I've been watching the financial news the last couple of days and noticing how once again Silicon Valley companies like Intel, Apple, eBay and Yahoo are setting the pace, up and down, for the stock market. It reminds me of how, just three years ago, after the dot-com bubble burst, the national media solemnly announced that this was the end of Silicon Valley as a global force.
Well, here we are once again, with Wall Street dancing to the valley's tune: Google is the hottest company on the planet, and a reinvigorated Apple owns the consumer electronics world. The restaurants in Silicon Valley are jammed, the traffic is back, my neighbors who lost their jobs in 2001 are now too busy to hang out at Starbucks, and new startup companies have popped up everywhere.
Silicon Valley is back, once again. As I predicted this would happen in this column a couple years ago, you, dear reader, shouldn't be surprised. But the real question is: Why? What makes the valley so resilient that it always seems to bounce back stronger than ever?
As it happened, I was invited to give a speech last week on just that subject to executives from the Swedish (real-time operating system) software company, Enea AB. I had a lot of time to ponder the topic while stuck in traffic trying to drive the six miles from Sunnyvale to Palo Alto. Here's the gist of what I told them, some of which surprised even me.
After 50 years of well-financed Silicon Valley imitators rising up all over the world, from Seattle to Bangalore, all with an avowed goal of becoming the next Silicon Valley, why have none yet fully duplicated what happened here? And why, after all this global competition, as well as suffering from one of the highest costs of living in the world, is Silicon Valley still the world's center for technological innovation, for venture capital, for the creation of new companies, and now for the biotech revolution?
The mistake so many valley observers and imitators make in trying to answer this question is they assume the answer is all about companies and individuals. But it is not. In fact, the truth of Silicon Valley has always been that this place is never about the companies you see -- including even Google today -- or the famous CEOs you read about but is instead about the companies and people you don't even know yet, the ones meeting right now in restaurants and living rooms plotting out the next great tech wave.
In other words, Silicon Valley is not about what is but what is about to be; it is not about results but about process, and ultimately it is not about business but about culture. To understand that culture, you have to realize that there are no simple rules or practices but rather a perpetual tension between seeming opposites. That's why the valley is so hard to duplicate: There is no recipe, only a collection of forces in strange and ironic oppositions. And none of these is stranger than the fact that here, in the heartland of entrepreneurial capitalism, the culture most resembles a Marxist dialectic.
Let me give you some examples: