Why The Next Silicon Valley is Twitter and Skype – NOT Beijing

Summary: There will NEVER be a “Next Silicon Valley”.  Geography is becoming irrelevant for startups because best practices are available online, capital flows freely to talent, and Silicon Valley will come to you.

About every two weeks I get asked by someone – sometimes journalists who never been to China – about whether “Beijing is the Next Silicon Valley”.1

In these discussions I try to convey 2 points:

  • China is so different from the West that it might as well be a different planet – simplistic comparisons don’t work. 我是老外,我不明白。2
  • There will never be another Silicon Valley because geography is becoming irrelevant for startups.

Silicon Valley 10 Years Ago: Be There or Get Killed by Those Who Are

In 1994 I walked onto Stanford’s Campus and for the first time in my life I felt truly at home. I had no idea there was such an amazing place where people EMBRACED change and actively tried to drive it; where engineering talent was revered and not treated like a Dilbert charter.

Since then I’ve taken every opportunity to go back to Silicon Valley and spend time with friends and startups there – knowing that it was a matter of time before I moved back there and made it my permanent home.

In fact for most of my career I had to go to Silicon Valley to know what was going on. I had to go to the parties, conferences and meetings to understand the latest best practices, what investors were funding, and what startup ideas were failing. It was truly unique – the only place with a sufficient concentration of capital and talent. Most entrepreneurs and investors accepted the reality that they needed to join the Silicon Valley ecosystem or get crushed by it.

The whole world is envious of the region and for 20 years I’ve been reading about “The Next Silicon Valley is … “. It hasn’t happened in 20 years.

It will NEVER happen – EVER.

The World Started Changing in 2009

Silicon Valley is becoming a state of mind – not a place. As a startup ecosystem “the Valley” – i.e. the physical location between San Francisco and San Jose – has its own pros and cons.

I still love going there and get tingles when I arrive in SFO, but every year the region becomes less and less unique. It isn’t happening because it is being replaced by “The Next Silicon Valley” – it is happening because geography is becoming irrelevant.

Why the Era of Silicon Valley is Ending

The era of Silicon Valley is ending because:

  1. Information previously only available there is now available everywhere
  2. Capital and talent is fluid
  3. The best minds in Silicon Valley will come to you

Reason 1 – Startup Information is Available Online

If you’ve been involved in the startup community for less than 5 years it is probably hard to image a world without Twitter, Meetups, Lean Startup, and VC/Entrepreneur blogs, but until recently this was the case. I remember pouring over every word of Bill Gurley’s Above the Crowd blog in 1999.

Today? If you cannot figure out what is going on you’re simply not trying. The best practices of the startup community are widely available to anyone who puts in the effort to learn.

Reason 2 – Silicon Valley will Come to You

Blame Steve Blank, Trevor Owens, and Dave McClure for this trend.

Steve Blank travels the world and launched NEXT – now any startup community in the world can take the best practices from his Stanford and Berkeley classes and teach them to entrepreneurs. Visit ANY startup community in the world and you’ll hear stories about Dave McClure. Dave is building a global brand for 500 Startups and is willing to travel anywhere to do it.

And if you want to learn how to apply best Lean Startup practices you don’t have to visit San Francisco – you can attend a Lean Startup Machine event in a city near you. I’m guilty too – when I first arrived in Beijing 18 months ago almost nobody was talking about Lean Startup. I started evangelizing it and have become known across Asia as a result.

Reason 3 – Capital is fluid

I remember friends lamenting that Silicon Valley VCs “are so obsessed with Silicon Valley they won’t drive over the Dumbarton bridge.” Top-tier Sand Hill Road VCs held all of the power and startups had to go to them.  Today? Investing is highly, highly competitive. VCs, Angels, and Accelerators are constantly marketing themselves to the world to get the best dealflow and build their brands.

Startups pursue talent – and capital pursues startups. The competition is getting so fierce that “where” is becoming irrelevant.

What Matters is the Trend – NOT the Status

Friends in Silicon Valley correctly point out to me that the region still holds many big advantages over the rest of the world. While this is true, it is far, far less important than it was 10 years ago.

If you’re part of a startup community outside of Silicon Valley I would encourage you to stop trying to imitate it. Stop calling yourself Silicon “Blah” 3 and instead capitalize on the actual, long-term trend of the democratization of entrepreneurship.

If you’re a journalist with the assignment of writing about “Why X is the Next Silicon Valley”, consider writing about what is actually happening instead of what everyone is speculating about.

It is the only story that matters and a lot easier to write about than China.

About the Photo

A few weeks ago Rui Ma of 500Startups organized a Beijing Angel investor dinner with investors from Europe, America, and Asia.  In addition to some great Chinese cuisine and too much beer, we also had a great chat about the real trends we are all seeing in startup communities around the world.

It was the kind of conversation you could only have in Silicon Valley 10 years ago.  The dinner was a great metaphor for the democratization of entrepreneurship worldwide.

  1. A notable exception is Elmira Bayrasli who is writing a book called Steve Jobs lives in Pakistan.  We met at local Angel investor dinner in Beijing and I was really impressed with her work and perspective.
  2. I’m a foreigner, I don’t understand.
  3. Please stop calling your region Silicon “Blah” – especially Silicon Prairie. In addition to being just bad branding, you’re competing with multiple regions for a bad name. The rest of the world doesn’t know what you’re talking about or who you are.

5 Comments

  1. Tom June 16, 2013 at 12:35 am #

    Great post Kevin. I think what Tony Hsieh and the rest of the community are doing here in Vegas with the “Downtown Project” shows that we have embraced exactly the idea you are talking about. There is no talk of trying to be a “Silicon Desert” so to speak…at least no talk like that by anybody I’m aware of.

    What they are doing with The Downtown Project instead is building a new entity. Although they are building on the ‘principles’ of great communities, they stop short of actually trying to mimic those communities. Even little things like the dominant hashtag of #VegasTech stand out. It’s a point of pride here that we are doing our own thing rather than trying to be the next “something else”. The start-up community is weaving itself into what already exists all the while making small improvements here and there as they grow. Those little differences are adding up.

    It’s about blending in with the identity of the local community which will eventually cause a large AND healthy growth. I believe this will happen because it will be natural instead of forced. I also believe that is why I talk to tech people from around the country and they almost always tell me that the notice what is happening here and that it is catching on quicker than it is in other places. Having a good chunk of change to kickstart the growth helps but we still have nowhere near what others have.

    As to your last reason, I’ve begun to notice that a handful of small VCs from the are starting to set up small branch offices here. It’s not much, but it’s a start. Five to ten years ago this also would have never happened.

    • kevindewalt June 16, 2013 at 12:50 am #

      That’s awesome Tom.

      I’m increasingly hearing more and more about the great things you guys are doing there. It just goes to show you what a few determined people can do to change a region.

      Word is reaching us in Beijing, so you must be doing something great!

    • Rui Ma June 17, 2013 at 8:06 pm #

      Awesome post, Kevin, and thanks for the mention!

      @Tom – so exciting what you’ve described, hope to visit you there sometime this summer!

      • Tom June 18, 2013 at 12:05 am #

        @Rui – look forward to it. Reach out to me before hand. I’m always glad to help people coming to Vegas with referrals for their trip. I’m sure you have the start-up scene covered but as far as the hospitality industry is concerned, I’ve lived here for almost 14 years and have worked in the hospitality industry most of that time. I’m always happy to make introductions.

  2. shlomo June 16, 2013 at 12:57 am #

    Kevin,
    I also met Elmira here in Beijing and was very impressed with her work.

    I think the right way to look at it is having SV as a model, or something that happening there and would like to create something as thriving.

    Still we realize now that there are HUGE problems to solve on other markets which nurture other eco systems that are totally different than SV. Innovation on other places is developed through each unique set of problems that place has.

    China has it’s own set of problems to solve and the market here is shifting from a copying culture to solve problems relevant to here.

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