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I think a deeper discussion of what it means to be a technology company and the focus of bay area companies would be a hijack here. But, very briefly, if you v

I think a deeper discussion of what it means to be a technology company and the focus of bay area companies would be a hijack here. But, very briefly, if you view Google and Facebook as "technology companies", we disagree. The closest analogue to Google in terms of business model is a company now called Dex but for decades known as R. H. Donnelley and Sons, which published telephone books and sold advertising in them in the form of the Yellow Pages. Facebook's best analogue is probably a reality television show production company. These companies and many of their brethren are not in the business of developing and marketing new technology. They are in the media business and any technology they happen to develop is a sideshow. It may be used internally and never shared or it may be made open source for any of a number of (usually sound) business reasons, but the development and marketing of that technology is neither the company's primary business nor a significant source of its revenue. If you don't believe me, read the 10-Ks. You are what your revenue says you are. There are many, many other examples. If you look at a random sampling of promotional posts to HN, you will see a cross-section of the entire global economy: retailers (lots of 'em), restaurants, media, manufacturing, and yes, technology. It's fair to say that a lot of people in the bay area are interested in technology, but most of their employers are properly placed in other sectors based on their business models, revenue sources, and other objective metrics. The development of new technology for sale as a business model has been in decline for a long time and is far from dominant in the bay area today. Note that this is not necessarily good or bad. It just is, and reflects a transition among a group of people from developing new technologies to exploiting that technology in more traditional business models.

nostrademons 11y ago
Technology is always a means to an end, though. During the 50s and 60s, the technology being developed in Silicon Valley was all about how to make death rain down from the sky. The first wave of Silicon Valley immigration started with Lockheed's Polaris missile program. Fairchild Semiconductor was financed by a company that got started manufacturing bombsights, machine gun cameras, and spy satellites. Hewlett Packard started out building artillery shell fuses and anti-radar devices. Lawrence Livermore Labs was where nearly every atomic bomb of the cold war was developed. Usually when people talk of the bygone era when Silicon Valley was actually about technology, they're referring to one of two things: 1.) A particular sort of nostalgic history whitewashing where we forget that the money for all of these fundamental innovations largely came from DARPA contracts to find new, more efficient ways to vaporize Russians. 2.) The PC revolution of the 1970s, which started at Intel and PARC and then spread through Homebrew, Apple, and numerous other startups. Both of these apply the benefit of hindsight to what was actually going on at the time. There's plenty of the old Homebrew culture still going on in Silicon Valley - all you have to do is go to Maker Faire to see it. It's just that right now, at this moment, without the benefit of hindsight, it just looks like a bunch of geeks tinkering with toys.
- JoeAltmaier 11y ago
  I thought HP's first product was an oscillator, used in the theramin that produced music for Disney's Fantasia. Or is that an urban legend?
  - nostrademons 11y ago
    That was their first product, but their sales took off because of defense contracts during WW2, growing from $100K in 1940 to millions of dollars by the end of the war. http://www.smecc.org/hewlett-packard_the_start__-2.htm http://www.smecc.org/hewlett-packard_the_start__-2.htm http://www.britannica.com/EBchecked/topic/264529/Hewlett-Packard-Company http://www.britannica.com/EBchecked/topic/264529/Hewlett-Pac...
- fredkbloggs 11y ago
  I'm contrasting mainly #2 (although the source of funds for the development of novel technology doesn't seem relevant in the abstract here, so #1 applies too) with the current state of affairs. In the 70s and 80s, Silicon Valley was primarily interested in making new hardware and software to put inside metal boxes, then selling the box and its contents as the solution to some problem the buyer has (or not). Today, the bay area's "tech" companies are primarily interested in writing or customizing software to solve some set of their own problems with whatever business they're really in. Those are very different ways of making money. Neither is wrong, but I submit that only the former makes you a "technology company". Otherwise every company is a technology company and the term means nothing.
  - nostrademons 11y ago
    You just said "You are what your revenue says you are", so I assumed the source of funds for development of novel technology would be very relevant to you. I'd also disagree on your characterization of how Google/Facebook apply technology, but figured I'd meet your argument where it was instead of where it should be. Having worked for the non-revenue-generating side of Google (which, by employee count, is roughly 2/3 of it), we cared a lot about solving the user's problems, where "users" = people who search, not people who paid us. Google is in a multi-sided market: it's a business that has identified multiple different groups of people, such that all of them gain something from the product and some of them will pay money for it. Larry understands very well that the market collapses if any one of those groups (users, content creators, advertisers) stops using the product, and organizationally Google is (was?) setup with an executive solely responsible to each of those groups who is explicitly told to ignore the interests of the others. There are still hardware startups whose business model is selling a physical "thing" that embodies technology and lets you do things. By and large, though, that segment of the economy is shrinking, as younger buyers increasingly don't want to own "things" and do want to own "experiences". Companies slim down in response to offer the experience their customers desire while retaining ownership of the things that make that possible.

nostrademons 11y ago

Technology is always a means to an end, though. During the 50s and 60s, the technology being developed in Silicon Valley was all about how to make death rain down from the sky. The first wave of Silicon Valley immigration started with Lockheed's Polaris missile program. Fairchild Semiconductor was financed by a company that got started manufacturing bombsights, machine gun cameras, and spy satellites. Hewlett Packard started out building artillery shell fuses and anti-radar devices. Lawrence Livermore Labs was where nearly every atomic bomb of the cold war was developed. Usually when people talk of the bygone era when Silicon Valley was actually about technology, they're referring to one of two things: 1.) A particular sort of nostalgic history whitewashing where we forget that the money for all of these fundamental innovations largely came from DARPA contracts to find new, more efficient ways to vaporize Russians. 2.) The PC revolution of the 1970s, which started at Intel and PARC and then spread through Homebrew, Apple, and numerous other startups. Both of these apply the benefit of hindsight to what was actually going on at the time. There's plenty of the old Homebrew culture still going on in Silicon Valley - all you have to do is go to Maker Faire to see it. It's just that right now, at this moment, without the benefit of hindsight, it just looks like a bunch of geeks tinkering with toys.

JoeAltmaier 11y ago
I thought HP's first product was an oscillator, used in the theramin that produced music for Disney's Fantasia. Or is that an urban legend?
- nostrademons 11y ago
  That was their first product, but their sales took off because of defense contracts during WW2, growing from $100K in 1940 to millions of dollars by the end of the war. http://www.smecc.org/hewlett-packard_the_start__-2.htm http://www.smecc.org/hewlett-packard_the_start__-2.htm http://www.britannica.com/EBchecked/topic/264529/Hewlett-Packard-Company http://www.britannica.com/EBchecked/topic/264529/Hewlett-Pac...
fredkbloggs 11y ago
I'm contrasting mainly #2 (although the source of funds for the development of novel technology doesn't seem relevant in the abstract here, so #1 applies too) with the current state of affairs. In the 70s and 80s, Silicon Valley was primarily interested in making new hardware and software to put inside metal boxes, then selling the box and its contents as the solution to some problem the buyer has (or not). Today, the bay area's "tech" companies are primarily interested in writing or customizing software to solve some set of their own problems with whatever business they're really in. Those are very different ways of making money. Neither is wrong, but I submit that only the former makes you a "technology company". Otherwise every company is a technology company and the term means nothing.
- nostrademons 11y ago
  You just said "You are what your revenue says you are", so I assumed the source of funds for development of novel technology would be very relevant to you. I'd also disagree on your characterization of how Google/Facebook apply technology, but figured I'd meet your argument where it was instead of where it should be. Having worked for the non-revenue-generating side of Google (which, by employee count, is roughly 2/3 of it), we cared a lot about solving the user's problems, where "users" = people who search, not people who paid us. Google is in a multi-sided market: it's a business that has identified multiple different groups of people, such that all of them gain something from the product and some of them will pay money for it. Larry understands very well that the market collapses if any one of those groups (users, content creators, advertisers) stops using the product, and organizationally Google is (was?) setup with an executive solely responsible to each of those groups who is explicitly told to ignore the interests of the others. There are still hardware startups whose business model is selling a physical "thing" that embodies technology and lets you do things. By and large, though, that segment of the economy is shrinking, as younger buyers increasingly don't want to own "things" and do want to own "experiences". Companies slim down in response to offer the experience their customers desire while retaining ownership of the things that make that possible.