/Why Silicon Valley is the best place to start up companies?

Why Silicon Valley is the best place to start up companies?

I have spent two months in Silicon Valley trying to understand what goes on in this place and why so many Internet startups are born here. I have talked to many people, I have tried to live as a normal Valley person and have also experienced the flow of energy that lives here. I know many places on Earth would love to know the secret of this area in order to create the new Silicon Valley. But is there a secret?

The answer is no. There is no single thing that makes this place so special. Maybe Stanford University has a lot to do, but you can not move a whole university somewhere else and its strength has a lot to do with its presence in the heart of Silicon Valley. What this place has is a great ecosystem that helps innovation flow constantly.

These are some of the reasons that explain what happens in Silicon Valley:

1. VCs (money), lawyers and technologists are constantly getting together in many different ways. Yes, corporate lawyers are fundamental here. Technologists are the big innovators. You can not create anything new in Silicon Valley without a passion for technology. And these people have it and sometimes they even know how to make money out of it, which is just the point in which a new startup can grow. The good thing is that at that point in time they will probably have a lawyer and a VC really close.

2. Being an entrepreneur is very easy in Silicon Valley. There are many people like you and the economic system favors entrepeneurship. As an example, you can freely lay people off in California, while in Europe you have to really think twice before hiring anybody, as it is really expensive to lay him/her off. At the same time, while in Europe working in a startup is not so “cool”, here it’s just what everybody wants to do. And this ecosystem is attracting entrepreneurs from all around the world.

3. Love for risk. Everything here encourages people to take risks and this same risky behaviour pushes everybody else to just be like that. Risk is part of Silicon Valley’s culture. And risk is fundamental in high tech, as you need it in order to be the best in your field. As of risk and failure, it’s very interesting to see this video of Noah Kagan, who has a very interesting record of failures and is quite satisfied of what he’s learnt this way:

4. High goals. It’s pretty much related to risk taking. People here are very ambitious. Everybody wants to make “the next thing”. And everybody knows that focus is fundamental in order to find a new market in which they can become leaders, as it is the leader the one who gets 80% of the value of every market. On the opposite, most entrepreneurs in Europe are so conservative that our main goal is to make a life out of our business. Fast growth is encouraged. Not because of some type of short-term thinking but because it’s the only way to avoid competitors becoming bigger than you and to get the best exit (sale or IPO). Being fast is once again a clue in making money out of innovation.

5. Nature and weather. Silicon Valley is one of the best places on Earth to live. Its weather (dry but not too warm) is just great. The surrounding nature makes this one of the most beautiful places on Earth. It’s just very easy to convince people to move here.

6. Talent. Where on Earth can you find the most talented engineers and product designers? Nowhere. It’s true they are very expensive, but they are also pretty flexible and they don’t care working in a startup. They know that’s going to be their best opportunity to become rich.

7. Mix of cultures. Silicon Valley is a place in which you don’t feel strange being a foreigner. Why? Because 50% of the people are from abroad. There are plenty of Indians and Asians working on IT companies in Silicon Valley. Many of these foreigners (Sergey Brin himself) have become succesful tech entrepreneurs.

If you want to know more about the history of Silicon Valley this video is just great: