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How to Be Silicon Valley

(This article was also posted in Tucows Farm. Estelle, if you’re still reading this blog, please read this entry and show it to your influential friends!)

In this blog, I’ve talked about an initiative called ICT Toronto, whose goal is to move Toronto from it’s number 3 position in terms of people who work for information and communications technologies to number 2 (currently, Boston is 4th, New York has the number 2 position and the San Francisco Bay Area is number 1). I’ve also discussed my worry that ICT Toronto are going about it the wrong way, by talking only to whom they perceive as the “big players” in tech — the IBMs, Ciscos, Microsofts — which are foreign-owned companies who treat us as branch offices and not sources of innovation. They’re ignoring the smaller companies: the start-ups where the innovation really happens. I went so far as to state that “not only is ICT Toronto’s task too important to be left to ICT Toronto; I think that we will have to accomplish that task in spite of ICT Toronto.”

I closed my rant about ICT Toronto with these suggestions for Toronto’s tech community:

  • Work! Without actual technology to promote, there’s no point in promoting it. Keep on cranking out code, designing sites, working on projects, sharpening your skills and go beyond 9-to-5 development. What made Silicon Valley great was its people’s dedication to their craft that went beyond marking enough time at work to fill a 40-hour week to get a paycheque.
  • Blog! The reason we remember Marco Polo and not his father and uncle is because he wrote down his experiences about travelling to China while they didn’t. The rule still holds today: if you’re a techie in the Toronto area and you’re working on an interesting project or can write tutorials or report on developments in the tech world, blog! Tech blogging will help boost Toronto’s tech presence on the web far better than a stack of glossy ICT Toronto brochures sitting in an investment bank’s recycling bin. (ANd make sure to mention that you’re from the Toronto area!)
  • Socialize! Computing is just a fancy branch of mathmematics, and mathematician Paul Erdos (you should read his biography, The Man Who Loved Only Numbers) proved that math was a social activity. Get out there and meet with other developers in the area — this city has all kinds of meetings, user groups and gatherings of that nature. Meet your fellow geeks and exchange ideas! Remember, Silicon Valley is as much a product of its after-work gatherings as the work done in the garage.

This leads me to Paul Graham’s latest essay, How to Be Silicon Valley, which begins with:

Could you reproduce Silicon Valley elsewhere, or is there something unique about it?

It wouldn’t be surprising if it were hard to reproduce in other countries, because you couldn’t reproduce it in most of the US either. What does it take to make a silicon valley even here?

What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley.

That’s a striking departure from the past. Up till a couple decades ago, geography was destiny for cities. All great cities were located on waterways, because cities made money by trade, and water was the only economical way to ship.

Now you could make a great city anywhere, if you could get the right people to move there. So the question of how to make a silicon valley becomes: who are the right people, and how do you get them to move?

Graham goes on by stating that you need only two types of people to create a tech hub:

  • Rich people.
  • Nerds.

Graham explains: “Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.”

what you don’t need, he says, are:

  • Bureaucrats. “Most things bureaucrats do, they do badly. We just don’t notice usually, because they only have to compete against other bureaucrats. But as startup investors they’d have to compete against pros with a great deal more experience and motivation.”
  • Buildings. “Building office buildings for technology companies won’t get you a silicon valley, because the key stage in the life of a startup happens before they want that kind of space. The key stage is when they’re three guys operating out of an apartment. Wherever the startup is when it gets funded, it will stay. The defining quality of Silicon Valley is not that Intel or Apple or Google have offices there, but that they were started there.”

What are the qualities of a tech hub city? Graham says they are:

  • Universities. “What nerds like is other nerds. Smart people will go wherever other smart people are. And in particular, to great universities. In theory there could be other ways to attract them, but so far universities seem to be indispensable. Within the US, there are no technology hubs without first-rate universities– or at least, first-rate computer science departments.”
  • Personality. Graham stresses the importance of having a creative class: “A lot of nerd tastes they share with the creative class in general. For example, they like well-preserved old neighborhoods instead of cookie-cutter suburbs, and locally-owned shops and restaurants instead of national chains. Like the rest of the creative class, they want to live somewhere with personality.”
  • Things that appeal to nerds. According to Graham, that’s things like “the kind of town where people walk around smiling”, “a town where the smart people are really smart, but you don’t have to pay as much for that” and “quiter pleasures…They like cafes instead of clubs; used bookshops instead of fashionable clothing shops; hiking instead of dancing; sunlight instead of tall buildings. A nerd’s idea of paradise is Berkeley or Boulder.”
  • Youth and liberalism. “That’s the connection between technology and liberalism. Without exception the high-tech cities in the US are also the most liberal. But it’s not because liberals are smarter that this is so. It’s because liberal cities tolerate odd ideas, and smart people by definition have odd ideas.”
  • Time. Based on the Silicon Valley story, it’s going to take time. Startups beget startups and form a chain reaction, and that’s can’t be done on the 6- to 18-month timeframes we’re used to dealing with.

I’m not so sure about the “quieter pleasures” thing: consider the large contingent of nerds who like raves, goth clubs and metal, or the heavy nerd contingent at San Francisco’s DNA Lounge, owned by Jamie Zawinski, an alpha geek. I can see the local conservatives blanching at the idea that liberalism and tech excellence are connected.

If you’re interested in boosting your own city’s high-tech sector (I certainly am), I strongly encourage you to go check out Paul Graham’s essay. I’d also like to see some discussion in the comments, so please, comment!

12 replies on “How to Be Silicon Valley”

Or you could just read the bajillion academic research papers published on the subject, many of which are actually somewhat practical and less academic than the average academic paper. Waterloo’s Institute of Innovation research has some of their research online. Or another paper from U of T.

And ok, so they’re actually pretty dry and academic. My point is just that there are a lot of people who study this cluster growth issue. I mean, who doesn’t want to be the next Silicon valley? If it was easy or obvious, everyone would do it. You omit historical factors, like the presence of the first semiconductor companies, which seeded the explosion in tech companies and the large number of defense contractors laid off in the area at the end of the cold war. And let’s be blunt: the weather in the bay area doesn’t hurt. Toronto’s weather, well, it can hurt at times.

And are the ICT Toronto people the same as the TRRA?

You also need people that take risks, which is definitely not a Canadian trait. There is the telltale #1 tactic of talking to the government among others. Folks in the valley or Boston don’t talk to the government – they just do stuff.

Toronto may be #3 in people “working in information and communications”, which amazes me, but that isn’t the number of people who start and work in startups. That requires a very different mentality. As for world class universities, you are comparing the U of T to Stanford, MIT, and Harvard.

You need to change the fundamental attitudes of people to make them into entrepreneurs rather than workers, and then change the tax structure in Canada to make it reasonable to invest in those start up enterprises.

Harvard? Spin-offs? Stanford, MIT, Berkley maybe. Harvard, not so much. The last major company to come out of Harvard was that guy who dropped out to start a company that made BASIC interpreters IIRC.

Anyway, yes, U of T is nowhere near those universities. The proper comparison would be Waterloo, which is why there are so many start-ups there. Now all we need to do is get more to go public (like RIM and OpenText) and fewer to take the buy-out exit strategy (that company Google bought recently, the one Adobe bought, the company that Sybase bought – obviously memorable companies in their own right).

Toronto more or less has the right ingredients as Paul G laid out, but the one major missing piece (besides, potentially, cost of living) is the perception of Toronto as a hip, liberal place to be. People who live here already know the score, but I’m not sure that’s a meme that’s escaped the GTA boundaries. Canada is already seen as a relatively conservative, let’s-not-rock-the-boat kind of country, even if socially left of centre.

But I’d wager Montreal and Vancouver are probably seen as more free-spirited than Toronto. All our other attributes make us a serious contender, but until Toronto’s hype machine finds the right spark, we’ll continue to remain a wannabe.

Unfortunately, until Toronto starts coming up with products that are more innovative, I can’t see how Toronto will ever come close to even considering comparison. There are not enough entrepreneurs and investment from what I can see in Toronto to get this going. I might be out of the loop, but I’m not really currently aware of any contending or ramping up Toronto start-ups that are generating buzz.

I’m also not sure where being like Silicon Valley surrounds only web publishing, which this topic seems to focus on. Silicon Valley is successful because they have great software companies of many varieties, and hardware companies to complement it. Cranking code and blogging isn’t going to bring this city up to par.

And while all of the fuss in Toronto about comparing to US cities? Hollywood North? The new Silicon Valley? 🙂

I’m actually in Silicon Valley right now for my summer research internship, and I can see why the Bay area, especially Palo Alto, Menlo Park and Mountain View are the tech hubs in Silicon Valley. The environment and buildings are easily accessible, in fact, it’s so easy to get to them, it’s not like in Toronto where it’s so crowded and buildings are everywhere. And of course, there’s Stanford. I think Toronto can become a Silicon Valley, we just need to revamp U of T as a university in computer science and engineering that can compete with the MITs, Stanfords, and Berekleys. That means, the government needs to give more money for universities for funding, and/or companies need to provide money. There also needs to be tax cuts and entrepreneurship to spur people to make inventions and start companies. That is what Waterloo is doing with their Centre of Innovation and UW has their entrepreneurship program.

And of course, like someone said before, people need to take risks, stop with the bureaucracy and start building and making stuff. And not be afraid to make mistakes. The GTA and Waterloo region are actually considered Silicon Valley North, so there is some resemblance.

“Until Toronto’s hype machine finds the right spark”? Dude, I lived in Toronto for 10 years before moving to Berkeley. Trust me, no hype machine could fool anyone into thinking they were anything close to the same.

Toronto, liberal. Hmmm, I remember thinking how strangely uptight it was that everything was closed on Sunday, and how you couldn’t buy beer in corner stores like in Newfoundland. Liberal maybe, but with a Puritan sensibility. “We’re world-class because our commutes are the longest, we have such long lines for concerts, etc.” I always got the vibe that the way to success in Toronto was to endure the most discomfort.

The other thing is the sprawl. Yes, in Toronto you can shop on funky Bloor St. West or Queen St. West. Then head 45 minutes east or west to visit a friend in Scarborough or Missassauga. Later go to dinner in some hole-in-the-wall restaurant in Etobicoke or North York. Notice you spent practically the whole day in your car, and practically speaking never left Toronto. In Berkeley, you can go from the marina to the shopping district to funky music clubs to the gourmet ghetto (restaurant row) to the university campus in 10 minutes. In Silicon Valley, every highway stop or two is its own little community with its own personality and reasons to go there. I never went to Etobicoke for a restaurant or Scarborough for a concert or Mississauga for shopping in 10 years in Toronto. But in the Bay Area I go to concerts in Mountain View, shopping in Palo Alto, visit friends in Burlingame, sightseeing in Sausalito, etc. Even Foster City has a great bike path along the bay.

There is one sector that Toronto seems to have a number of early stage companies that are going through some high growth: DATA CENTER AUTOMATION software.

At a high level this is software that helps automate servers in order to reduce the amount of administration required.

Toronto was put on the map as a leader in this space back in 2003 when IBM purchased Think Dynamics , rumoured to have been in the $50M range. Think was a company with virtually no revenue, but very cool technology.

Here are some other mid/early stage companies in this space in the Toronto region:

Platform Computing (www.platform.com)

Platespin (http://www.platespin.com/)

Opalis (http://www.opalis.com/)

Cirba (www.cirba.com)

Avokia (http://www.avokia.com/)

Xkoto (http://www.xkoto.com/)

michael kane

kane_mr@yahoo.com

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