Possibly. However, I believe Silicon Valley to be a very peculiar ecosystem that so far has no been recreated anywhere. Not for lack of trying: efforts by Austin, Boston, and Research Triangle, as well as many foreign efforts, have been unsuccessful. They just can't seem to recreate the magic combination of people, infrastructure, and critical mass.
I have been a part of three startups that have been acquired (by Tektronix, DEC, and NT). All of these acquisitions were unsuccessful, primarily (IMHO) because companies outside of SV simply do not understand how SV companies work. First thing they generally do is cut the stock options, then can't understand why the best people leave, productivity drops, innovation stops.
In order to attract the best people and result in the best innovation, stock options must have a large upside. Even though the odds are incredibly long, people need to think they will make enough to retire. Most do not, even with many attempts and a ton of work. The companies that do make it are the best of the best, and got there incredibly quickly and with a minimum outlay of capital.
The cost of this fast track, highly selective process is the subsequent stock gain.
I think someday someone may nail exactly why SV is so unique. I'll bet a big portion of it is the compensation model. I'd hate to have us discover that it was indeed a crucial element by damaging it so severely that the result was the loss of one of the most unique regions in the US. |
