There is only one Silicon Valley
In my 18 years in Silicon Valley (just writing the number is wince-inducing) I’ve debated more times than I can count the question of whether another region could ever be as important a tech hub. Despite my years served, I’ve always considered myself an outsider here. Put differently, I’m no cheerleader for Silicon Valley; I write about it.
That said, I’ve long rejected the proposition that any city or region will ever hold a candle to Silicon Valley in terms of tech companies formed or wealth created. The concentration of money and talent as well as the culture of risk-taking is orders of magnitude greater here than anywhere else. This perspective is not new. The political scientist AnnaLee Saxenian explained it in her seminal book Regional Advantage in 1994.
As Silicon Valley (and its relatively recent capital San Francisco) become more successful, expensive, and obnoxious, however, the argument for alternatives grows louder. GitHub CEO Chris Wanstrath recently told me Silicon Valley will decline in importance because talented programmers can be found everywhere now. He is talking his book, of course. GitHub’s software allows coders to collaborate remotely. That said, he chose to base his company in San Francisco. Why? Despite his prediction for the future, Wanstrath says the talent concentration here today is too important to ignore.
Glenn Kelman, CEO of online real estate brokerage Redfin, offers a different take. He thinks that while the most important “platform” technology companies—Google, Facebook, Apple—must be in Silicon Valley, no one else can afford to be. He recruits his best software developers in the Bay Area, where he was a co-founder of software maker Plumtree. But Redfin is based in Seattle, where employees with other skills can afford to live.
Kelman has data to suggest people are fleeing Silicon Valley. He says that in 2011 one in seven home searches on Redfin originating in the Bay Area were for homes outside the region. Today that figure is one in four.
The center of the technology industry isn’t for everyone, and that’s good for other places with great alternatives. But I’m not buying any arguments for Silicon Valley’s demise, relative or otherwise. I’m reminded of the scene in the film Gladiator when the provincial promoter tells Russell Crowe’s Maximus that nothing compares to fighting in Rome.
It’s the same with Silicon Valley. There is only one.
BITS AND BYTES
Square saves face with IPO pop. The payment tech company ended its first day of public trading at $13.07 per share, up 45% from its $9 offering price. That made co-founder Jack Dorsey (also CEO of Twitter) nearly $1 billion richer on paper. File-sharing software company Box managed a similar feat last January—pricing low and ending high. A final note: Square’s low initial price triggered a clause that requires it to issue additional shares to late-stage investors. (Fortune)
Intel projects modest growth for 2016. In remarks during the chipmaker’s annual meeting, CEO Brian Krzanich forecast “mid-single digit” growth for fiscal year 2016. In 2015, Intel’s overall revenue declined 1% to $55.2 billion. Its results are typically a bellwether for PC companies, but that’s not the case this time—the growth will be driven by its data center and Internet of things business units, which represent about 40% of revenue. (Wall Street Journal)
Google taps secretive VMware co-founder to head cloud strategy. Watch out Microsoft and Amazon Web Services, Diane Greene is coming. Greene—who has been a Google director for three years—was tapped by CEO Sundar Pichai to lead a new organization that combines all of the Internet giant’s cloud services. The move comes after Google bought her mysterious startup, Bebop. (Fortune)
Amazon embraces tighter security measures. Barely one week before the rush of holiday shopping in the U.S., the e-commerce giant is adding optional two-factor authentication. The process, which requires accountholders to enter a verification code after their password, will make it more cumbersome to sign in. Still, account information should theoretically be more secure. (Wired)
Workday tempers growth projections. The human resources software company expects fourth-quarter revenue between $317 million and $320 million. That is just shy of existing analyst estimates but still a 41% year-over-year expansion. (Wall Street Journal)
Splunk CEO Godfrey Sullivan steps aside. Sullivan, who led the big data software company through its 2012 IPO, joined in 2008 after his former company Hyperion Solutions was bought by Oracle. His replacement is Doug Merritt, a former SAP executive who joined Splunk last year after a stint at Cisco. Splunk just reported a stronger-than-expected quarter but its shares are trading at about two-thirds their $92.75 high (in early 2014). (Re/code)
Microsoft HoloLens still work in progress. Volvo plans to use the tech giant’s augmented reality headset at car dealerships starting next year, to show off optional features before an actual test drive. Microsoft is pushing business and education applications over consumer ones, but there are still many limitations, such as a limited field of vision. (New York Times)
Is StubHub back on track?
When eBay plunked down $310 million in 2007 for the ticketing marketplace, Apple had just introduced the iPhone. As smartphone sales surged, a new class of mobile-first ticketing startups—TicketsNow, RazorGator, SeatGeek—emerged, and StubHub fell behind. The San Francisco company languished as its corporate parent sparred with activist investors and ultimately spun off subsidiary PayPal. (Some say StubHub is another spinout candidate.) Last year a new pricing scheme sent ticket sales into a downward spiral, forcing StubHub to backtrack. Chris Tsakalakis, the president who engineered the plan, left.
To replace him, the company tapped someone with a competitive streak and a fresh perspective: Scott Cutler, head of global listings at the New York Stock Exchange. In the six months since he joined StubHub, Cutler has tackled the company’s ugliest problems. Fortune’s Erin Griffith reports on his progress.
MORE FORTUNE TECH COVERAGE
How Instagram raised its tech game by Jonathan Vanian
Square CFO Sarah Friar: This was the right time to IPO by Dan Primack
This is how ISIS communicates online by Don Reisinger
Alibaba launches two new venture funds by Scott Cendrowski
Mark Zuckerberg donates $20 million to bring broadband to schools by Victor Luckerson
Stanford Research could give Nvidia an edge in VR business by John Gaudiosi
ONE MORE THING
Martha Stewart defects from eBay to Amazon. The media and design queen moved her two-year-old American Made store onto Amazon’s new Handmade marketplace, which is the e-commerce giant’s counter to artisan site Etsy. (New York Times)
MARK YOUR CALENDAR
AppSphere: Grow in a software-defined world. (Nov. 30 – Dec. 4; Las Vegas)
CES: The business of consumer technology. (Jan. 6 – 9, 2016; Las Vegas)
Google Ubiquitous Computing Summit: Platforms and protocols for wearables, home automation, and the Internet of things. (Jan. 11 – 12, 2016; San Francisco area)
Connect 2016: IBM’s social business and digital experience event. (Jan. 31 – Feb. 3, 2016; Orlando, Florida)
IBM InterConnect 2016: Cloud and mobile issues. (Feb. 21 – 25, 2016; Las Vegas)
Enterprise Connect: Communications and collaboration trends. (March 7 – 10, 2016; Orlando, Florida)
Microsoft Convergence 2016: Where business meets possibility. (April 4 – 7, 2016; New Orleans)