So, what’s so cool about Silicon Valley?
Over the course of my career, computer techies have gone from being the geeks in the back office to the technology evangelists and digital provocateurs CEO’s want as part of their team. They are disruptive, innovative; they see problems differently and challenge the stale mindsets within established industries. They make things happen, fast; and they motivate traditional leaders into action.
As with anything that appears new, game changing and lucrative, people with money want a piece of the action. In the late 1990s, it was naive and greedy investors who jumped on the tech bandwagon, inflating the bubble to the point of collapse. They didn’t understand the technology or the business model. Yet they blindly threw years of economic modelling out of the window on the promise of ill-defined returns and unprecedented valuations. Even when good ideas materialised, they could never deliver on such expectations. Inevitably, the bubble burst!
20 years on, with a new generation at the helm of businesses, it’s all too easy to forget that. Traditional businesses, under pressure from global competition and declining margins, are looking for an edge, and their deep corporate pockets make them seem easy pickings for the next generation of tech entrepreneurs. Hence: fin tech, prop tech, mar tech, ship tech... Wow, all you need is a garage full of developers, a bold business plan and a persuasive sales team to reap huge rewards.
Since the 90’s, Silicon Valley in California has been synonymous with technology and innovation. Gone are the grey suits and competitive hierarchies of the old corporate America (or the pin stripes and bowler hats of old-fashioned British business). The tech millionaires of the Valley sport T-shirts and jeans. Their employees, in checked shirts and hipster beards, often sleep in their cars to minimise time away from work, and are rewarded with soft drinks on tap and all the M&Ms they can eat. It seems to be a formula for success, and traditional businesses across the world are seeking to emulate it.
Many corporate decision-makers have made the pilgrimage to Palo Alto looking to emulate its success. They return having had an epiphany. Finding highly successful businesses run by a 20 year old CEO, operating out of run-down buildings filled with staff writing all over the walls, sitting on beanbags or even playing table tennis is stark and motivating. And they depart compelled into action. Hence many corporations have been hiring out old buildings from Clerkenwell to Canberra and filling them with beanbags and football tables. They hire engineers by the dozen and relocate existing staff, giving them titles like ‘Scrum Master’, ‘Product Manager and ‘Imagination Officer’. Then they wait for the cash to start flowing in.
I’m exaggerating, of course. But only just. I’ve been on those corporate delegations to Silicon Valley, cringing as my fellow suits and I were led into the canteen to be wowed by the free build-your-own ice cream – especially when I realised this was part of the host company’s talent retention policy: “Look at them queuing for sprinkles! Do you really want to be one of them?”
Wiser readers might wonder if there isn’t a bit more to the success of Silicon Valley than the more superficial trappings, and they’d be right. That’s not to say culture doesn’t matter. It really does. But the Silicon Valley culture that’s worth understanding and emulating has nothing to do with ubiquitous fleece vests, and everything to do with challenging the status quo and sharing ideas. While the tech industry is entirely based on intellectual property, its leading thinkers are anything but secretive and proprietorial. What really impressed me about the Valley was how openly people talk about their ideas, even sharing them with competitors.
The assumption seems to be that unless you’re willing to share what you’re working on, you probably aren’t doing anything worth knowing about. After all, as the old joke goes, a beaver might claim credit for having had the idea on which they based the Hoover Dam, but he didn’t build the thing. So the innovators of the Valley share their ideas through TED talks and frequent industry meet-ups, confident that the rewards will go to those who actually develop those ideas and make stuff happen. For the same reason, companies are very relaxed about employees moving on regularly: it all adds to the cross-fertilisation of ideas that benefits the whole ‘open source’ ethos.
Yes, there are some more superficial elements that flow from that culture. Working practices – as well as clothes – are certainly less formal. People really do start businesses in garages before hiring warehouses and fitting them out with beanbags and all the rest. But when they organise their people into ‘pizza teams’ and ask them to practise ‘design thinking’ and engage in ‘co-creation’, they actually know what they’re talking about.
Using principles now immortalised in ‘The Lean Startup’, these companies reimagine the challenges and value drivers of traditional business domains or invent entirely new ones. Starting with the most difficult or uncertain problems, they methodically test and validate the value of potential solutions through prototypes and minimum viable products (MVPs) before investing at scale. They constantly seek out innovative solutions, not betting on just one but experimenting with multiple possibilities. If one solution seems to go nowhere, the idea behind it can always be revived at a later date for another purpose. And the idea is to shake off biases and assumptions that might cloud your thinking. As Henry Ford famously said, “if I’d asked people what they wanted, they’d have asked for faster horses”.
This is a world away from vanity investments in cool technologies whose benefits are poorly defined. It’s all too easy to try and find a problem that justifies a need for new technology: How can wearables help our workforce? How can we use virtual reality to support our frontline workers? Will artificial intelligence unlock unexpected value from our swamp of data? Will robotic process automation replace the tasks of half of our workforce?
If more traditional companies want to benefit from the traits of silicon valley’s success, then they must consider how best to inspire and unleash the knowledge and creativity within their own organisation (partnering with experienced practitioners of Lean and Design Thinking can help to unlock and accelerate this). They need to be open to experimentation even when some experiments will inevitably fail, and others may dilute or even cannibalise existing revenue streams. They must be encouraging to challenges to existing ways of working, even seeking external provocation. And they need to support and reward sharing, collaboration and success.
Silicon Valley has dominated the tech landscape, and made billions in the process, by rewarding creative thinking and openness to new ideas. That has led to a distinctive culture that contrasts sharply with traditional ways of doing business. But it isn’t the studied informality of the Valley’s residents, any more than the Californian sunshine, that explains its success. When it comes to inspiration and innovation, table tennis and limitless ice cream are a feature, not the cause.Theirs is a distinctive, deeply embedded culture that breeds success. That’s what’s really cool about Silicon Valley.