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Peter Thiel: Silicon Valley’s monopoly on big growth tech companies is over
- melling 9y agoThat’s not a bad thing. Having more places of innovation is better for everyone. Hopefully, we’ll see more world class research universities too. A Stanford University (or two), for example, in every location.
- bob_loblaw 9y agoMy wife previously worked at Harvard Business School and currently works at Stanford. One of the big differences she noticed is that Stanford encourages students to start their company, while HBS steers their grads towards Wall Street.
- dmode 9y agoThis is not a profound statement, but rather obvious. If may calculations are right, there are roughly 6 billion 993 million people outside of Silicon Valley
- jayjay71 9y agoIt's not a uniform distribution.
- tryingagainbro 9y agoHuh? Me and Warren Buffet together are worth about $81 Billion, it varies daily but around that range.
- CalChris 9y agoAnother way of phrasing that is that if Warren Buffet walks into a baseball stadium, on average everyone there is a millionaire.
- twblalock 9y agoWhy did Silicon Valley ever become what it is, and why did it continue to be dominant in the tech industry for so long, when there were billions of people outside of Silicon Valley the entire time? Clearly population numbers are not sufficient in themselves to explain why the situation will change.
- dmode 9y agoThanks for the down votes. But if you haven't realized, the world has changed dramatically since valley became Valley. There is a lot more wealth distribution around the world and technology is easily accessible. Look at the 50s and look at now and see how Asia has emerged as a dominant economic force. China is #2 in total GDP, and India is #7. Couple this with the fact that these two countries have unlimited workforce, it is quite obvious that big growth companies will start forming outside of the US, often focused on their local market. And capitalizing in capturing a lion's share of the local economic growth. And that's exactly what's happening. Alibaba, Tencent, Didi, Ola, FlipKart, OYO rooms, Grab. This is not some profound statement from Thiel, but something very obvious.
- refurb 9y agoNo actually, it's not that obvious. Look back to the 1980's. I remember watching news clips on TV of people smashing up Japanese electronics because they were taking over the US. It was plainly obvious they were going to displace the US as the leading economic power. Hell! They were buying up all the largest buildings in the US!! Didn't quite turn out that way, huh?
- dmode 9y agoIt is not about "displacing the US". It is about a monopoly being over. Which means, there will be big tech companies from SV, but also from China, India, Indonesia, Korea, Europe etc. etc. And it is already true. Chinese companies raised $56bn last year. The world is also significantly different from 80s. China's GDP in 1980 was $200 bn. Now it is $11 trillion
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- dogruck 9y agoSummary: soon, we will start to see more successful tech companies emerge out of areas other than Silicon Valley.
- kjs3 9y agoThe level of conceit required to think that such things did not exist before, and don't exist now, is awe inspiring.
- tryingagainbro 9y agoMy bet is that still it will be in USA. Among many other things, there's no shame in "failing" in USA. Investors and banks take a chance, fully knowing that most will fail. In a lot of countries failure will follow you for the rest of your life. Not to mention that you'll be broke owing to banks, friends and tax authorities.
- adventured 9y agoThere are only half a dozen or so nations on the planet that can compete with the US at all when it comes to technology start-ups. Nobody else has enough of the required ingredients. For example Sweden has something very interesting going on - yet they are very unlikely to ever produce a Facebook or Google, the fractured European market and cultural system and their tiny local population base is a very big friction point (unless they go after the US market early on, as with Spotify, becoming a proxy US start-up). The rapid lead that the large, unified market of the US + Canada provides, is extraordinary. Only China offers something competitive to that and as an outsider you can't move to China and form successful large start-ups (which is why among their major tech companies, there are no cultural foreigners or non-Chinese running businesses like Tencent, Baidu, Alibaba, Didi, Alipay, etc and there never will be). The US + Canada = near $21 trillion in economy, with extremely high disposable income levels, that mostly all uses/understands English. Fundamentally this is why Europe has struggled so immensely to produce new tech giants in the last 20 years, compared to the US or China. It's not the lack of risk-seeking capital; although that's less than in the US, there is still enough. There is some cultural restraint depending on the country. Mostly though, it's because of how extremely difficult it is to adopt to all the various nation by nation differences early into the life of a product and acquire market dominance in enough of them to then have a strong foundation from which to springboard globally.
- icu 9y agoWith the greatest respect for Mr. Thiel and his accomplishments I'm skeptical. I've travelled the world and my experience is that very few places in the world have America's, often irrational, can-do attitude, appetite for new venture risk, and societal acceptance of new venture failure as an important part of the entrepreneurial process. I just don't think it's that easy to graft these cultural norms to other cultures, let alone replicate the new venture capital, both human and monetary. As someone in London I wouldn't be on hacker news to 'keep my finger on the pulse' if I believed otherwise.
- aaron-lebo 9y agoHe did say SV, which is probably true. Europe may or may not have the culture you are suggesting, China might have that hunger but no business started there is safe from gov control, Russia has that control without the economic growth, a lot of places are too small. But...there's probably a dozen cities in the US where you could get everything you can in SV (ok, maybe not the monoculture, the crazy VCs, the crazy cost of living, and tens of thousands of programmers). There are massive advantages to getting out of the Valley, someone is going to realize that, if it hasn't been obvious for a decade.
- tomaha 9y agoI agree that there are nice options in the US and you'll have a much more comfortable life. But if you want to learn as much as you can, if you want to have as many options as you could possible have, and quiet frankly earn as much as you could, you'll likely should move to SV and no other place in the US will even come close to that. The bleeding edge of technology is and will be in SV and China (and China is not really an option for most people).
- aaron-lebo 9y agoYou can learn an unbelievable amount sitting in your room in your underwear and work with and on world class projects. There are more free resources than ever before, location is not a constraint.
- y_u_no_rust 9y agogood silicon valley is a dumpster fire
- curiouslurker 9y agoCould he just be pandering to his hosts? The concentration of talent and a whole ecosystem that supports entrepreneurs is a significant advantage. It will take time for any other region to amass the same advantages.
- aaron-lebo 9y agoTalent is remote and talent is willing to move, especially when they can make an extra 50% through cost of living differences. That ecosystem produces some great stuff, but a lot of it is garbage. Those advantages are perhaps overstated unless your goal is to move to SV and become a unicorn. It's almost tautological.
- adventured 9y ago> but 90% of it is garbage. That's inherent to the process of all creation and business starting. 90% of everything is garbage. That's a case where there's nothing unique about Silicon Valley. I'm sure you're at least vaguely aware of the very high failure rate of all new businesses within just a five year span. Or see: last 200 years of industrial history. There were hundreds of automakers just in Detroit in the US, experimenting with just about everything they could. Most of it was garbage. It's a required part of the process of experimentation. If someone stands up and proclaims that aspect is stupid and a waste and they know better (they'd never make such mistakes, they'd never need to perform such wasteful experimentation), well, at least then you know who you're dealing with.
- aaron-lebo 9y agoIt was an observation, not a normative statement. The only part anyone really cares about is the 10%, so if your goal isn't to have an ecosystem that is always churning through stuff, that aspect isn't a huge advantage.
- adventured 9y agoThere's no such thing as an ecosystem that isn't always churning through stuff (other than a dead one). The premise you're floating doesn't exist. Silicon Valley's 10% is better than the 10% anyone else produces. It also does it at a higher volume simultaneously. That's why it's Silicon Valley and nobody has managed to match it in the last 50 years.
- 11thEarlOfMar 9y agoOne of the attributes of The Valley that are not easily reproduced is the forced cross pollination of knowledge and experience among the tech work force. This is forced through layoffs as companies, industries and the economy run through their cycles. This cross pollination leads to several outcomes: 1. the workforce is diverse in experience; 2. employees tend to work harder and longer hours in order to keep their job; 3. employees that are released from projects that they still believed in are more likely to take that project elsewhere, or, seek funding themselves. These cycles work like a bellows, re-shuffling engineering teams en masse and thereby fueling innovation. It's actually pretty painful, but is an important factor and remains unique not in the fact that it happens, but in the scale that it happens in The Valley.
- vikiomega9 9y agoIs there a model for this? I'm asking because cross pollination can happen through other means. High density of conferences, strength of networks among other means. This argument is reminiscent of reformations and the political landscape of Europe way back when.
- stcredzero 9y agoThis argument is reminiscent of reformations and the political landscape of Europe way back when. Frank Herbert, the author of the Original Dune books, once made the observation that corporate hierarchies are very much like feudal hierarchies.
- kevan 9y agoWhy do you think this is unique to the valley? At a first glance every major metro area has this, what's so different?
- rdiddly 9y agoThere really is no rational reason why the phenomenon of Silicon Valley should exist. And at this point if there were anything special Silicon Valley knew that nobody else did, that knowledge has been pretty widely disseminated. And yet for all that, I suspect he's still wrong.
- rothbardrand 9y agoHe's right, but "Silicon Valley" only exists in the minds of silicon valley maximalists who live in a bit of a filter bubble.
- adrianratnapala 9y agoNo idea if Mr. Thiel is right in this decade, but long term silicon valley has lost its main advantage: silicon. The physical business of building computer parts, especially chips, involves a lot of hard science and deep magic and requires a kind of priesthood steeped in that magic. SV's original success was built on this -- it got rich because it is where the silicon priests lived. But now things have evolved so the it is the Chinese who know how to build the computers and (sometimes) the Californians program them. Except writing apps is not really deep magic, and is something that can be done anywhere. So SVs advantages move to ever more nebulous things like networking and mentorship -- which are also human universals that happen everywhere.
- CalChris 9y agoAn argument can be made that when it was first called Silicon Valley it should have been called Metal Oxide Valley. Originally, SV lived off defense, then made disk drives and now Google, Apple, Facebook, Oracle, ... reign supreme. I think SV will continue to shape shift. It is however, getting kinda expensive.
- abritinthebay 9y agoSilicon Valley has not been about the raw production of silicon chips for over 30 years now. It's been about software and design of hardware for at least that long. You're also ignoring the networking advantages (personal, career, and business) that proximity provides. They are not trivial. It's why SV has stuck around post dot-com.
- B1FF_PSUVM 9y agoIt's almost like the VCs in whatchamacallit road tell everybody else to telecommute, but they themselves don't care much about moving around to keep an eye on the troops. Lazy bas --- err, I mean, damn efficient, well done, old beans. (Screw the cattle who have to deal with the fallout. Not adding value.)
- leggomylibro 9y agoIt's a shame that this happened, but you can see how it did. Those chips were built on the fervor of people imagining what we could someday do with them. They could create a connected world, solve and create so many problems on a global scale...it's not super surprising that their successors went on to do those things. What is surprising, and shameful, is how investors reacted, buying into the mania hook line and sinker. There cannot be a Bell Labs or Fairchild Semi in silicon valley today, because they could not promise 10,000,000% user growth and a massive acquisition in N years. It seems like the market equivalent of snorting pixie sticks instead of eating a balanced meal, but I'm not the person with billions of dollars to swing around.
- davesque 9y agoI suppose when you support and promote a fascist to run the country, it's only logical that you'd then turn around and predict the country's tech economy will fail and that people should look elsewhere. That's one helluva long play, Mr. Thiel. Well done...well done.
- replicatorblog 9y agoThis is already happening. Just look at the drone industry. DJI, founded in Shenzen, has 87% market share at the most popular price point, and 48% share in the next closest. This is an $8B market and will likely double or triple in the coming years. US companies won the web, but China is making a run for the IoT. http://www.marketwatch.com/story/businesses-want-cheaper-drones-so-parrot-is-selling-them-2017-10-24 http://www.marketwatch.com/story/businesses-want-cheaper-dro...
- smaili 9y ago> The concentration of global tech companies in one small region in California has been a peculiar feature of the industry. Couldn’t the same be said about Hollywood in LA or Wall Street in New York?
- komali2 9y ago>You just need some talented people... Well, yea, hence silicon valley. Like begets like - if there's a place where all the best engineers are hanging out, why wouldn't a budding engineer head out there? This is literally why I moved to San Francisco from Houston :P And then, the best of the best engineers making oodles of money are probably not going to want to live in like, Michigan, growing tech sector or no. Give up good weather, quick access to great vacation spots (mexico, vegas, anythign over the pacific, all the national/state parks...), legalized weed, etc? Nah man. edit: My language is assertive but I am very open to being challenged on this.
- junkcollector 9y agoSure, you're making a mistake that is very common around HN. You're conflating technology and programming. If you wanted to study chemistry and be a chemical engineer, Houston is absolutely where you would be flocking to instead of SF. I think the next big tech market is going to be medical and genetics which means Minneapolis and Boston are the places to be watching.
- perfmode 9y agoVegas?
- csomar 9y ago> speaking at the Future Investment Initiative in Riyadh, Saudi Arabia, Thursday. Should we be more careful since this was said in an investment fund which is not located in Silicon Valley? Or should we trust Peter for his words?