Where did Silicon Valley come from?

Those of us who have had the privilege of working in the premier startup hub in the world often take its advantages for granted. Among those: plentiful financing and nerds, a culture that celebrates both failure and success, and an ethos of openness and sharing. It's useful to look back to understand how we got those advantages. It's not side-effect of some secret mineral in the water: it was painstakingly crafted by people who came before us. And what may surprise you is how many of those people were part of the military-industrial complex.

I think the absolute best reading on this subject is a book called Regional Advantage: Culture and Competition in Silicon Valley and Route 128 by AnnaLee Saxenian. It's an academic treatise that tries to answer a seemingly straightforward question: after World War II, why did Silicon Valley become the undisputed leader of the technology world, while Boston's Route 128 corridor did not. To an early observer, it would have seemed obvious that Route 128 had all the advantages: a head start, more government and military funding, and far more established companies. And although both regions had outstanding research universities, MIT was way ahead of Stanford by every relevant measure. However...

While both Stanford and MIT encouraged commercially oriented research and courted federal research contracts in the postwar years, MIT's leadership focused on building relations with government agencies and seeking financial support from established electronics producers. In contrast, Stanford's leaders, lacking corporate or government ties or even easy proximity to Washington, actively promoted the formation of new technology enterprises and forums for cooperation with local industry.

This contrast — between MIT's orientation toward Washington and large, established producers and Stanford's promotion of collaborative relationships among small firms — would fundamentally shape the industrial systems emerging in the two regions.

The book is really fun to read (how often do you see an academic tome crossed with a real whodunit?). It's important not just for historical reasons, but because we are often called upon to take sides in current debates that impact the way our region and industry will develop. Just to pick one: will software patents, NDA's and trade secrets laws make it harder for people to share knowledge outside of big companies? We need to work hard, as previous generations did, to balance the needs of everyone in our ecosystem. Otherwise, we risk sub-optimizing by focusing only on one set of players.

However, even that fascinating history is not the whole story. You might be wondering: who were those brilliant people who made the key decisions to mold Silicon Valley? And what were they doing beforehand? Steve Blank, who I've written about recently in a totally different context has attempted to answer these questions in a talk called "Hidden in Plain Sight: The Secret History of Silicon Valley." If you're in the Bay Area, you have the opportunity to see it live: he's giving the talk at the Computer History Museum next Thursday, November 20:

Hear the story of how two major events – WWII and the Cold War – and one Stanford professor set the stage for the creation and explosive growth of entrepreneurship in Silicon Valley. In true startup form, the world was forever changed when the CIA and the National Security Agency acted as venture capitalists for this first wave of entrepreneurship. Learn about the key players and the series of events that contributed to this dramatic and important piece of the emergence of this world renowned technology mecca.

If you can't make it, you can take a look at this sneak peak of the slides, courtesy of the author:

Steve Blank's "Secret History of Silicon Valley" talk at Computer History Museum 11-20-08

View SlideShare presentation or Upload your own.

In addition to learning who to thank (Frederick Terman and William Shockley), you'll get a behind-the-scenes look at World War II and the Cold War from an electronics perspective. Fans of Cryptonomicon will have a blast.