Thursday, June 15, 2006

Guy Kawasaki on creating the next Silicon Valley

In what is evidently a completely random coincidence (at least according to Guy), ex-Apple tech/VC-luminary Guy Kawasaki has written his own blog post on what it takes to create the next Silicon Valley just a few days after fellow tech-blogger Paul Graham wrote on the same topic - which I commented on here and Joel Kotkin responded to in a 3-part series on the new Inc. blog (part 1, part 2, part 3). Here's a collection of random excerpts/points and my thoughts on Houston:
  • "Beautiful, but not gorgeous, surroundings." Although I myself find Houston (aka "Tropical Texas") moderately attractive, I think the consensus is that we don't measure up so well here. But wait...
  • "If a place is gorgeous, like Hawaii, then the distractions are sometimes too great. Some place in the middle is what’s ideal. At the very least, it would be good to have a lousy season so that the company can be extremely productive part of the year." I think this is mainly a nod to Microsoft in Seattle, where people have commented that the rain keeps the programmers indoors and focused. So, one lousy season - check for Houston. Can you guess which one?
  • Paraphrasing Guy: high-housing prices to discourage family formation (which discourages long hours and risk taking) and overcrowding to encourage envy, critical mass, and a desire to get rich and leave. These two are his most whacked-out criteria, and it seems like some kind of cause-effect logic error where he assumed those characteristics must be helpful because SF/SV and Boston have them, and they're tech hubs.
  • Absence of multi-nationals to suck up your talent. Definite problem for Houston: #2 city for Fortune 500 HQs, not to mention the majors with huge offices here but not their headquarters: Shell, Exxon, Chevron, BP, etc.
  • "If a region has to do nothing more than stick a pipe in the ground, throw a net in the ocean, clean beaches, or manage a natural seaport, it’s going to be tough to be the next Silicon Valley." A couple more knocks for Houston, although we don't physically stick pipes in the ground here anymore, nor is our port natural.
  • "Focus on educating engineers. The most important thing you can do is establish a world-class school of engineering. Engineering schools beget engineers. Engineers beget ideas. And ideas beget companies. End of discussion." Agreed. Rice is great but undersized (compared to Stanford or MIT), and I've heard good things about UH's engineering school, but I don't think we're there yet.
  • "You need to encourage smart, hungry, and aggressive people to immigrate from around the world. And to do that, you need good schools." Check on the former, partial-check on the latter.
  • "Here’s a dirty little secret: Silicon Valley is more a state of mind than a physical location" I think most people would agree that Houston has a somewhat similar entrepreneurial/wildcatter business culture - we just need to transfer it into the tech universe.
Most of his other observations are in a similar vein to Paul Graham's essay, and my response stays the same, including my general optimism for Houston's potential.

I'll wrap up with a couple of his most interesting quotes from the beginning... my knowledge, there has never been any “master plan” for the creation of Silicon Valley. What stands before you is an amalgamation of hard work, luck, greed, and serendipity but not planning. Indeed, Silicon Valley has probably worked because there was no plan. (Houston - check)
...and the end...
There’s one more thing you need to do: Aim higher than merely trying to re-create Silicon Valley. You should try to kick our butt instead. That’s true entrepreneurship.
Hear, hear!


At 6:55 AM, June 16, 2006, Blogger John Whiteside said...

Honestly, I think some of Kawasaki's suggestions are kind of silly. And they actually contradict what happened in the Santa Clara Valley - when Silicon Valley got going, they didn't have outrageous housing prices, they had an easy resource-based local industry (farming), and they never really actively encouraged people to go there.

Which speaks to an important point: the Valley developed organically, because a few smart people started companies there, had some success, and things snowballed. That's not helpful to other regions seeking to build a high-tech business base, but that is precisely what happened (much as we've seen in Research Triangle and Boston).

Having done some work on these issues professionally, I'd observe that people are a bit too obsessed with Silicon Valley. It may be a model of what a region wants to be, but because it just happened on its own, its lessons for others are limited.

At 8:42 AM, June 16, 2006, Anonymous Anonymous said...

I would disagree with the remark that the Valley developed organically. It was started by Stanford University. They owned the land and leased it to high-tech companies, and used the revenues from the leases to fuel the growth of the university.

At 11:11 PM, June 17, 2006, Blogger Adam said...

Let me impishly ask everybody "What was the most innovative, fastest growing, economically vibrant city in America from 1919 to 1929?"

My guess is "Detroit".

Maybe there's a "Silicon Valley and its discontents" topic waiting for some exploration :)


At 3:54 PM, June 19, 2006, Anonymous Anonymous said...

My former stomping grounds of eastern South Dakota learned the hard way when it became too reliant on one company (Gateway) to steer them in the direction of tech Shangri-La. There is still about 300K square feet of call center space, in a metro area known historically for its down-times, that has not been filled since late 2003.

Now, South Dakota is focusing it's energy (pun unintended) on Ethanol production. Yeah, it may be more toward their original economy (agriculture), but it's still too dependent on the whims of someone else's market.

Brad S

At 10:53 PM, June 19, 2006, Anonymous Anonymous said...

We're not going to become the next silicon valley - that much is certain. We do not have the kind of appeal that can lure companies that can locate anywhere. What we could do is try to make the city less unappealing - in other words, remove some of the warts - so that we at least don't drive away companies that might otherwise consider locating here.

I'm thinking specifically of billboards. Everyone who cares about Houston should take a long drive around the country, driving down the freeways of different cities, and then after a few days of adjustment, drive back to Houston and see how it looks. The reason being that you becomes conditioned to your own scenery, and only by spending some time away and then coming back can you see how it looks to an outsider.

The scenery in Houston is atrocious indeed. It gives the whole place a seedy feel that no other attributes - museums, stadiums, skyscrapers, etc. - can undo. I'd compare it to a woman who goes to a party wearing a beautiful dress, but with a huge ketchup stain on it. The dress might be otherwise lovely, she might have a really nice necklace or ring, but as long as she has that huge ketchup stain, the rest isn't going to matter. Right now Houston has some huge ketchup stains that it needs to fix.

At 11:21 PM, June 19, 2006, Blogger Tory Gattis said...

I don't know the exact details, but my understanding is that Houston has banned new billboards and the old ones are going through a 20yr (?) depreciation until they can be ordered removed without compensation. I think their life expires reasonably soon, within a few more years. If anybody else knows details on this, I'd love to hear 'em.

At 12:50 PM, June 20, 2006, Anonymous Anonymous said...

To start the nex Silicon Valley or major research area is simple-- you just need amazing universities next to each other.

The 3 biggest science/tech hubs in the US are (in no particular order)

1. Bay Area (Berkeley, Stanford, UCSF)

2. Boston (Harvard, MIT, BU, BC)

3. Research Triangle (Duke, UNC, NCSt)

Washington DC, NYC, Philly, San Diego, Austin all do quite well also because of their numerous quality schools or research institutions (ie NIH).

Unfortunately Houston does not have the educational infrastructure to match up with these cities, even though the universities and medical schools in Houston are quite good, they are generally not considered in the national elite unfortunately.


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