Years ago, I wrote about a burgeoning proposal to encourage the Palo Alto city government to turn University Ave. into a pedestrian promenade - a road without cars where people can feel free to spill into the center of the street and walk around. The possibilities in terms of urban development are extensive: fountains, trattoria restaurants, community spaces, green space, additional shops and street vendors are just some of the options that open up without cars taking up the street.
Palo Alto has obviously been hesitant to investigate the promenade proposal, and not without good reason. Downtown Palo Alto these days is more of a business destination than it is a shopping or culinary district. That isn't to say that there aren't good restaurants in the city, or a lively performance scene, but the city has certainly kept its priorities for the area quite clear.
That discussion aside, I just visited Los Angeles last week, and stopped by Santa Monica to visit the beach. This city has truly focused on providing the very best in urban planning and design, and the results are magnificent. The city has redeveloped 3rd Street as a pedestrian promenade, and the result is every bit as positive as I and others envisioned three years ago for Palo Alto.
First, I want to point out some of the beautiful modern architecture located in this district. The area has several distinctive hotels and shopping areas that are certainly worth a look. The Shore Hotel, which is located right on the beach, provides a distinctively modern and industrial feel in its architectural style. Every hotel room also gets a full balcony for viewing the city or the beach depending on which side of the building the room lies on.
In preparing my research on Korea's entrepreneurial ecosystem these past few weeks, I have been thinking a lot about what makes my home, Silicon Valley, so successful as a tech entrepreneurship hub. There are many unique qualities, from the way people and capital move, to the unique business culture that permeates companies here.
What I want to talk about, though, is the rapid way ideas travel in the region. One of the benefits of the Valley is the sheer number of people that do tech here. Engineers, start-up founders, financiers, and everyone in between are abundant. If you are riding in public transit in San Francisco these days, it is quite possible that you will overhear a tech conversation. Ditto in a bar, a restaurant, a Giants game. It's all consuming.
These same tech conversations happen at parties here all the time, and leads to the three most important words at the heart of Silicon Valley's success (and really, the success of any geographic industry cluster). I'll initiate a chat with someone, and we go back and forth about work or some common interest. Then, one of us inevitably introduces a new conversation thread with the words "have you heard."
Those three words are core to the way ideas travel throughout the region. In some of my conversations, I have gone through six or seven rounds of these sorts of conversation threads, each one introducing new information that I had not yet acquired from other, more general news sources like TechCrunch or VentureBeat. The accumulation of these stories and notes represents the heart of the "throbbing knowledge" that percolates among tech workers.
At times, I think that people in the region don't fully comprehend the magnitude and importance of these conversations. Indeed, they are so commonplace
The New York Times and others are reporting on recent changes coming from North Korea:
Since July, various news reports in South Korea have quoted anonymous sources in the North as saying that Mr. Kim planned to give factories and collective farms incentives aimed at increasing productivity. The state would let farmers keep 30 percent of their yield, the reports said; until now, it is believed that they could sell only a surplus beyond a government-set quota, which was rarely met. Factories would choose what to produce and how to market their wares, splitting any profits with the state and paying their own workers.
It is difficult to make much of these sorts of changes (and despite a strong interest in North Korean economics, my reading of the tea leaves is about as random as anyone else's). When we look in a black box, we cannot expect to completely understand its levers, and North Korea is about as closed of a box as can possibly exist.
Nonetheless, it is clear that the North faces many disparate issues that are converging to make the leadership concerned. Economic sanctions, heavy flooding, low industrial output, the collapse of the Kaesong Industrial Complex, etc. are all putting renewed pressure on the regime. Perhaps the survival instinct will begin to inch the regime forward.
Economists often talk about ideals - free markets, perfect competition, free movement of labor. They use these ideals as a model to explain phenomena in the real world. One of the important findings discovered in innovation studies is that innovation has a high correlation with open competition and free markets. In short, the ideal environment for innovation is in many ways the ideal environment posited by economists.
But ideal economies are the topic of academic research papers. In the real world, companies, industries and entire countries often work hard to prevent open competition. There are many different facets to this issue. In some cases, there might be a legitimate case for tampering with the free market - for instance, a government penalizing externalities such as pollution. But in other cases, it can be difficult to defend the market intervention.
It was hardly surprising: A jury in San Jose, California, delivering a one-sided verdict for Apple over Samsung Electronics in a legal battle over smartphone technology. It is the “American style” of doing things when their interests are threatened. It is the yardstick Americans have stuck to in every economic and business battle. Anything that Americans are not tops at is evil and dangerous.
...
To build a country and defend one is not the same work. It is not entirely wrong to claim Americans discovered, invented and created almost every modern cutting-edge technology. They were great builders, but not such good defenders. If they had
Yong Zhao had a story earlier this summer about the correlation between entrepreneurship and test scores as measured by the Trends in International Mathematics and Science Study. Based on his statistical research (and really just looking at the darn graphs), there is a distinct negative correlation between the scores on the math section of the TIMMS tests and general entrepreneurship levels as rated by the Kauffman Foundation.
I will accept these numbers as they are. However, I would like to make a handful of observations:
It is difficult to use TIMMS to make comparisons between the United States and other countries. South Korea, Norway, and to some extent, Singapore, all benefit from strong central governments with relatively homogenous populations. The United States has this horrible bi-modal skew in its data: while our average performance is fairly low compared to many other industrialized nations, we simultaneously have a lot of top and bottom performers. This nuance is lost when we merely look at averages. This problem of averages also applies to the entrepreneurship ratings as well.
As an alternative hypothesis, I would like to emphasize this point when it comes to entrepreneurship - diversity is good. Silicon Valley is one of the most ethnically and linguistically diverse places on Earth. That doesn't mean every group is represented, but as a region (if not in the workforce), this region draws people from around the world. Vivek Wadwha has shown that about 25% of engineering companies are founded by immigrants in the United States. This is interesting in light of the homogeneity of the top countries in terms of test scores.
Given this alternative explanation, I think it is healthy to note the reality of the data. These sorts of correlations are interesting, although there are probably a dozen of potential reasons why
Computer scientists and software engineers, particularly those who specialize in web technologies, are some of the most desirable workers currently in the labor market. Undergraduates from the nation's top schools are starting in the six figures at major corporations, or joining start-ups with significant equity. In many ways, the world is their oyster.
Yet, a number of these graduating engineers are turning their back on the field. Their reasons tell a lot about the current engineering culture in the Valley and the choices companies must make in the coming years to continue to attract and retain top talent.
Within the last few months, more than a dozen of my close friends from Stanford have taken non-engineering jobs with their bachelor's degrees in computer science or other technical disciplines. These aren't washouts - several of them are among the top graduates of their class year. All of them have had internships (or full-time jobs) in the field, and they have effectively sampled the offerings from the most prominent Silicon Valley corporations and start-ups. They seem almost destined to join engineering teams.
Yet, they will be choosing other careers. While they have had diverse experiences, their complaints are largely the same. The most common fear among them is that their skills are getting clustered too closely - that their work rarely lacks any kind of broad thinking. As coders, they are often given small scope to make changes in a large corporation, and they are often left to handle "the technology" at many start-up companies.
While some coders may enjoy the high specialization, others prefer a more broad set of duties. Several of my friends have turned to product management, business development, or finance in order to get this more diverse experience, depending on the distance they want to put
I promised not to bring up the patent case again, but today's debates infuriate me. Farhad Manjoo, a staff writer at Slate, wrote about the Samsung/Apple patent verdict today. He argues that Samsung is ultimately the final victor in this fight in the greater context of the cell phone industry:
But if you study what’s happened in the mobile industry since 2007, a different moral emerges. It goes like this: Copying works.
Of the three paths open to tech companies in the wake of the iPhone—ignore Apple, out-innovate Apple, or copy Apple—Samsung’s decision has fared best. Yes, Samsung’s copying was amateurish and panicky, and now it will have to pay for its indiscretions. But the costs of patent infringement will fall far short of what Samsung gained by aping Apple. Over the last few years, thanks to its brilliant mimicry, Samsung became a global force in the smartphone business. This verdict will do little to roll back that success.
And for me, the real kicker:
Yes, it was clear that many of Samsung’s ideas weren’t original. But customers don’t care about originality—if they did, Windows wouldn’t have won the PC world, and we’d all be using Friendster instead of Facebook.
Manjoo often writes these contrarian, blog-bait pieces (I guess it works - I am even commenting on it). Robert Scoble, one of the most followed bloggers based in Silicon Valley, had similar thoughts:
I think this is actually a sizable win for Samsung
Why? It only cost $1 billion to become the #2 most profitable mobile company. Remember how much Microsoft paid for Skype? $8 billion. So, for 1/8th of a Skype Samsung took RIM's place and kicked HTC's behind.
Samsung should “stop fighting it,” says James Rooney, chairman and CEO of the Seoul advisory firm Market Force. “It’s time to stop copying others. Samsung would be far better advised not to fight it. To continue fighting it is to give themselves a bad name.”
Despite the massive repercussions that could arise from these rulings, I find this patent litigation tedious and rather boring. These cases always end up being extremely technical, and are usually better windows into the American legal system than any notion of innovation. For instance, there has been controversy that the jury moved too quickly to make a judgment and ignored significant evidence.
My personal prediction has been that Apple and Samsung will settle the case after the judgment, and that was echoed in the CSM article as well:
“They clearly have an enduring relationship,” says Morris. In the end, he believes, Samsung should pay to license Apple intellectual property. “Appeals will be difficult,” he says. “I doubt if they can overturn the outcome.”
This is a logical outcome, but it would be a shame if Samsung failed to take the message of these proceedings to heart. Internal innovation is ultimately more lucrative - the company can sell better products to more customers and build mindshare among consumers as a leading innovative company. To do that though, the company is going to have to adapt, and it so far has shown little willingness to do so.
Hi, I'm Danny. I'm Head of Editorial at VC firm Lux Capital, where I publish the Riskgaming newsletter, podcast, and game scenarios. I'm also a Fellow at the Manhattan Institute in New York. I analyze science, technology, finance and the human condition.
Formerly, I was managing editor at TechCrunch and a venture capitalist at Charles River Ventures and General Catalyst.
