“Over here, our cucumber water. Here, our collaboration space.
“Desk? No, not a desk. A hotdesk.”
I have arrived. Silicon Valley, 2014. My startup pilgrimage.
From Soylent drunk house parties with YC alumni, to pitching legends of the sport down Sand Hill Road, and cold brew catchups with handcuffed founders who “sometimes see Mark”, it’s all real.
And in my cucumber water, I find the secret of Silicon Valley. The secret is there isn’t one. The Valley is just a bunch of people with laptops, too.
What the hell?
If all you need’s a MacBook and an inclination, how come Silicon Valley's still special?
The Uncanny Valley
The things that seem to make the Valley work, don’t seem to make everywhere else work like the Valley.
Governments spend lots of money on looking like Silicon Valley.
And it looks good. Money can:
build coworking spaces, incubators, and innovation labs;
incentivise accelerators, angel investors, and VC funds;
offer grants, loans, and schemes;
create, protect, and spin out intellectual property;
organise conferences, speakers, and parties;
influence unit economics with rebates and kickbacks.
But no matter how things look, they’re never quite the same. Money can buy the consequences of great startups. It can’t start them.
Cause And Effect
This ecosystem building is a natural confusion. It’s not that ecosystems don’t matter. They do.
But ecosystems manipulate inputs. And manipulation, even done well, can’t get the right outputs without the right inputs.
No investor can fund the great startup that doesn’t exist.
Silicon Valley didn’t have an ecosystem in the beginning. It had great startups. And with enough great startups the ecosystem built itself.
Ecosystems are emergent properties. Trying to build the ecosystem without great startups is like trying to build Facebook without people.
That’s why money is useful once you have great startups, but almost useless when you don’t. Great startups don’t emerge to support ecosystems – ecosystems emerge to support great startups.
Once things get going, the ecosystem kicks in.
But an ecosystem isn’t coworking spaces or conferences. It’s a collective memory.
Since most startups fail, the hardest lessons to learn are taught by success. Almost everyone who’s experienced why Silicon Valley works is in Silicon Valley.
So, despite decades of competition and all the money in the world, there’s still no better ecosystem than the Valley.
This begs the question – how do you start great startups?
Well, you start by getting great people to start them!
Silicon Valley is just a bunch of people with laptops, too. Its secret is who’s sitting behind the screen.
The Valley exists because world class people started tech companies there. This wasn’t a strategy – it had to happen somewhere, and happened to happen there first.
But because it did, it’s now the only place where the default option for world class people is to start or join tech companies. And you get out what you put in.
This is what makes the Valley special. With enough world class people, the improbable becomes inevitable.
So What’s An Ecosystem To Do?
If you’re targeting Silicon Valley, there’s a simple way to calculate your ammunition:
How many world class people you have
How likely they are to start a startup
To win the war, make more people more likely. The ecosystem can wait.
How many world class people you have
The first part of the equation is tough. World class people are by definition hard to make, so it takes a long time to make them.
And no matter how good you are at making them, even by accident the rest of the world will make more than you can. You need people to come to you.
Relax immigration for ambitious people, and aggressively (de)regulate promising areas for them to explore. It works.
Ambitious people are like weeds: they find a way. If you want more weeds, don’t worry about biology, just crack the pavement and watch them appear.
How likely they are to start startups
The second part of the equation is even tougher. Starting a startup is a weird thing to do.
It’s weird when it’s what you should do: if good ideas didn’t sound weird, we’d already be doing them.
But, outside Silicon Valley, startups sound even weirder than they should.
Successful cultures are successful for a reason – they push ambitious people towards what worked before. Culture is history’s way of telling you what to do.
Professional services in London, government in Singapore, startups in Silicon Valley. Once a path looked promising, ambitious people took it.
Soon, a promising path became the default choice. History picked a path, now culture keeps us on it.
But history doesn’t change, even when what matters does. If you want more world class people to start startups, outside Silicon Valley, you have to leave history behind.
You have to change the culture.
Changing culture is hard, especially with startups.
Even when world class people start startups, most fail. To get results, you need lots to try. A few defectors aren’t enough.
It’s tempting to make up the numbers, but it’s dangerous to make startups a default path for normal people. Where world class people normally fail, normal people have almost no chance.
This isn’t good for anyone. Soon, normal people will be worse off, and world class people even less convinced.
So what do you do?
You create a safe house. In successful cultures, exceptional people are always waiting to rebel.
Alone, their rebellion fails. And individual failure looks especially bad. Bring people together, however, and individual failures are hidden by group successes.
You don’t have to do anything.
Your job is to legitimise their rebellion, mythologise their journey, and heroise their efforts. Become the default path, one safe house at a time.
That’s what we do at Entrepreneur First. Get hundreds of world class defectors in one place. They start startups together.
First a safe house, second a culture.
Thanks to the EF team for reading drafts of this. If you’re looking for a safe house, it’s here.