Amy,
I think part of what's wrong is that you're looking at a very small slice of the activity in a single region, that is dominated by businesses in a single sector.
Silicon Valley isn't the economy. It never was and never will be reflective of the whole economy, and even in the best of times is only one of many growth engines.
Silicon Valley (and VC funded startups) have always been very cyclical. The downturn you're seeing in VC investment is typical, has happened before and will happen again. Businesses are still being started all over the place, but they're not being started by people looking for the VC deal, and they're not being founded by people who think "being an entrepreneur" = "going to parties." It's back to basics for everybody.
Down in Southern Cal, entrepreneurship is still strong. Everything from biotech to porn. Creating value all over the place. Mostly smaller deals, mostly not hyped by huge VCs, mostly not IPO candidates now or ever. Just good solid businesses that will contribute to the economy for years to come.
Even in tech, there's lots of activity, but mostly NOT in the Valley. It's too expensive. You can start a company somewhere else at a fraction of the ongoing costs, and in the current employment environment, lots of people are quite happy to move to a region where the cost of living is half, especially if it the move comes with a new job. I know a bunch of people in Salt Lake who have been luring Silicon Valley folks to their startup companies. You won't meet them at your parties in Palo Alto.
Or look at San Diego. If biotech is the next great wave (as it might be) then San Diego and Orange County are the next Silicon Valley. But you won't know that from talking to most "entrepreneurs" in the Bay Area.
Here in LA we're seeing lots of interest in new companies making security products, systems and services. Also lots of stuff related to military, defense and espionage technologies. 10 years ago lots of people were leaving aerospace and defense and using their advanced materials skills to build new businesses for titanium and composite mountain bike parts or whatever. Today lots of them are shifting their business strategies (or creating new businesses) to take everything the've learned towards the needs of the current "big spending customer" -- the US DOD.
If you're failing to see new businesses and entrepreneurship, it's only because you're looking at the startup areas of the past 10 or 20 years. Real entrepreneurs look at the needs of the present and the opportunity of the future. It is unlikely that the growth areas of the past 10 years will be the same as the growth areas of the next 10. More established companies in those "older" growth areas will certainly continue to benefit. All those new businesses are going to be consumers of computers, networking and processing power and companies like Intel will certainly benefit from their growth. One could even argue that modern computing has made new fields like biotech possible in the first place.
I would argue that you are suffering from the same myopia as much of the Valley, so it's not really surprising. In one article (wish I could remember where) recently I read of a CEO of one of the more successful companies of recent years defending the "interlocking" board relationships between many SV companies. (A concept championed by Kleiner Perkins as their "Keiratsu," modeled after the way Japanese company boards have historically worked.)
His defense was -- essentially -- that a computer tech company would benefit by having computer tech execs from other companies on their board. After all, that way they could all get a "broader view" of the business.
My thought was that this, instead, would just lead to exactly the kind of insularity that killed much of Japanese industry, and probably killed many tech companies in recent years. If they really wanted a broad view of the market, they'd put a customer or two on the board instead. A lot of companies would have avoided wasting a lot of money if they had been more careful about listening to what their potential customers were saying.
But so long as everybody in the Valley focuses exclusively on what other people in the Valley are doing, they'll probably continue to build stuff that nobody else wants, and miss opportunities to build stuff that other people need.
Want to find out about real opportunities. Talk to anybody BUT people in your own field. That's when real innovation can happen.
mg |
