Month: June 2006

In addition to Paul Graham’s take and David Janes’ take, be sure to read this blog entry by one of my tech evangelist role models, Mr. Guy Kawasaki. He wrote an article titled How to Kick Silicon Valley’s Butt, which are three lists of ways to turn your own town into a high-tech hub:

Stuff You Can’t Do Jack About

• Beautiful, but not gorgeous, surroundings. The surroundings shouyld be beautiful enough to attract smart people, but not so beautiful that they’re always distracted from work.
• High housing prices. An interesting argument: “If houses are cheap, it means that young people can buy housing sooner and have kids. When they have kids, they can’t take as much risk and don’t have as much energy to start companies. (I have four kids—I barely have the time and energy to blog, much less start a company.) Also, if houses are cheap, it’s easier to ‘make it big,’ and you want it to be hard to make it big.
• Cities, crowds, and high- if not over- population. Cities and crowd bring out jealousy, which in turn breeds competition (by the way, this is a good thing). Cities also bring people together to work, face-to-face. As Guy says: “People can’t telecommute to a startup. People need to get together to bounce ideas off one another, argue, and cajole.” He also makes this interesting point: “Also, over-crowding gives people something to shoot for: that is, achieving success so they can get out of there.”
• Absence of multi-national companies—especially the finance industry. “If your companies have to compete with conglomerates or banks like Goldman, Sachs throwing money at people, it’s going to be hard to get anyone for a startup. Pity the startups in New York, London, and Singapore. Come to think of it, how many tech success stories have come from these cities? There is intense competition for employees in Silicon Valley too, but we’re using the same currency: the upside of equity, not high starting salaries.”
• Life-threatening enemies. Guy writes: “Israel is a speck of dust that has few natural resources, and it’s surrounded by real enemies. And yet the country has produced some of the world’s best technology companies. There’s nothing like a life-threatening environment to get the entrepreneurial juices flowing, I guess.”

  I have two questions:

  1. Who are Silicon Valley’s life-threatening enemies? Microsoft?

  2. Can Toronto count the 17 people accused of being jihadis planning to detonate a bomb in Toronto and behead the Prime Minister?

Stuff That You Can Do Jack About

• 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.”
• Encourage immigration. This is going to be a sore point at this time, as a number of reactionaries seem to be recoiling from immigration and denouncing multiculturalism as a result of the “terror 17” here in Toronto.

  Guy writes “If I had a choice between funding someone from a family who moved here from Vietnam whose father and mother run a 7-Eleven versus a descendant of a Mayflower passenger with ‘IV’ in his name, I’ll give you half a guess as to my preference. You need to encourage smart, hungry, and aggressive people to immigrate from around the world. And to do that, you need good schools. To mix several metaphors, if you want to cover your ass, you need to open your kimono because trust-fund kids don’t make good entrepreneurs.”

  I will back Guy up by asking if you recall Principal Skinner’s line from The Simpsons: “For a school with no Asian kids, we put on a pretty decent science fair.” To borrow another Simpsons quote: It’s funny because it’s true.

• Celebrate your heroes. “Every region needs its heroes. These folks take role modeling to an extreme; they have names like Steve Jobs, Bill Gates, Ted Turner, Steve Case, Anita Roddick, and Oprah Winfrey. Kids need heroes, so that they can say, ‘When I grow up, I am going to be the next Steve Jobs.’ In many places, a successful person is pulled back down because of jealousy. Sure, there’s jealousy in Silicon Valley, but our way of dealing with it is to try to outdo the person, not pull her back down.
• Forgive your failures. “There is no better place to fail in the world than in Silicon Valley. (Where else can you get your clock cleaned by Microsoft and become a venture capitalist and top-ranked blogger?) Indeed, some people here have made a career of failing. Some of this is cultural—failing in Europe or Asia casts a cloud over one’s family for generations. Not in Silicon Valley. Here, it doesn’t matter (within reason) how many times you fail as long as you eventually succeed. So many entrepreneurs who failed went on to create massive successes that we’ve learned that failure is a poor predictor of future results.”
• Be logical. “A region should use it’s natural, God-given advantages. For example, aquaculture in Hawaii, security technology in Israel, alternative fuels in the Midwest, and solar power in the Sun Belt. There’s a reason why the best woolen sweaters come from Norway and the best Aloha shirts come from Hawaii.”
• Don’t pat yourself on the back too soon. If you are involved in any way in try to turn your city into a tech hub — ICT Toronto, I’m looki’ right at you — read this point: “Many regions declare victory because Microsoft, Sun, or Google opened a branch office. These branch offices don’t hurt but don’t kid yourself into thinking that the existence of a branch office means that you are now a tech center. Truly, a region is a tech center when its companies open branch offices elsewhere, not when tax incentives and kowtowing got a company to open up a branch office in it.”
• Be patient. “There is nothing short-term in these recommendations. I estimate that creating something that begins to look like Silicon Valley is at least a twenty-year process. This is certainly longer than most politician’s reign–hence the challenge of doing the right things for the long run.”

Stuff You Shouldn’t Do Jack About

It’s my mild libertarian streak that leads me to concur with Guy: “The short answer is that the government should not do much except provide more funding to the engineering schools. Unfortunately, that probably won’t seem like enough to most people.”

• Don’t focus on “creating jobs.” “The thinking should be: ‘If this company kicks ass, then it will survive and grow. If it survives and grows then it will create jobs.’ So let startups focus on kicking ass and the jobs will come naturally-or not.”
• Don’t pass a special tax exemption. My accountant Syd always tells me that there’s a good side to paying lots of taxes — it means you’re making lots of income. Guy kind of sounds like Syd here: “There’s an assumption that tax benefits for investing in startups encourages entrepreneurship. I disagree; I think it mostly creates sloppy decisions by unsophisticated investors and crooked ones by others. Indeed, the unstated (and perhaps unrealized) goal of a sophisticated investor is to create, not avoid, tax liabilities. Nothing would make me happier than having to pay $100 million in income taxes. I would hand deliver that income tax return to the White House.”
• Don’t create a venture capital fund. “The thinking here is that a government created venture capital fund would kickstart entrepreneurship because of the influx of money. However, if there’s one thing you can depend on in venture capitalists, it’s greed. If you show them good engineers with good ideas for good companies, they will appear by (private) plane, canoe, dogsled, and camel. Such a region doesn’t need to create a fund. A supply of capital does not create demand from entrepreneurs–at least not the kind of entrepreneurs that you want.”
• Don’t provide cheap office space and infrastructure. “The rationale is that if entrepreneurs had office space, photocopying machines, T1 lines, and adult supervision, they would be successful. I can’t think of a case where cheap space, incubation, whatever caused success. This isn’t to say that there haven’t been successful companies from incubators (eBay is arguably one), but the key point is to determine the actual causes of success. Cheap space, etc, can’t hurt, but I’d buy engineering professors, not crappy buildings. Just because there’s a cheap building doesn’t mean you should create an incubator out of it.”

As always, discussion is welcome and encouraged. Comment away!

I got a lot of interesting responses to the How to be Silicon Valley article I wrote last month in the comments to that article, via email and in real-life face-to-face conversation. The article pointed to Paul Graham’s article of the same title, in which he talked about how it might be possible for a region to recreate the conditions that made Silicon Valley what it is.

I thought I’d pick up on that topic again, since it’s something that’s near and dear to my heart as a programmer, a technical evangelist, a proud citizen of Accordion City and (ugh) a marketer.

David Janes’ Take

David Janes is a developer in Toronto who’s worked with the likes of Algorithmics Incorporated and is now part of BlogMatrix, a small company that develops a platform that allows people to create dynamic websites using structured blogging, podcasting, support for all sorts of data formats and internationalization. In his blog, Ranting and Roaring, he added some points of his own to Paul Graham’s recipe for Silicon Valley:

• Big Tech: there’s lot of big tech companies in Silicon Valley. The Old West wasn’t all cowboys, it was mostly ranchers. People need somewhere to go that will pay them when their first, second and third startups fail. Startups need a place to draw employees from, once they get past the first dozen.
• Geography: south of San Francisco, it’s easy to get from anywhere to anywhere along the 101, 280 and 82. San Francisco is a traffic dead end, which is why we here a lot more about the strip malled Mountain View than the more beautiful (as I remember it) San Rafael.
• Age integration: one thing I’ve noticed at conferences and camps I’ve gone to in the Bay Area is age integration. It’s not weird or unusual to be 40 years old, or 50, or 30 or 60. You are what you can do, not what you look like.

I would also add the CalTrain to the list of routes along the San Francisco-San Jose axis. I much preferred riding the CalTrain and hacking away on my laptop, catching up on my email or reading than fighting my way down the 101 (or more often, sitting still in the 101 in stalled traffic on a warm afternoon). I’d have to think about a little bit more about the Toronto-and-area geography before commenting on it more, but I think I can say that we do a better job with public transport than the Valley does; California is heavily into their car culture.

I’ll talk about Big Tech later as well.

As for age integration, that’s something we’re going to have to work on. Like David, I also observed while living in San Francisco that the Valley has its share of eminences grises — old-timers who date back to the glory days of PARC and the Homebrew Computer Club. Aside from a lecherous chickenhawk phreaker who will go unnamed, the greybeards were not only welcomed, but treated as respected elder statesmen of the tech community.

I’ll have to do some research and see what sort of elder statesmen we have locally, but we probably do have some out there. I know that we’ve produced such bright lights as Jim Butterfield (does anyone remember the days of the Toronto PET Users’ Group?) and Brad Templeton, so it’s likely that we do have techie elder statesment in our midst. We need to do the outreach to ensure that it’s not just young hip geeks talking to other young hip geeks.

The other thing we can do is just wait. We’ve already got some prominent techies with greying temples, and even I — less than 2 years away from 40 — have been sprouting more grey in my well-gelled mane and the ol’ goatee as of late.

David also points to some problems with Toronto that could use some shoring up before it can become a high-tech hub:

1. Personality. I agree — a lot of the vitality of Toronto is done in spite of rather than because of the people in charge of urban design here.
2. The Commercial Concentration Tax, aka “Let’s f*ck Toronto and move all big businesses to 905” tax. I concur again. I had an interesting conversation last weekend with a guy who lives in Providence, Rhode Island. Providence used to be a bit of hellhole of a town where they practically rolled up the sidewalks at night, which was a good thing — at night, you were likely to get mugged. He told me that the revitalization of Providence is largely credited to “Buddy” Cianci, the (ahem) colourful mayor, who turned the town around and made it both safe and a destination, largely by making it more business-friendly. This is the one aspect of Jane Jacobs’ theories that arts grads and Socialist “Worker” readers always miss: what’s good for businesses large and small is often good for the city and its people.
3. Geography. “Downtown Toronto is great for young people, but every meter you move away from the subway line, not so great for people with families. Liberty Village would be a great place to put BlogMatrix, if we really started making a go of it except I’d be commuting — within Toronto! — for 1 1/2 to 2 hours a day. Wilson station through Finch has great subway access, but the North York sector of Toronto (Mel Lastman Square, bah) is soulless as Dundas Square.”
4. Youth and the aversion to “enterpriseyness”. I agree again: “Possibly because the previous two points, the two TorCamps and one TorDemoCamp I have attended have skewed pretty young. Not that there’s any thing wrong with that, except for at the DemoCamp when there was a moderate amount of sneering at a enterprise level app. Believe it or not kid, there’s important issues out there that need solving that are important, even though you’ve never heard of them. And ‘enterprise’ doesn’t (have to) mean boring and process-laden, it means it has to scale scale scale. Just like that Web 2.0 app you’re plugging away at. Just because it works with 5 people doesn’t mean it’s going to work for 50,000 ‘with a little more hardware’.”

I’ll write more about this next week. As always, your comments are welcome and encouraged! Fire away!