Located in the southern Bays of San Francisco, California, Silicon Valley is the global hotspot for tech unicorns and black swans. Silicon Valley has become known as the hub for phenomenal innovation and economic growth (Clarke, 2022), and is the home of the headquarters of over 30 Fortune 1000 companies such as Apple, Amazon, Facebook and Google. Due to different political, social and economic influences and ideas, the culture surrounding Silicon Valley is one that values innovation and entrepreneurship, and Silicon Valley has an international reputation for its high success rates (Jones & Sudlow, 2022).
Unicorns of Silicon Valley
The unicorns of Silicon Valley consist of start up companies worth more than $1 billion- a feat that almost seems like a mystic dream, just like the mythical creature itself. Many start ups founded in Silicon Valley has found success, and this is often due to the collaborative and high intelligence culture surrounding the tech hub. Companies such as ThoughtSpot, Rubrik, SoundHound and Quora were founded in Silicon Valley and it’s supportive and prosperous growth rates make Silicon Valley one of the most unique start up environments globally (Cerdeira, 2022).
Black Swans of Silicon Valley
The black swans of Silicon Valley include companies such as Google and Apple that today, dominate the market- businesses that had unprecedented and unpredictable growth rates and were unexpectedly game changing and innovative (Foremski, 2007). Silicon Valley companies as such had a tendency to be successful due to their approaches to development and embracing failure as part of the process of resolving challenging issues. Due to their willingness to take risks as part of the investment process, the low probability of achieving a success, although a statistical outlier, becomes like striking a gold mine once they take off.
Work Culture and Value Exchange
“Microsoft” by Wolfram Burner is licensed under CC BY-NC 2.0.
The success of companies in Silicon Valley is not simply a geographical coincidence, rather one directly related to the culture and values surrounding these companies. Many of these companies offer perks such as free or subsidized coffee or complimentary dinner after a certain hour to encourage their employees to be more productive and stay back working later. Tech giants such as Facebook, Apple, Twitter and LinkedIn to name a few are offered perks as such to boost employee morale and stimulate the local economy (Canales, 2018). By making employees more comfortable in their work environment, they become more willing to work harder and provide value for the company (Delbecq & Weiss, 2000). Hence Silicon Valley has become known for its “work late”, “work hard” and “work fast” environments- the mentality that can potentially detriment a typically healthy work/life balance in exchange for high salaries, bonus perks and inherent success.
Company Hierarchies and Demographics
Due to having a more informal culture and flattened hierarchy within these companies compared to the “typical” waterfall hierarchy, more solutions and ideas can be considered. This structure also eliminates areas for ineffective communication. Another characteristic of Silicon Valley companies is the demographical diversity of employees- whether it be based on race, age, and gender (Delbecq & Weiss, 2000). With many employees immigrating from various locations globally, companies as such attract the top candidates for relevant positions and can account for a wider range of perspectives and innovative minds, creating a fusion culture unique to Silicon Valley (Jones & Sudlow, 2022). For example, the racial and ethnic composition of Silicon Valley has heavy influence from Asian, Hispanic and African American origins in addition to the White and European roots that may be more prominent outside of Silicon Valley within California.
Where are the #Unicorn founders from ? #India #startup #SiliconValley pic.twitter.com/4BCO5rXvjp
— Shyam Varan Nath (@shyamvaran) January 16, 2022
According to the United States Census Bureau, the diversity index within Silicon Valley has been consistently over 70% between 2010 and 2020, which slightly tops the diversity index of California of 67.7% and indicates a bigger variety in the population demographic, especially compared with United States as a whole, with a diversity index of 54.9% (United States Census Bureau, 2020). This range in diversity also plays a key role for Silicon Valley companies to be relevant from an international perspective, especially for start-ups that may struggle to break the international barrier despite being successful within their own country.
Collaboration Culture and the Influences of Web 2.0
Social ideas such as an emphasis on collaboration culture and openness is a strong value at Silicon Valley. Through embodying this mentality and sharing the most effective practices and technologies between tech companies as such, companies and employees can learn from each other and improve their overall productivity and efficiency rates (Herrity, 2021). Having a strong collaboration culture is a key characteristic of Silicon Valley companies, and it allows organizational goals to be achieved through creative solutions and strong foundations within the company. Innovation and entrepreneurial practices as such stem from the dynamics of Silicon Valley cultural roots, and progressive ideas of partnership and alliance for the benefit of future oriented development. This idea of increased cooperation between employees and their networks was based on hippie communities and the spirit of open sharing, which continues to heavily influence the key ideas of the Internet and Web 2.0 today where almost unlimited stakeholders can contribute. Since the introduction of Web 2.0 and the international dependency on the digital economy, by utilizing the increase in potential audience due to such globalization and the relevance of platform economics provides increased opportunities for possible ventures (Mansell & Steinmueller, 2020). This influences the accessibility of new information and technologies as well as sources of inspiration for innovation. Hence, the clustering of high-tech companies in one geographical location has its benefits, making Silicon Valley full of talent demographic, increased networking and more opportunities for inspiration and collaboration.
“Map of ‘Silicon Valley’, Undated” by nathanh100 is licensed under CC BY 2.0.
The War Origins of Silicon Valley
“T54/55 Tank and M60 Patton Tank” by www78 is licensed under CC BY-NC-SA 2.0.
The development of Silicon Valley over time also had heavy foundations based off the infrastructure build up and research during World War II (Meisenzahl, 2020). The gravity of impending war and necessity to prioritize tech development in creating systems and development mechanisms to counter the potential dangers from Nazi Germany (Wallace, 2019). This urgency encouraged the explosion of innovation, which developed into the tech hub that inspired company start ups and instilled the work hard mentality, hence inspiring it’s “complex network of innovation” (Clarke, 2022) that Silicon Valley is known for today.
So why is Silicon Valley so successful?
Many unicorns of Silicon Valley have foundations and connections in already successful companies. Often, founders of such start-ups are employees or partners of existing companies, allowing an open flow of business experience, knowledge and a supported network of professionals in relevant industries. In some instances, companies have also become investors in their employee’s start-ups, and powerful connections as such can be a catalyst for success. Hence, due to the collaborative nature and fast-paced and focused culture surrounding these companies, Silicon Valley has become the most renown geographic hub for successful enterprises.
The Development of Tech Culture and Success in Silicon Valley by Chloe Leo is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Canales, K. (2018, August 1). Cayenne pepper ginger shots, homemade lemon tarts, and Michelin-starred chefs — here’s what employees at Silicon Valley’s biggest tech companies are offered for free. Retrieved from Business Insider: https://www.businessinsider.com/free-food-silicon-valley-tech-employees-apple-google-facebook-2018-7#salesforce-intentionally-didnt-build-a-cafeteria-in-its-new-tower-but-it-does-have-some-free-snacks-8
Cerdeira, N. (2022, March 27). Top 65 Unicorn Startups Founded in Silicon Valley. Retrieved from Failory: https://www.failory.com/startups/silicon-valley-unicorns
Clarke, H. (2022, February 2). The history of Silicon Valley and the Venture Capital industry. Retrieved from Harrison Clarke: https://www.harrisonclarke.com/devops-sre-recruiting-blog/the-history-of-silicon-valley-and-the-venture-capital-industry
Delbecq, A., & Weiss, J. (2000). The Business Culture of Silicon Valley. Journal of Management Inquiry, 37-44. doi:https://doi.org/10.1177/1056492600910
Foremski, T. (2007, September 17). Silicon Valley Incubates Black Swans. Retrieved from Silicon Valley Watcher: https://www.siliconvalleywatcher.com/silicon-valley-incubates-black-swans/
Herrity, J. (2021, December 10). 9 Steps To Create a Collaborative Culture at Work. Retrieved from Indeed: https://www.indeed.com/career-advice/career-development/culture-collaboration
Jones, H., & Sudlow, B. (2022). A contemporary history of Silicon Valley as global heterotopia: Silicon Valley metaphors in the French news media. Globalisations, 1122-1136. doi:https://doi.org/10.1080/14747731.2022.2034308
Mansell, R., & Steinmueller, E. (2020). Advanced Introduction to Platform Economics. 35-54.
Meisenzahl, M. (2020, January 4). 6 crucial turning points in Silicon Valley history that made it the tech capital of the world. Retrieved from Business Insider: https://www.businessinsider.com/key-moments-in-silicon-valley-history-2019-10
United States Census Bureau. (2020). Measuring America’s People, Places and Economy. Retrieved from Silicon Valley Indicators: https://data.census.gov/cedsci/
Wallace, M. (2019, February). Hiding In Plain Sight – The Secret History of Silicon Valley. Retrieved from Internet Salmagundi: https://internet-salmagundi.com/2019/02/hiding-in-plain-sight-the-secret-history-of-silicon-valley/