The Reason You Need To Stop Calling Other Places 'the Next Silicon Valley'

There are many reasons to start tech businesses and invest in places other than Silicon Valley. But it is unlikely they will be able to produce the confluence of tangible and intangible advantages northern California was 'born' with or has been able to create over the sixty years of its existence as a technological mecca.

Smart companies and regions will focus on their unique advantages rather than try to make a case from which they can only suffer by comparison. JL


Anna Hensel reports in Venture Beat:

San Jose and San Francisco receive 40% of U.S. venture capital funding each year. Silicon Valley’s tech ecosystem has built upon 60 years’ worth of failures and successes. That’s 6 times as long as the incubators Heartland cities created have been in existence. A startup that goes on to sell for hundreds of millions of dollars encourages employees to start companies of their own. Utah saw a 300% increase in venture capital funding from 2010 to 2017. But still only accounts for 1.5% of U.S. venture capital funding.
I’ve written previously about finding ways to have better conversations about Heartland startups in 2018. Now I’d like to make one of my own goals public in the hopes that others will join me: Let’s stop thinking of tech ecosystems as trying to be “the next Silicon Valley.”
Comparing Kansas City or Omaha to Silicon Valley is helpful in understanding how large a gap still exists between these cities, but it does little to shed light on the kind of progress tech hubs outside the Bay Area are actually making.
There’s a reason San Jose and San Francisco receive roughly 40 percent of U.S. venture capital funding each year. Silicon Valley’s tech ecosystem has been able to build upon 60 years’ worth of failures and successes. That’s nearly 6 times as long as many of the accelerators and incubators that Heartland cities created have been in existence.

Think of Silicon Valley as a family tree. Most of its startups are either founded by people who previously worked at another tech company in Silicon Valley or they receive funding from a venture capital fund that counts a number of ex-CEOs and entrepreneurs among its partners.
A startup that goes on to sell for hundreds of millions of dollars doesn’t just add another success story to Silicon Valley — it also encourages employees to start companies of their own. One of the most powerful examples of this spin-off effect is Fairchild Semiconductor, founded in San Jose in 1957. Former cofounders or former employees of Fairchild went on to found Intel, AMD, and VC firm Kleiner Perkins Caufield & Byers — all of which continue to play formidable roles in Silicon Valley today.
If you search some of the top tech publications for headlines containing the phrase “next Silicon Valley,” you’ll see that Reno, Salt Lake City, and Detroit have at some point or another been proclaimed the next Silicon Valley (and yes, I’ve been guilty of using the phrase too).
These three growing tech hubs have seen a significant increase in either the amount of venture capital funds, the density of startups, or the number of technology jobs in their city. Utah, for example, saw a roughly 300 percent increase in venture capital funding from 2010 to 2017. But the state still only accounts for about 1-1.5 percent of all U.S. venture capital funding each year. And that’s okay — Silicon Valley wasn’t built in five, 10, or even 15 years.
To be fair, many tech journalists have begun to shy away from labeling cities “the next Silicon Valley” over the past couple of years. But there are still steps media organizations and stakeholders (government leaders, investors, entrepreneurs) in Heartland cities can take in 2018 to more accurately describe their city’s growth.
1) Don’t pitch your city as some variation of Silicon Valley
In 2017, Wisconsin attempted to rebrand itself as Wisconn Valley after securing an agreement from Foxconn to build an LCD factory in the state. This moniker joined Silicon Alley, Silicon Beach, and Silicon Slopes as names cities have adopted to make themselves seem more tech-friendly. As Wired pointed out, these names are hardly original and they don’t do a very good job of explaining what is unique about the city in question. In a similar vein, Dallas, Des Moines, Kansas City, Nebraska, and Indiana have all referred to themselves as part of the “Silicon Prairie” at one point or another — which brings me to point number two.
2) Think about the specific metric that makes a city worth watching
A number of puzzle pieces had to fall into place in order to make Silicon Valley the dense tech ecosystem it is today. Is a city or state seeing an uptick in the number of advanced manufacturing startups? In the number of software jobs? In the amount of government funding earmarked to support startups? Focusing on how a city developed one particular strength might help it garner national attention and even inspire another city that’s struggling with similar challenges.
3) Take a long-term view
Don’t pretend that having one or two successful startups makes it easier to build a company in a particular city. Be honest about what resources a city still lacks, and better yet, highlight the people or organizations that are trying to ease that challenge.