A few insights from my Silicon Valley trip

Last week I took 32 MBA students to San Francisco and Silicon Valley. The students are executives from corporates and government bodies across Australia. We spent a week in SF and the Valley visiting and talking to small startups (Loungebuddy, Stitch, Startmate), more mature startups (HotelsTonight, RangeMe, Shutterfly, Glassdoor, Pulzze), venture funds (the Draper Network, Urban Innovation Fund), more traditional businesses (eBay, Cisco, Adobe), very large “startups” (Google, Airbnb), traditional manufacturers (Vander-bend factory), thought-leaders (Adeo Ressi, Mateo Daste, Gabe Turner) and disruptive manufacturers (Carbon).

Here are some insights from the trip:

1.    There is a very strong sense of optimism around technology and innovation, both in the city and the Valley. This is a change from twelve months ago when there was a significant push-back re venture funding. There is however a desire by the VC funds to invest in startups that can demonstrate solid business models rather than such metrics as the number of downloads.

2.    Buzzwords abound. Everyone is talking about artificial intelligence and machine learning – but most don’t fully understand these concepts.

3.    The divide between the city of San Francisco and Silicon Valley is greater than ever. Traffic congestion (the “commute”) is as bad as ever, and companies all over the Valley want to move to the city (Salesforce as an example).

4.    Good talent is extremely hard to find. Even organisations with highly respected brand names such as Google and Airbnb are struggling to find quality employees. Salaries for talented software developers are through the roof.

5.    There is a common view that life in the Valley is “different” to most other places. The advantage of an environment where there is so pervasive a culture of innovation and a concentration of entrepreneurial talent in one geographical area is unique.

6.    The cachet in having a degree from Stanford or Harvard continues. People with degrees from these universities are as respected as ever.

7.    Every smart organisation is looking to transition to a platform annuity model rather than just selling products and services.

8.    The life cycle of a startup seems to be characterised either by a rapid exit (RangeMe) or a projected lifetime of eight to ten years.

9.    The opportunity for really disruptive technology still exists (e.g. our visit to Carbon) and is embraced by the VC community.

10. Everyone is focussed on the “experience”. In line with our thinking at The Strategy Group, it’s no longer sufficient to sell products or services, what counts is the customer experience.

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