton Industries
• Lee de Forest
• Frederick Terman
The “Godfather” of the Valley
THE LAND GRANT SCHOOLFounded 1855
BERKELEY CYCLOTRON(1932)
CROCKER RESEARCH LAB
WHERE IT ALL STARTED
TV
THE IMPORTANCE OF NETWORKING
“In the early days of the semiconductor industry there were certain places that everyone frequented and the standing joke was that if you couldn’t figure out your process problems, go down to the Wagon Wheel and ask somebody.”
Annalee Saxenian, Regional Advantage (1996), p. xi
THE IMPORTANCE OF
NETWORKINGWoodside CA
NETWORKING OPPORTUNITIES
THE ROLE OF PROXIMITY
IN INNOVATION
“To the extent that product and process
innovation is based on new ideas and that the creation of ideas is a social process involving discussion, then geographic proximity is important in innovation”
Michael Best, The New Competition: Institutions of Industrial Restructuring (1990), p. 235
SHOCKLEY SEMI-CONDUCTOR
THE TRAITOROUS EIGHT
THE GOLD RUSH LEGACY
Business & Professions Code Section16600
“Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or
business of any kind is to that extent void.”
COOPERATIVE COMPETITION
EXIT POSSIBILITIES
EXIT POSSIBILITIES
EXIT POSSIBILITIES
WHY SILICON VALLEY SUCCEEDED
• "It's the regulatory environment, the cultural attitudes, the social and professional networks that connect people. It's the attitude toward failure - how you deal with that. Those are things that are much harder to change than it is to build
up the research facilities."
Prof. William Miller, Stanford