May 27, 2013

Silicon Valley's Tech Talent Hegemony Endures

How does one build a magnet for talent? It is a question equally important to cities and to teams working in cities.  One of the favorite past-times among tech people is whether Silicon Valley's glory days are over.  For example, an article recently featured on LinkedIn: "Why Silicon Valley's heyday might be over." (It stood out to me that the title suggests lack of confidence about the assertions.)  Rankings are like comfort food. They are dime a dozen (see Startup Ecosystem Report) and are like debates over religion or politics. UselessThis kind of debate misses a key point. Instead, your sole focus as an entrepreneur, a serious technologist, or political/business leader should be to focus on the attributes that produce outcomes of a successful startup hub, and decide whether you can locally produce those (or better) attributes or decide (as many do) to move to San Francisco.

Did I say San Francisco?  Well - I won't digress - it's yet another fun debate, but you can read about it in this article written by Hermione Way.

Deeper thinkers like Paul Graham get the point. In a (more confidently titled) article "Why Startup Hubs Work," PG outlines 3 factors that explain success of startup hubs: 
1) Environment,
2) Chance, and 
3) Numbers.

PG explains that #3) numbers is an underlying driver for the first two important factors. "To make a startup hub, you need alot of people interested in startups." In other words, density of right talent is a key driver for success of ideas, of innovation, of teams that capitalize on opportunities, and of successful tech companies that grow from those small teams. PG originally frames this problem in the inverse, noting that successful areas reduce the attrition rate of failure: "Somehow it's as if most places were sprayed with startupicide."

To be sure, this idea is not new. Density is a pre-requisite to ideas having sex, as elaborated in this popular TED talk by Matt Ridley.  Economist Richard Florida also studied this theme extensively and coined an entire academic sub-discipline around the Creative Class.  We, the People, have known this for millennia. When first hunter-gatherers settled into cities, all sorts of innovation happened: irrigation, plows, granary to store crops, military to protect the crops and settlements, weapons to steal neighbors' crops and settlements, rule of law to avoid such conflicts, and on and on.

What about the Internet?

Yes, internet has democratized exchange of ideas, but those outside of SF miss the simple truth. Tech people who live locally have internet AND the meetings that take offline.  Do you have that, RTP? Berlin? Vancouver?  Does your Ruby meetup group have 6,000 members and meet almost every day with dozens of organizers and hosting different events for different audience?  Do you have comparable sized communities around JavaScript, around node, visualizations, machine learning, etc?  I'm not bragging. Instead, step back and think about the causes that lead to this reality.

I'll make one more point on the effects before going back to causes. It is a cursory and high-level evidence that SF's tech hegemony will accelerate, and not slow relative to competition.

Natural phenomena generally follow a logistics curve - an exponential growth followed by inverse version flattening out to an asymptotic line:

Key question is whether we are at a turning point

Implication => If we have not reached a point where deceleration of growth has been reached, then SF will continue to outpace competition, because the growth is exponential.  If you actually live in SF, then it's not difficult to believe that we have not reached that turning point. Things are blowing up. Every day.  

Let's come back to point.  Rather than envy SF's leading position, focus on outcome and how you can also build it. Specifically, how does one build a tech talent magnet? What are the attributes that attract tech talent?  It seems at times that SF has cornered the market on this problem.

More to come

In a future post, I'll delve into what is visible and what lies underneath the visible layer.  In so doing, I will explain why features noted by critics like "high cost of living" or "fierce talent for engineers" totally miss the point.

  • How SF Tech community differs (macro-analysis)
  • Building a better (talent) mousetrap (micro-analysis)
There are some interesting implications.  For example, large companies that do not have a strong presence here may want to reconsider their future headcount investment.

Stay tuned!