The Silicon Valley Mindset
By: Valeria Sasser
Tags: Investment, Business, Technology, Silicon Valley, Mindset

Rio Tejo, Lisboa, Portugal. Photo by Valeria Sasser

Today is the Web Summit’s day three, the last day of the annual mega tech conference in Lisbon, Portugal and, as it became the norm since March 2020, the event was online (Watch Day One here). As always, the quality of the event was great and its speakers, all inspiring. In fact, the Web Summit probably reached a much larger audience in 2020 than those who were able to travel to Portugal in previous years. The exchange is happening strong and the Web Summit just announced an expansion to Japan, Malaysia, and Brazil. But despite attracting the attention of many visionaries from all around the world, the expansion did not include the incensed and celebrated Silicon Valley. Why leave out the tech capital of the world one would ask? Because Silicon Valley is a bit more than a geographic location.

The Silicon Valley, a place that drives the convergence of similar minds, interested in resolving everyday problems through the application of science and technology into daily life in a collaborative way, developing high-tech consumable products, is much more than a location: it is a state of mind, it is a mindset. I named it the Silicon Valley Mindset. The Silicon Valley ecosystem has specific ways of creating/doing business and there are items that must be present in order to be backed up by venture capital — they are: vision, innovation, scalable ideas, replicable ideas, agile in their decision-making process, collaboration, and networking environment (it applies to almost everything in a startup, no silos), making mistakes is not a problem and they must occur early in the process to be fixed right away, the products are digital or, mostly, portable, and they create great value for the customers so their products are effortlessly adopted. This mindset is also fast and concise: an innovator must be able to pitch the idea in an elevator ride to a capital venture agent.

In his article “Innovation for Impact”, published at the Harvard Business Review, Curtis Carlson proposes a business framework rooted in a concise, foundational model of what he believes (and I agree) a value proposition should be — the NABC value proposition, which is as follows: “Need: The offering should fill a significant gap in the market; Approach: The offering should meet customers’ needs in a unique, compelling, and defensible way and present an attractive business model for investors; Benefits relative to costs: The offering should provide obviously superior value for customers; Competition: Customers should find the offering consistently more appealing than the alternatives.” This approach works for every market, in every language, in any country, it is scalable at its concept, it even makes it easy to pitch and to market a product by storytelling, which is yet another element of the Silicon Valley mindset for creating content, but also because, as stated by Carlson, “Research shows that stories help people remember information and revise their beliefs, assumptions, and theories.”

Furthermore, the venture capitalist Doug Leone, from Sequoia Capital, talking about the Brazilian ecosystem during his interview at the “Brazil at Silicon Valley” Conference in 2019, explained how deciding on VC investments in startups includes a lot more factors than just a geographic location. He states that having enough software engineers (qualified workforce), R&D, and academia connected to the tech world (as Stanford University and others are), and having a stable business environment is key for VC investment. He also stressed the need to create real local innovation and that “look-alike companies’ gigs only last so long”. We might conclude that innovation can be local, solve local problems but they are truly successful if they solve global needs, meaning if they are truly innovative, scalable, and replicable.

In addition, the Silicon Valley Mindset also understands and applies the Pareto Principle (also known as the 80–20 rule) and does not waste time with non-productive issues, customers, or codes. Usually fixing 20% of the top bugs clears out 80% of the code problems, the same way that 20% of the customers will create 80% of your problems.

The successful establishment of several tech hubs throughout the world in the past years is a natural evolvement and movement after decades of being located, in the hearts and minds of so many, in one single location and it shows that the valley is, in fact, a mindset that can establish itself strongly in other regions such as Portugal, host of the Web Summit I mentioned at the beginning, given the incentive to do so. Portugal, our example here, has an agency dedicated to attracting promising startups, to connect investors with startups, and to help companies to open branch offices in the Lisbon Area: the Startup Portugal. The municipality of Oeiras, for example, is becoming a tech hub and companies such as Cisco and Oracle have their office there and Google Portugal has an office in nearby Belém. But innovation and promising startups are popping out in other areas of the country as well. I believe more and more will appear in the next few years if the environment continues fertile and welcoming.

But Portugal is not alone and the Silicon Valley has been branching out to other locations: there are tech hubs in Amsterdam, Dublin, São José dos Campos, and São Pedro Valley, in Belo Horizonte, Brazil, and also in other locations in the USA such as the so-called “Silicon Hills” in Austin, TX, and in the states of Washington, Oregon, and more recently, Utah, Alabama, Colorado, and North Carolina ( a place with low cost of living, perfect to start and raise a family), just to mention a few. Incentives are available for the companies willing to establish themselves in new locations and they are moving. Larry Alton, in his article in the Digitalist Magazine online, states: “Nobody is suggesting that Silicon Valley will cease to be the tech capital of the world. However, it’s losing some of its shine. As tech companies become less geographically attached to the area, we’ll see more innovation in more places. And, at the very least, this is good for the larger society.” That’s because the Silicon Valley Mindset is portable and can be replicated anywhere.

Furthermore, the pandemic and the consequent widespread telecommute that resulted, many permanent, is also creating an unprecedented exodus from the geographic Silicon Valley to other areas driven by the high cost of living and taxes in the Bay Area. Dropbox and Splunk CEOs reportedly bought homes in Austin, TX, and most recently, HP, a valley pioneer, released information this week that it is also moving its headquarters to Houston, Texas. However, CEOs and top executives moving out of the Valley may be more related to high personal taxes than for other reasons because most part of their operations will remain in the valley.

The tech industry always knew that it need not be located in one single place: people with the Silicon Valley mindset and governments willing to create welcoming conditions (also investing in education to create an ongoing qualified workforce and promoting a stable business and legal environment), the branch out of the Silicon Valley can happen anywhere in the world. Soon, entrepreneurs fascinated with the valley will be able to choose to visit tech hubs with specific strengths (hardware, rideshare, search, social media) and a visit to a tech hotspot will cost much less depending on where you are in the world, maybe it will be in a neighboring state or country. The original Silicon Valley, nevertheless, will be the gravitational center for the tech world as the historical, foundational place, with a few giants rooted there and with one of the most important universities in the world for tech and innovation (Stanford University). It is and will be for a long time the most important center of technology, disruption, innovation, and venture capital and will remain for a while, but it is no longer the only one.

“If we build, they will come” was said about a unique, unlikely but successful venture in the past-Las Vegas. The same movement of building tech hubs in unlikely places has already started. And they will come.