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Posted at 09:00 AM ET, 09/26/2011

Innovation and the brotherhood of the Valley


U.S. President Barack Obama (2nd R) joins a toast with Technology Business Leaders at a dinner in Woodside, California. (HO - REUTERS)
Touring Silicon Valley and meeting with the area’s leaders, you see almost immediately that there is an hierarchy similar to a university class structure or a fraternity. There are the fraternity presidents or upperclassmen — established companies that have achieved both financial success and critical acclaim. In the middle are the junior and sophomore treasurers and secretaries — companies that are recovering from an initial spurt of funding and press attention, wondering how best to capi­tal­ize on their new-found fame. And then there are the freshmen pledges — start-ups that are struggling through the rigorous hazing period with or without the guidance of an emerging upperclassman via seed money, angel investment or free advice.

We spoke with University of California Berkeley’s School of Information Dean AnnaLee Saxenian, who shed some light on the culture of Silicon Valley as it relates to innovation.

“There tend to be cohorts in the Valley, people grow up together,” Saxenian said. “So you’re start-ups at the same time. So, there's a sense of your cohort.” And, in the cohort structure, not all companies participate in the same way. “Cisco is giant,” said Saxenian, “but it probably isn’t as tied-in to this.”

“I think you just see these informal communities,”Saxenian said, citing the Fairchildren — the first wave of spin-off companies created by the founding members of Fairchild Semiconductors — as the foundation for today’s Silicon Valley cohort structure. “There are these genealogies in books about where they went, the companies they started. And they have meetings of the grandchildren and the great grandchildren.

“So that sense of being part of a generation is very strong and it happened in the semi conductor industry and the PC industry,” she said adding that the next industry to inherit the cohort structure was social media. “They see themselves as family but only in the sense of being close peers who grow out of similar roots.”

Asked whether today’s social media fraternity in the Valley, combined with some of the copy-cat companies that have taken root (and significant financing), stood to stall innovation in the Valley, Saxenian was optimistic. “I don’t think it’s at a standstill. I think, in the Valley, there’s always a lot going on below the surface that you never see. I don’t even agree that all of the companies are knock-offs.”

“In the mid 80s everybody was complaining, ‘Look, there’re 60 disk-drive companies. This is ridiculous. What a waste of money. It’s all redundancy. This is crazy. It’s slowing innovation.’ All the things that you’re hearing now,” Saxenian said.

“And, in fact, one of the advantages of this kind of redundancy is they’re not exactly the same. Some of them are trying different technologies, different pathways, different ideas,” she said. “You get a lot of innovation out of those different experiments. And it shakes out eventually. And it will shake out. You don’t have all the original semiconductor companies or the original PC companies around anymore. So these markets tend to get flooded and then to get winnowed out, and a few survive and you move on,

“It may look like a bubble,” Saxenian said, “but I just don’t have worries about...it slowing innovation."

Ideas@Innovations is teaming up with On Leadership to speak with some of Silicon Valley’s established and up-and-coming leaders to shed some light on what it means to create, lead and inspire in one of the nation’s most vibrant and innovative regions. This is one piece in this series.

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By  |  09:00 AM ET, 09/26/2011

Categories:  Business, Invention, Morning Read, Technology

 
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