licon Valley: A Special Place for High-Tech Innovation

Transcription

1 licon Valley: A Special Place for High-Tech Innovation Science & Technology Careers Summer Camp at Stanford August 13, 1998 Shirley Tessler and Avron Barr Co-Directors of the Software Industry Study Stanford Computer Industry Project

2 The Stanford University Computer Industry Project n Alfred P. Sloan Foundation Industry Study CIP s Corporate Sponsors Andersen Consulting Booz-Allen & Hamilton British Petroleum (BP) Citibank N.A. CMP Media, Inc. Daiwa Inst. of Research Ltd. Ernst & Young LLP Fujitsu FX Research Laboratory Merrill Lynch Microsoft Corporation Montgomery Securities Moore Corporation Ltd. NTT Perot Systems Corp. PeopleSoft Philips Sumitomo Corporation Symantec

3 SCIP s Research Initiatives Investigating Trends and Issues How do companies develop high-tech products successfully? How do companies use technology? How does the Internet change the way companies sell their products? What will the world do if there are not enough programmers? How do regions develop high-tech

4 Silicon Valley Transformation Primarily agricultural Software & electronic companies: 7000 Start-ups: 10-15,000 Share of US high-tech business: 37%

5 Market Value Comparison of U Industries in 1997 Silicon Valley (high tech) $452 billion/2.440 billion markka Wall Street (finance) $405 billion/2.187 billion markka Detroit (automobiles) $113 billion/610 billion markka Hollywood (movies & TV) $56 billion/302 billion markka

6 Silicon Valley -- Just a Little Piece of California

7 1500 square miles population: 2.3 million jobs: 1.2 million -tech ssionals: 100,000 high-tech ers: 300,000 gn-born: 23% Map from Philips;

8 Important Ingredients to Silicon Valley s Success People Ideas Money Business Culture

9 People

10 A Magnet for High-Tech People University people (faculty & students) with cutting-edge knowledge Global companies that come to see what s going on here Foreign born Students who stay after graduation Entrepreneurial technical and business people who come for the opportunity

11 Startup Companies Need Support Selling Tools to the Gold Miners Silicon Valley needs more than good engineers to be successful All businesses need help: accountants, lawyers, marketing advice, office space, equipment, BUSINESS CONSULTANTS and much more.

12 Ideas

13 Lots of Ideas Created Research labs (academic, government & corporate) Networking: talking to everyone, including competitors Job changing: cross-pollination of ideas Alliances

14 The Universities and Silicon Valley Enjoy a Close Relationship Research: good ideas Advice: cross-discipline expertise (e.g., patent law) Well trained and entrepreneurial faculty and students Post-graduate training: technology and business Royalties of spin-off firms Visiting professors from industry bring new knowledge from the business world

15 Some of Stanford s Children MIPS Computer professor) Excite Logitech Cisco (staff) * Hewlett Packard (students) * Rolm * Tandem Computers * Megatest * Trimble Navigation * * * * Te sset Management pany ayfield Fund fessor) Institutional ture Associates echnology ture Investors friends & associates: hoo (students) ocalink (students) tevo (student) * Silicon Graphics (professor) * Netscape * Sun Microsystems (student and graduate) * Apple Computer * NeXt * Electronic Arts * Radius * Echelon * General Magic

16 Money

17 Long-Term Research Funding Government funding Good, if researchers control research Industry Large companies like IBM & Xerox operate big research laboratories

18 Investors Who Take Risks Venture Capital Venture capitalists provide money and advice to high-risk new businesses Angel Investors Successful business people who invest their own money in new businesses Industry Companies look for new ideas they can t for create themselves fast enough

19 Nobody Knows the Future Trying many business experiments increases the chance that one business or technology will win! Silicon Valley is a collection of many business experiments. Out of every 10 startups: 1 will be a big success 2 will break even 7 will fail completely!

20 Venture Capital Financing in Silicon Valley in 1997 Silicon Valley startup companies received lots of money to help them build a business. ( markka)

21 Business Culture

22 Speed is as Important as Ideas High-tech markets change very rapidly Commercial Internet only 4 years old Silicon Valley companies are organized well for rapid change Flat hierarchies & teams Collaborations and joint ventures with othe companies Willingness to eat your own young

23 Entrepreneurism is Admired Entrepreneur A person who takes the risk of starting his own business. Don t need to work for a big company to get respect JerryYang, Marc Andreeson & other role models

24 Young People are Important Cutting-edge (the newest) skills and knowledge Fresh ideas Entrepreneurial attitudes Trusted with responsible jobs

25 Failure is OK -- Really! Failure is part of taking risks. Failure is a lesson on how to do it better next time. No shame or stigma

26 Silicon Valley Has Some Bad Points Too! Bad traffic -- too many cars! High prices for houses -- 70% of the people can t afford to buy a house $455,000 average in Palo Alto (2,457,000 markka)

27 Lessons from Other Silicon Valleys India Israel Ireland Singapore, Malaysia, Taiwan Every country that recognizes the importance of technology will eventually have its own Silicon Valley!