From Pando Daily:
The real bubble is one we collectively inhabit. Call it a Silicon Valley state of mind, a bubble of insularity, more the result of groupthink than excessive valuations. Tech is not so much an industry as a culture, one intent on itself, separate from mainstream America. The Bureau of Labor Statistics calls the Valley a “symbiotic cluster,” which is probably less fun than it sounds.
Differences between insiders and outsiders lead to persistent, mutual misunderstanding that have made a lot of headlines. Let’s talk about where those differences come from.
Risk tolerance
Twenty years ago, Analee Saxenian, a dean at Berkeley now, showed that Silicon Valley won out over other historical tech centers, like Boston’s Route 128, because of its risk appetite and commercial culture. More generally, we know business owners think about risk in fundamentally different ways than employees — sometimes they don’t even think of risk as risk at all — and up to a point they are rewarded for that.
In Silicon Valley, entrepreneurs, investors, and hackers take larger risks than anywhere but the trading desks of Wall Street. Most of them fail most of the time. Precisely because the odds are stacked against success, bankruptcy is not vilified. There are many ways to fail well, carry on, and fail better. In many other places, failure is seen as, well, failure. And those who fail are marked for life. But here, going bankrupt is a rite of passage. Think of Silicon Valley as as a sort of years long brainstorming session. Just like with brainstorming, you have to have a lot of bad ideas to get to the good ones.
When it’s not okay to fail, people choose nine-to-five shifts, climbing a slow career ladder at a large firm over decades. In the best-case scenario, they’re opting for security and prestige rather something bigger.
The first group of people has made a leap of faith, the second has not, and any ensuing discussion exposes a quasi-religious divide.
Time/velocity
Now doesn’t last very long in San Francisco.
More happens at startups in a couple months than would happen at a corporation in years. Launches, pivots, hiring, churn, fundraising, outgrowing the office, outgrowing the office again.
In business, as in biology, time is linked to size. A second seems like forever to a fly, because its eyes are sending more signals per second to its brain than human eyes do. Startups are like flies; they have a faster commercial metabolism. During a single corporate sales cycle of several months, an entire subgenre of startups will have lived, mated, and died. Which means they can’t wait. They’re already moving on. (For instance, who talks about social gaming anymore?)
How many other industries have a website like ProductHunt highlighting the 10 hot products launched today? Nick O’Neill of StartupStats estimates that about 1,000 new products, features, hacks, and toys come out every 24 hours. They’re not all good, or even plausible, but if we assume conservatively that only 100, or just 10, are decent, that’s a whole lotta shakin’ going on.
Meanwhile, places like Grand Forks, North Dakota, get excited about a new Olive Garden. There’s nothing wrong with that, but it should give us pause.
Space
If you work in finance, New York, London, or Hong Kong would all do the trick, and there are many secondary capitals. If you work in healthcare, take your pick of cities. But everyone knows the capital of tech, and everyone makes their pilgrimage to Sand Hill Road eventually. The VCs are here, and so are the coders. The Bay exerts an inevitable gravity.
While America has many vibrant tech communities, its most important axis stretches from San Francisco’s South of Market neighborhood down a narrow peninsula through Menlo Park, Palo Alto, Mountain View, and Cupertino to Santa Clara County. That gives the industry the feel of a small town, and in small towns, everything gets back to you.
That geographic concentration means that most of tech does not feel the rest of America’s pain, simply because tech does not see it much. The polar vortex was a good example what the country lived and we missed.
It cuts both ways. After the tech bubble burst in 2001, Silicon Valley lost about a quarter of its high-tech jobs over three years, and hadn’t recovered by the time the financial crisis hit in 2008. All that dot-com suffering barely hit the rest of America, which only really crashed with Lehman.
Language
Conservatives worry that Spanish will take over America. They shouldn’t. The language of the future is code.
There are about 1.5 million software developers and programmers in this country (about one half of one percent of the population), and they are disproportionately represented in five counties around the Bay. In Santa Clara County in 2011, almost 29 percent of all jobs were in tech.
You meet people here, no kidding, who start sentences with “else,” which is the coder equivalent of “or.” No matter what flavor of code you learn, it’s all a mix of math and English, and like any other language, it shapes how you think. The thought paths of code are Boolean.
In the Middle Ages, monasteries were islands of scholarship in a sea of illiteracy. The monks lived off a parallel economy of alms and tithing, in a rarified space apart from the worldly concerns of feudalism, thinking in dead languages no one else could read. Tech is kind of like that. A parallel economy, a rarified space, a culture lost in translation....MORE
