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July 1-15, 1999 My CT Almanac Column |
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IT CULTURE The Secret of The Valley
Sridhar Mitta
Call of the Valley Wipro decided last year to set up a start-up company in the United States to design and license Internet Appliances technology. I relocated to Santa Clara, California, in the heart of the real Silicon Valley. Once called the Valley of Heart's Delight and home to some of the finest wineries, the Silicon Valley is acknowledged as the world's undisputed leading region in innovation and enterprise. A wide spectrum of indicators including economic value addition by technology companies underscores its pre-eminent position. But, what makes the Silicon Valley tick and what is the secret behind its phenomenal track record? In fact, Stanford University's Asia Pacific Research Center has launched 'The Silicon Valley Networks Project' in the fall of 1998. The Project has two-fold mission: to increase the understanding of the essential determinants of Silicon Valley as a world centre of innovation and enterprise and to assess the applicability of the Silicon Valley model to other high technology centres around the world (like Bangalore). It operates under the direction of Professor Henry Rowen and draws faculty from other departments. Early June 1999, the Project sponsored a conference on "Silicon Valley: Center of Innovation". The proceedings of the conference have shed some light on this unique place in the world. The Silicon Valley, like any other cluster of technology development, has supporting infrastructure comprising of knowledge workers, venture capitalists, bankers, lawyers, analysts, consultants, universities, colleges, high-tech companies and the list goes on. These may be termed as hard infrastructure or physical infrastructure. It is the context in which this infrastructure is used or the culture of the Silicon Valley that differentiates it with other centres and wannabes. This, often intangible aspect may be termed as the soft-infrastructure. Professor Miller F. William of Stanford talks about ecosystem of entrepreneurial regions and their habitats. He goes on to describe how the Silicon jungle works and its unwritten rules. In this jungle entrepreneur is the king! He is respected and supported by the entire system. Regis McKenna, a well-known marketing expert explains about how a sophisticated network made of above infrastructure has evolved with the sole aim of abetting the entrepreneur to create wealth. It not only connects the hard infrastructure but has also evolved a set of protocols that allow efficient functioning. The network helps companies start, find new customers, get financing, recruit talent, and identify suitable companies for mergers and acquisitions. The Silicon Valley network is akin to the Internet since it is a network of networks. There are several sub-networks that serve specific communities, nationalities, gender, social background and so on. At the same time this region is above petty differences, that is, totally secular. One such active network for people of sub-continental origin in the Silicon Valley is "The indUS Entrepreneurs" or TiE. It is a non-profit voluntary organisation with the sole aim of providing a forum for people from the Indian subcontinent to network. Currency in Silicon Hues Besides the network culture in the Silicon Valley, venture capitalists have contributed significantly to incubate entrepreneurial activity, developing and cross pollinating new business models and spearheading new technologies and markets. Though there are venture capitalists in other geographies of the United States and in other countries as well, the way they operate and contribute to the network is quite different here. The venture capitalists of Silicon Valley are primarily drawn from among engineers, rather than financiers or bankers; many have started and managed ventures successfully. They are smart, technical, down to earth, and above all willing to take high risks for high returns. There is little stigma attached to failure of an entrepreneur. People deeply believe that discouragement and punishment increases the cost of failure and offers little economic return to the investors. In addition to venture capitalists, there are angels who are wealthy individuals and they assist entrepreneurs in seed financing with their own money in relatively small amounts but actively participate in the formation and development of company strategies. Again, many angels have several start-ups under their belt. In the Silicon Valley everyone understands the local currency-company stocks. Even when a fresh graduate takes up a job, he or she evaluates the company not based on the nature of work, salary and bonus alone but on the stock options it has to offer. At times, it is more like a stock analyst of an investor bank doing due diligence before buying the scrip. When people meet at social gatherings they don't spend time talking about politics or films, but on the performance of stock market and actively exchange tips. In India, its time we started with our own net and most importantly, get it connected to real Silicon Valley through an efficient and high bandwidth "pipe". It is relatively easier to create this pipe than to recreate all the things that make the 50 mile corridor between San Francisco airport and San Jose-the Silicon Valley. The writer is CEO, EnThink Inc., the US start-up of Wipro Infotech |
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The strength of the Silicon
Valley is its infrastructure comprising of knowledge workers, venture capitalists,
bankers, lawyers, analysts, consultants, universities, colleges, high-tech companies and
the list goes on... 
Bangalore, a sleepy pensioner's paradise,
transformed to the Silicon Valley of India around 1980 when Government of India chose to
give priority to the computer industry. Even before that period began, the State
Government had started several electronic industries in thepublic sector like Bharat
Electronics and Indian Telephone Industries-taking advantage of the garden city's moderate
climate as well as good academic and research institutions in the vicinity. Some of the
new companies that took advantage of opportunities in computer sector include Wipro
Infotech, Infosys, and PSI. When the Indian economy opened up in the 1990's allowing
foreign companies to compete in India, Indian computer industry quickly changed its focus
from hardware for the local market to software for global markets. Bangalore became the
hub for a growing number of what came to be called Software Technology Parks. I was
fortunate to be associated with Wipro Infotech since its inception at Bangalore. I have
been a part of India's Silicon Valley that I still love despite recent degradation of
civic amenities and increase in pollution due to growing population pressures. 
