September 2011 | Riviera Partners
The High Tech industry is known for its continual state of flux and evolution. For years, people have looked to the Silicon Valley as the mecca of all things digital. However, times are changing and technological advancement is no longer limited solely to the Silicon...
The High Tech industry is known for its continual state of flux and evolution. For years, people have looked to the Silicon Valley as the mecca of all things digital. However, times are changing and technological advancement is no longer limited solely to the Silicon Valley. New startups like Foursquare and Etsy are making names for themselves in New York City while Zappos, a Riviera client, continues to enjoy success in its Las Vegas home.
There seems to be a growing population of people who believe that the days of Silicon Valley being the#1 hotbed of innovation are numbered. We’ve spoken with some extremely bright people outside of the Valley and have been witnessing great out-of-state companies change the way we use technology. Everyday, arguments from both sides of the issue are made as to which urban cities will be the next hotspots. However, after much thought and reflection upon my experience within the high-tech field, I have reached my own conclusion on the given matter: While other cities strive to be the technology hub of the future, Silicon Valley will always retain the crown. Simply put, there is no place like the Valley – the foundational history of all things tech start and end here. As Mikkel Svane, founder and CEO of Zendesk, said, “Access is easier [in the Silicon Valley] money, talent, the right people.” The Valley’s days are not numbered and here are the main reasons why:
The Valley ecosystem breeds prime talent pools of people who understand the culture, speed and innovation necessary to create successful products. When Chief Data Officer, Mark Johnson of Groupon, a Riviera client, was looking for mobile developers, he knew to look in the Valley first. “You can find [people with this knowledge] anywhere, but Silicon Valley certainly has a high density population of people with these skills,” said Johnson. The Valley has been attracting tech talent for years and companies are trying to tap into this source by any means necessary. As companies grow quickly, the need to expand rapidly is key and with so much competition for top talent, companies are bolstering their lists of amenities to coax key individuals. Companies are shelling out free meals, shuttle rides to and from work, pet-friendly office spaces and much more all in hopes of enticing great people. Working in the Valley allows talented individuals a unique growth track that has not yet been proven replicable in any other area.
There is a common mantra of companies working in the Valley: “Get it right, get it fast.” Whether startup or high-tech giant, speed is a crucial component of company success. Successful companies are quick to make decisions, adapt to changes and solve problems – this is especially important for companies trying to differentiate themselves from competitors in saturated markets. The typical Valley company is geared toward speed and has an operating structure where partners and key decision makers are usually close at hand. Today, lunchtime meetings and informal happy hours are effective in accomplishing what video conferencing and short on-site stints struggle to achieve. Since executives aren’t necessarily dispersed around the country, team members can quickly come together when collaboration is needed. This level of access encourages quicker execution, offering companies heightened levels of agility and competitiveness within their market space.
From San Jose to San Francisco, companies eat, sleep and breathe technology on a daily basis. Some things simply cannot be gleaned from only reading about them in tech blogs and magazines. The Valley has a unique culture which caters to innovation and collaboration. People are willing to do things unconventionally and constantly push the envelope in hopes of creating “the next big thing.” Perhaps most importantly, there is also a wealth of financial support available to help fund such ideas. Venture Capitalists understand the potential that startups posses when motivated by such a culture. According to PriceWaterhouseCoopers, 40% of VC funding in Q2 2011 came out of the Silicon Valley. It is probably safe to assume that this is one of the most significant reasons why we’ve historically seen a steady flow of East Coast companies migrating out West. Case in point, look at Dropbox circa 2007-2008. The founders had a great idea, but needed more traction – in the end, they moved their company from Cambridge to San Francisco. After successfully pitching a handful of Valley investors they were able to build upon their vision. Fast forward a few years and today Dropbox is a cloud-storage powerhouse.
One can almost tout that given its history and its very design, the Silicon Valley isn’t going anywhere; it will simply keep evolving as the market changes.
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