Category Archives: Silicon Valley and Europe

The myth of the entrepreneur – Undoing the imaginary of Silicon Valley (3/3)

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This is a very slight follow-up to the 2 posts about Galluzzo’s The Myth of the entrepreneur. The link is very weak: is Silicon Valley mostly about story telling or is it more about a complex technology cluster? As I combine both on this blog, I just add a look at what I wrote over years. It may look like an “ego trip” sorry, but it will be my online archive too! Yes there is a lot of storytelling, but there is also some research using statistics and tons of data…

Visiting Scholarship

How the state can be a venture capitalist? January 2019. Visiting scholarship at International Monetary Fund, Washington DC, USA. Draft of report available on demand.

Books and publications relevant to Innovation and Entrepreneurship

H. Lebret, Are Biotechnology Startups Different? April 2018. https://arxiv.org/abs/1805.12108

H. Lebret, Equity in Startups, September 2017. http://arxiv.org/abs/1711.00661

H. Lebret, Startups and Stanford University, August 2017. http://arxiv.org/abs/1711.00644

H. Lebret, Startups at EPFL, June 2017 papers.ssrn.com/abstract_id=3317131

H. Lebret, What Europe still has to learn from the US in academic innovation in Academic Spin-Offs and Technology Transfer in Europe Edited by Sven H. De Cleyn (Chapter 12), Edward Elgar Publishing Ltd. 2016 ISBN: 9781784717377

H. Lebret, Start-up, A Culture of Innovation, Amazon.com – March 2016
H. Lebret, Start-Up, une culture de l’innovation (French Edition), Amazon.com – Mars 2016

H. Lebret, Age and Experience of High-tech Entrepreneurs, Babson College Entrepreneurship Research Conference 2014
H. Lebret, Age and Experience of High-tech Entrepreneurs, Journal of Business and Economics, vol.5, nb.12, pp.2327-2336. DOI: 10.15341/jbe(2155-7950)/12.05.2014/013

H. Lebret Serial Entrepreneurs: Are They Better? – A View from Stanford University Alumni. August 2012. Babson College Entrepreneurship Research Conference (BCERC) Frontiers of Entrepreneurship Research: Vol. 32. http://dx.doi.org/10.2139/ssrn.2133127

H. Lebret Stanford University and High-Tech Entrepreneurship: An Empirical Study, April 2010, Babson College Entrepreneurship Research Conference (BCERC) Frontiers of Entrepreneurship Research: Vol. 30: Iss. 5, Article 10. http://dx.doi.org/10.2139/ssrn.1983858

H. Lebret Start-up, What we may still learn from Silicon Valley, November 2007
http://www.amazon.com/Start-up-still-learn-Silicon-Valley/dp/1434820068
CreateSpace – ISBN – 1-4348-2006-8
H. Lebret Start-up, ce que nous pouvons encore apprendre de la Silicon Valley, December 2007
http://www.amazon.com/Start-up-pouvons-encore-apprendre-Silicon/dp/1434817334
CreateSpace – ISBN – 1-4348-1733-
www.startup-book.com A related blog where I update news about start-ups, Silicon Valley and Europe.

H. Lebret, J.-A. Månson, P. Aebischer. The EPFL approach to Innovation Universities and Business: Partnering for the Knowledge Society – Luc E. WEBER and James J. DUDERSTADT (eds)
Publisher: ECONOMICA, ISBN 2-7178-5190-9 – First published 2006

A. Catana and H. Lebret, Technology Transfer at the EPFL Europhysics News (2004) Vol. 35 No.6

G. Zocco and H. Lebret. Quality start-ups will always find financing. Les start-ups de qualité trouveront toujours du financement. AGEFI, supplément au numéro 198, 15 octobre 2001

The publication of the two versions (French and English) of “Start-Up” induced invitations to publications (in chronological order) that can be found on the blog

– Success story – quarterly contributions to Créateurs newsletter
Adobe – John Wanorck et Charles Geschke – mars 2009
Genentech – Bob Swanson et Herbert Boyer – juin 2009
Femmes entrepreneurs – Carol Bartz et Sandy Kurtzig – septembre 2009
Un européen dans la Silicon Valley, Aart de Geus – décembre 2010
Un Suisse dans la Silicon Valley – Edouard Bugnion – mars 2010
Give back to the community – Swissquote – juin 2010
Une manière suisse d’entreprendre ?– octobre 2010

– Federation of Entreprises Romandes (initially in French)
Pourquoi les grands succès dans le domaine des nouvelles technologies sont-ils dans l’immense majorité issus des États-Unis ? December 2011
About the challenges of innovation. March 2012
Is Intellectual Property out of Breath? August 2012
Failure is a learning experience. December 2012
Does the Swiss culture tolerate failure? July 2013
The Immigrant, Factor of Creation. January 2014
A Look Back at the Swiss February 9 Votation. February 2014
Innovation and Society: are the Returns and Benefits Sufficient? June 2014
“You have money, but you have little capital.” February 2015
Why doesn’t Europe create any Google or Apple? August 2015
Myths and Realities of Serial Entrepreneurs. May 2016
The digital revolution: stakes and challenges (for Switzerland). November 2016
Virtual Innovations? May 2018

– Start-up chronicles on EPFL Web Site- http://actu.epfl.ch/search/start-up-epfl/
Medtech, Good for Switzerland -January 2013
Two EPFL Start-ups Take Off in Tandem – October 2012
What’s a start-up worth, or reflections on Facebook’s IPO fiasco – August 2012
Start-ups hiding six feet under – June 2012
Kandou and investment – April 2012
SWISSto12 – Of Start-ups and Men – March 2012
Aleva – is venture capital a universal solution? – February 2012

Internal reports and presentations (chronological order)
Most content available on Slideshare – www.slideshare.net/lebret/presentations

 A few facts about academic spin-offs – Nov 05
 A brief history of Google – Jan06 and updated 2013
 A trip in the Silicon Valley – May 06
 Academic spin-offs: some anecdotal evidence from a Stanford University Lab – Jun 06
 The EPFL Innovation Forum – Aug 06, Oct 07, Nov 08
 EPFL start-ups –analysis ongoing since Sept 06
 The Innovation Support around EPFL – ongoing since Sept 06
 SW/IT: a workshop on entrepreneurship – Oct 06
 Equity split in starts-ups – Oct06
 Why is the US Innovation System better? – SEISGE EPFL workshop – Oct 06
 A brief history of venture capital – Nov 06 and updated 2012
 Course MINT – Evaluation of an invention potential (2004-2009)
 Course VENTURE LAB – Intellectual Property (2005-2009)
 Founders at Work, Betting it All, In the Company of Giants – Notes from the Books – Jun-Dec 08
 Stanford start-ups – in progress (October 08- September 09), a study on 2’500 small companies.
 Examples and synthesis of academic licenses to start ups – May 2010
 Equity in high tech start-ups with venture capital – 2010 and updated 2012, 2014, 2017
 The venture capital process – December 2012
 Ten ideas to innovate in uncertain times – November 2015
 Is Switzerland a Startup Nation? – October 2017

The myth of the entrepreneur – Undoing the imaginary of Silicon Valley (2/3)

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I have finished reading Anthony Galluzzo’s book which I already mentioned in part 1 a few days ago. I hesitate between irritation and a more positive appreciation because I do not know if the author simply wants to undo the imaginaty of the region or to criticize its functioning more broadly. Indeed in the last two pages of his excellent book he writes: “After reading this book, some may wonder about the possibility of “undoing” the entrepreneurial imaginary; not only to deconstruct it, but to lead it to defeat”. Then he adds: “Many commentators have already noted this: to undo an economic and social system it is not enough to demystify the beliefs and refute the syllogisms conveyed by its ideology. It is also necessary to simultaneously think of another economy and another imaginary, to make other desirable representations and incarnations of human existence prosper.”

Silicon Valley as an ecosystem and its dark sides

I do not know what to think. An imaginary does not make a system, even if it is undoubtedly an important ingredient. Behind story telling and the myth of the heroic entrepreneur, there is an ecosystem that Galluzzo talks about more in the interview he gave to Echo (To understand the economy, you have to tell it through ecosystems, not trhough individuals – Pour comprendre l’économie, il faut la raconter par les écosystèmes, non par les individus) than in his book. Silicon Valley is an ecosystem and not (just) a myth factory to hide a darker situation [1].

Of course, there are dark sides in Silicon Valley. He shows it well in the beginning of his book, which I relate in my previous post, for example through the war for talents or the invisibilization of the State. His description is darker and darker in the end, even if the new elements are just as true:
– a glaring imbalance in the population of entrepreneurs with few women or African Americans,
– an under-representation of trade unions which would have deserved a more in-depth analysis,
– employees at the bottom of the ladder who are less well treated (assuming that these jobs have not been relocated),
– an unbalanced taxation [page 206] which would also have deserved a more in-depth analysis.

Galluzzo mentions tokenism as the reason for story telling. In the sociological literature, the practice of symbolically integrating minority groups to escape the charge of discrimination is called “tokenism” [Page 204]. Galluzzo also admits that there is not always story telling. Larry Page and Sergey Brin, the creators of Google are at the origin of one of the main powers of Silicon Valley and yet are relatively unknown to the general public. They have always been quite discreet, with rare and well-defined speeches. They did not invest in storytelling and personal branding [Page 218]. Nor does Galluzzo mention the thousands of unknown and often failed entrepreneurs who are a vital component of the region.

He adds that Silicon Valley would have flourished with almighty Thatcher neoliberalism. But it seems to me that he forgets that Silicon Valley really flourished in the two preceding decades, that of the 60s (Fairchild, Intel) which allowed the development of semiconductors and that of the 70s (Microsoft, Apple) for computers . He seems to forget, even if he mentions it, that without the structuring of venture capital in these two decades, but also without the arrival of highly qualified migrants in the decades that followed, there would probably be no such Silicon Valley such as it exists (and not as it is mythologized). I don’t think the subject is so “swept under the rug”. As early as the 1980s, a relatively mainstream author showed the darker sides of the region in his book Silicon Valley Fever. You can also read The Capital Sins of Silicon Valley.

What is an entrepreneur?

The pages [pages 196-98] on the definition or traits of an entrepreneur are also very interesting.

How to define the “entrepreneur”? A first approach consists in considering him simply as a business creator: someone who starts and organizes an economic activity. We mix the small craftsman and the big boss; the baker and the wealthy start-up founder. To focus on the latter, should we add to our definition an order of magnitude as to the economic success of the company and if so, which one? Should we limit the category to those who have founded a small business in hyper-growth? Another solution is to introduce the notion of risk. The entrepreneur would be the one who mobilizes resources in a situation of uncertainty; he would be the one who succeeds in his bets on the future. [Page 196]

Faced with these problems, it may seem essential to use the criterion of innovation. The entrepreneur would be the one who organizes a new combination of means of production: the one who develops a new product, develops a new method of production, creates a new market, conquers a new source of supply or disturbs the organization of a whole sector. […] However, defining the entrepreneur as an innovator requires de facto to separate innovation from the process, to extract it from the continuum, to attribute it, often very artificially, to a single actor. [page 197]

When research in entrepreneurship developed in the 1980s, it quickly focused on the questions of who was the particular personality of the entrepreneur. […] Among the traits that have been the subject of several studies, we note the propensity to risk, the tolerance for ambiguity, the need for accomplishment and the locus of internal control [the locus of internal control indicates the tendency that individuals have to consider that the events that affect them are the result of their actions] This research did not yield any conclusive results. [Page 198]

Galluzzo could have mentioned the definition of a startup given by Steve Blank which has been almost universally adopted, it gives a fairly convincing perimeter to the tech entrepreneur, the one in question here: “Start-ups are temporary entities looking for a scalable and repeatable business model.”

Finally on several occasions, Galluzzo seems to show his preference for the builder more than for the creator, Markkula rather than Jobs in the early days of Apple, Cook rather than Jobs in its last days: Bloomberg recently ranked all the CEOs in Apple history based on how the company’s valuation has evolved under their leadership; Steve Jobs (1997-2011, +12.4%) is far behind Mike Markkula (1981-1983, +64%) and John Sculley (1993-1993, +106%). Tim Cook outperforms them all with a +561% increase. I did not have access to the article and I could have been wrong but I arrive at different results for the growth rates from my multiples: Markkula, 4x in 2 years or 100%, Sculley around 1x or 0 %, Jobs (second period) 100x in 14 years or 40% and Cook, 10x in 12 years or 25%. Finally Jobs (1st period – in reality Scott) 1600x in 4 years or 500%. But this last subject is all the less important as I am not sure of all these figures. Founder, builder, storytelling and reality, these are subjects that remain fascinating. Thanks to Anthony Gazzullo for his excellent book and the thoughts it prompted me.

[1] Here are elements that describe an ecosystem and that I took from a post dated October 2015:

“5 needed ingredients of tech. clusters”
1. Universities and research centers of a very high caliber;
2. An industry of venture capital (i.e. financial institutions and private investors);
3. Experienced professionals in high tech;
4. Service providers such as lawyers, head hunters, public relations and marketing specialists, auditors, etc.
5. Last but not least, an intangible yet critical component: a pioneering spirit which encourages an entrepreneurial culture.
in “Understanding Silicon Valley, the Anatomy of an Entrepreneurial Region”, by M. Kenney, more precisely in chapter: “A Flexible Recycling” by S. Evans and H. Bahrami

Paul Graham in How to be Silicon Valley? “Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.” He also added about failed ecosystems: “I read occasionally about attempts to set up “technology parks” in other places, as if the active ingredient of Silicon Valley were the office space. An article about Sophia Antipolis bragged that companies there included Cisco, Compaq, IBM, NCR, and Nortel. Don’t the French realize these aren’t startups?”

Finally, entrepreneurial ecosystems need 3 ingredients – I quote:
– capital: by definition, no new business can be launched without money and relevant infrastructures (which consist of capital tied up in tangible assets);
– know-how: you need engineers, developers, designers, salespeople: all those whose skills are necessary for launching and growing innovative businesses;
– rebellion: an entrepreneur always challenges the status quo. If they wanted to play by the book, they would innovate within big, established companies, where they would be better paid and would have access to more resources.

The myth of the entrepreneur – Undoing the imaginary of Silicon Valley

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A friend mentioned this new book about Silicon Valley to me a few days ago and I quote: “The author’s argument is wrong (but it’s pernicious). […] Indeed, entrepreneurship generates excellence and independent-minded people, while [another view – opposition to liberal capitalism] creates a population of people dependent upon the state.”

I’m not sure I agree with my friend: on the one hand, the relationship between collective and individual is a key topic around entrepreneurship. Does a company create value without “outstanding” individuals? The subject is as old as the world. On the other hand, the distribution of this value is a second subject which belongs among other things to the field of taxation and Piketty has clearly shown that, for several decades, the distribution gap has greatly increased in favor of the richest to the detriment of the poorest.

Marianna Mazzucato has shown this imbalance in The Entrepreneurial State, which she finds all the more unfair as she shows the primordial role of the State in upstream funding (education, research, public services in general) which provides a favorable context for the creation of wealth.

In the beginning of his book, Le mythe de l’entrepreneur – Défaire l’imaginaire de la Silicon Valley (The Myth of the Entrepreneur – Unraveling the Imaginary of Silicon Valley), Anthony Galluzzo explains similar things but it seems different to me. I am only at the beginning and I will see later how closely it joins the criticism introduced above. The author is a specialist in merchant imaginary and the subtitle is convincing, namely that it is necessary to deconstruct the imaginary of this region, based on story-telling around the stars of the region, such as Steve Jobs and Elon Musk (although Elon Musk has largely lost his aura). It shows us that Elisabeth Holmes tried the same approach but succeeded only very partially.

Joseph Schumpeter is quoted extensively in the book at the beginning, in particular it seems to me, for a critique of the role of the entrepreneur and of creative destruction. Galluzzo prefers to use destructive creation to show the chronology of actions. But I didn’t see in the beginning of the book, at least, that Schumpeter adds that capitalism cannot exist without advertising. So without story-telling and imaginary.

This imaginary of Silicon Valley is therefore, I believe, only what allows capitalism to self-develop, to survive, with all the current paradoxes of destructive waste. But behind this imaginary, what is the reality? Galluzzo refuses to oppose entrepreneurs and businessmen. I understand the argument. Creators, stars at least, can make a lot of money. But I don’t know if the main reason is their ability to do business or if they are simply at the origin of a creation that makes it possible to do business. I am neither an economist, nor a historian, nor a sociologist and I find it very difficult to make sense of things, all other things being equal.

Anatomy of the Myth – the Heroic Entrepreneur

So here are a few things that I found interesting in the beginning of the book:

1- The solitary entrepreneur

Steve Jobs was not alone and worse is perhaps not critical to the initial success. The story is indeed quite well known while Jobs is seen as the only genius of Apple.
– Steve Wozniak is the real genius (Galluzzo will not like the term) behind the first computers from Apple.
– Steve Jobs is said to have “stolen” [Page 35] many ideas from Xerox to build his machines. The story is known but the term “stealing” is too strong even if many Xerox employees were shocked. Xerox received Apple shares in exchange for this rather unique deal in history.
– “Mike Markkula can be considered the true founder of Apple, the one who transformed a small, insignificant hobbyist operation into a structured and solidly financed start-up. » [Pages 19-20]
– “Arthur Rock, meanwhile, is one of the most important figures in Silicon Valley, he contributed to the emergence of the largest companies in the region – Fairchild Semiconductor, Intel, then Apple. However, no biography has ever been devoted to him and his wikipedia page is starving”. [Page 20]

I will nuance Galluzzo’s remarks again. Certainly Wozniak, Markkula and Rock have not penetrated the imagination of the general public, but Silicon Valley connoisseurs are not unaware of them and the film Something Ventured (which Galluzzo does not seem to mention in his very rich bibliography) does not forget them at all. And what about this cover of Time Magazine.

2- The war for talent

“The functioning of the labor market in Silicon Valley, however, shows us a completely different dynamic. The industrial concentration in this region leads to significant personnel movements: an engineer can easily change company, without moving or changing his lifestyle. […] This high degree of labor mobility has been observed since the 1970s, when on average IT professionals only stayed in their jobs for two years [Cf AnnaLee Saxenian’s Regional Advantage]. When circulating like this, employees, even bound by non-disclosure agreements, take with them their experiences and knowledge. The propagation of this tacit knowledge is at the heart of the ecosystem, it allows permanent collective tacit learning. » [Page 45]

Galluzzo gets to the heart of the matter here, which makes Silicon Valley unique. Not so much the concentration of talent, which exists in all developed regions. But the circulation of talent. Almost everything is said!

However, Galluzzo adds a significant nuance that I was less familiar with: “Therefore, problems arise for entrepreneurs relating to what has been called in business jargon the “war for talents”. To carry out his projects, he must succeed in appropriating the most precious commodity there is, the work force of highly qualified engineers.” [Page 46]

Galluzzo then mentions the stock options, the aggressive recruitment but also this: “Another court case illustrates well the issues of employee retention. In the 2000s, several Silicon Valley giants, including Intel, Google and Apple, formed a “wage cartel”, mutually agreeing not to attempt to poach employees. This tacit agreement was intended to eliminate all competition for skilled workers and to limit wage increases.” [Page 47 & see Google, Apple, other tech firms to pay $415M in wage case]

3- The invisibilization of the State

The subject is also known and I mentioned it above. We too often forget the role of the collective in the possibility of favorable conditions and context. But Galluzzo shows that too often there is even a certain hatred of the collective, illustrated by the growing visibility of libertarians. It is also known, Silicon Valley is afraid of unions. Here’s another example I didn’t know:

“I want the people who teach my children to be good enough to be employed in the company I work for, and earn $100,000 a year. Why should they work in a school for $35-40,000 a year if they can get a job here at $100,000? We should hire them and pay them $100,000, but of course the problem is the unions. Unions are the worst thing that has happened to education. Because it is not a meritocracy, but a bureaucracy. »

You have to read the entire excerpt and maybe even the entire interview with Steve Jobs. Excerpts from an Oral History Interview with Steve Jobs. Interviewer: Daniel Morrow, April 20, 1995. Computerworld Smithsonian Awards. We are there in the core American culture and the importance given to competition between individuals rather than to the equality of the members of the collective.

So are there geniuses or not? Is there only Darwinian emergence of talents a posteriori among those who will have survived? I don’t know or I don’t know anymore. Probably something in between. Or maybe it is an act of faith, as long as sociology does not have elements that will allow me to have a more convincing opinion…

To be continued…

Time and Space Maps of Silicon Valley (in the 80s)

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I had published in the past genealogies (time maps) of Silicon Valley startups and venture capital. Here they are again:

SiliconValleyGenealogy-All
Genealogy of Silicon Valley startups (1957-1986)

WCVCGenealogy-All
Genealogy of West Coast Venture Capital (1958-1983)

But there have been other (“artistic”) maps, strangely in the 80s also. Here are three similar versions from 1983-1986.


Maps of Silicon Valley by Pacific Ventures (1983-86)

Of course these ones have a background history with Steinberg’s New Yorker cover in March 76. And for my Swiss friends what about this Zuricher one?

What is interesting to me is its nostalgic value. So what names are worth noticing? On the left one or below, of course, Apple, Intel HP, IBM but also Tandem, National Semi, Varian, Fairchild, Ask, and a little surprisingly Stanford University, all in between highways 101 and 280, finally Genentech, Atari, Rolm between San Jose and San Francisco and behind the Bay Area, Berkeley, New York, technology clusters Route 128 in Boston, Research Triangle in North Carolina & Austin’s Silicon Gulch. Finally emerging and threatening Japan in the mid 80s…

What to add to the one in 1984? Not much except that both HP and Intel, but not IBM anymore, are in the foreground… Do you remember the Apple vs. IBM 1984 advertising?

So what about 1986? Well I see 3com, Borland, Sun, Silicon Graphics. Silicon Graphics went public in October 1986, Sun on March 4, 1986 (by the way Oracle had gone public on March 12, 1986 and Microsoft on March 13, 1986…). 3Com’s IPO was in 1984. Borland was always strangely structured with an IPO in London in 1986 before doing it in the USA in 1989. 1986 is a bit of a turning point: software became an industry in itself, Sun, Silicon Graphics, 3Com represent also the beginning of networked computers.

Forget nostalgia. Silicon Valley has changed a lot. Apple is still around, Oracle too but have a look at this new illustration! Apple is in a new building. Facebook (sorry Meta) and Google (sorry Alphabet) are the new giants. HP is also mentioned through its garage! There are the old ones (Intel, AMD, IBM, HP), the already old like Yahoo, not to forget Cisco, Adobe, YouTube, LinkedIn, Intuit and more “iconic” landmarks like Sand Hill Road, or Cafe Borrone and Buck’s restaurant.

But always remember. Silicon Valley is not about buildings as Folon rightly showed. And you know what, it is dated 1985…

Larry Page and Peter Thiel – 2 (different?) Icons of Silicon Valley

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I just read two long and interesting articles about these important personalities of Silicon Valley. The one about Larry Page was mentioned to me by a colleague (thanks François!) through its French translation. It is rather old (2014) but still very interesting and relevant : The Untold Story of Larry Page’s Incredible Comeback (Nicholas Carlson – April 24, 2014).

The one about Peter Thiel was recently published by the New Yorker, I find it a little less interesting as there is not much new, but still very clear as usual with this great magazine : What Is It About Peter Thiel? The billionaire venture capitalist has fans and followers. What are they looking for? (Anna Wiener – October 27, 2021)

What do they have in common, I am not sure: they have very different personalities, one is rather secretive, the other very visible. They certainly have in common the belief that technology and entrepreneurship can (still?) change the world, but Thiel puts this as a political statement and I believe he is wrong. Politics are about collective decisions (I hope), wheras entrepreneurship is more individual decisions (I think) even if is does include cultural (therefore collective) features.

Page was born in 1973 in Michigan and Thiel in 1967 in Germany, they both studied at Stanford University, Thiel in the law school, Page in the engineering school. They apparently both funded the Singularity university, something I do not really understand except the link to their extreme belief in technology saving the world…

I have written so much about them, you may want to check that through the tags #thiel or #google. In the article about Larry Page, there are very interesting moments, for example his “lessons” about management:
– Don’t delegate: Do everything you can yourself to make things go faster.
– Don’t get in the way if you’re not adding value. Let the people actually doing the work talk to each other while you go do something else.
– Don’t be a bureaucrat.
– Ideas are more important than age. Just because someone is junior doesn’t mean they don’t deserve respect and cooperation.
– The worst thing you can do is stop someone from doing something by saying, “No. Period.” If you say no, you have to help them find a better way to get it done.

It’s really worth reading these two articles and see again how much diversity there is (or not) in Silicon Valley. The last sentences of the articles about Page says: Instead of ending his life destitute and ignored, [contrary to his icon, Nikola Tesla] Page, still just 41, will spend the final half of his life pouring billions of dollars and countless hours into his wildest visions. “Anything you can imagine probably is doable,” Page told Google investors in 2012. “You just have to imagine it and work on it.”

Whereas the one about Thiel ends in a little more mysterious but enlightening way: Of course, when it comes to Thiel, what registers as mystique may simply be practiced opacity. Strauss, the conservative philosopher, proposed that academics and writers often advance their ideas through intentionally obscure prose — a technique in which “the truth about all crucial things is presented exclusively between the lines,” such that it is legible “not to all readers, but to trustworthy and intelligent readers only.” In interviews, Thiel can come across as “Straussian” — opaque, enigmatic, even oracular. He is a master of conversational redirection, and his arguments can be indeterminate. Religious references and allusions lend his ideas about business or globalization a sense of mysticism, as though the truth of his own speech is lurking just around the corner. Online, clues proliferate — about Thiel’s ideas and much else. Sleuths hunt for meaning, and search for signs indicating that they are among the “trustworthy and intelligent.” For Thiel’s fans, part of his appeal must be the endless opportunities he presents for decoding, deciphering, and hypothesizing. He offers readers the anticipation of revelation. Then again, the truth could be much simpler: when money talks, people listen.

Silicon Valley will soon be 65. Should it be Retired ? – The Darwinian Dynamics of the Region

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Silicon Valley will soon be 65. 65? Yes, I usually say that the region began its growth with the foundation of Fairchild Semiconductor in 1957 (even if the name itself was created in 1971).

endeavor-insight-sv-2-retina

The region is increasingly criticized for both good and bad reasons (see for example here and there) and perhaps it is a little out of breath. Too old ? Ten years ago I had looked at its “Darwinian dynamics” in Darwinian and Lamarckian innovation – by Pascal Picq. I had noted there the remarkable dynamics of creation (and destruction) of businesses. “Twenty of the top 40 SV companies in 1982 did not exist anymore in 2002 and twenty one of the 2002 top 40 companies had not been created in 1982.” So I just did the exercise again.

The table below gives the data for 1982 and 2002 again, then those for 2020. I should have waited for 2022 and the 65th birthday of Silicon Valley, but I didn’t have the patience! Ten of the 40 largest companies did not exist in 2000 and seven more did not exist in 1995. Sixteen of the top 40 of 2002 no longer exist in 2021. The region is therefore a little less dynamic but it remains quite remarkable… The retirement seems to me far away in reality !

As a final comment, five years ago, I had mentioned the evolution of the American capitalism in The top US and European (former) start-ups and in particular The Largest Companies by Market Cap Over 15 Years. You could compare it with the dynamics of French CAC40.

Forty Largest Technology Companies in Silicon Valley
(the same data are provided in jpg format at the end of the post)

1982 2002 2021 Revenue Market Cap
1. Hewlett-Packard 1. Hewlett-Packard 1. Apple $294,135 $2,153,363
2. National Semiconductor 2. Intel 2. Alphabet e $182,527 $1,169,351
3. Intel 3. Cisco b 3. Facebook d $85,966 $787,268
4. Memorex 4. Sun bc 4. Intel $77,867 $194,491
5. Varian 5. Solectron c 5. HP Inc. $57,667 $31,545
6. Environtech a 6. Oracle 6. Cisco $48,026 $192,007
7. Ampex 7. Agilent b 7. Oracle $39,403 $191,539
8. Raychem a 8. Applied Materials 8. Tesla d $24,578 $77,574
9. Amdahl a 9. Apple 9. HP Enterprises $26,866 $15,677
10. Tymshare a 10. Seagate Technology 10. Netflix e $24,996 $236,117
11. AMD 11. AMD 11. Gilead $24,689 $74,058
12. Rolm a 12. Sanmina-SCI 12. SYNNEX $23,757 $6,588
13. Four-Phase Systems a 13. JDS Uniphase c 13. PayPal e $21,454 $277,047
14. Cooper Lab a 14. 3Com c 14. salesforce.com e $21,252 $208,200
15. Intersil 15. LSI Logic 15. Applied Materials $18,202 $78,716
16. SRI International 16. Maxtor b 16. NVIDIA $16,675 $328,615
17. Spectra-Physics 17. National Semiconductor c 17. Western Digital $16,327 $16,183
18. American Microsystems a 18. KLA Tencor 18. Adobe $12,868 $241,275
19. Watkins-Johnson a 19. Atmel b 19. Uber d $12,078 $93,549
20. Qume a 20. SGI c 20. Lam Research $11,929 $69,264
21. Measurex a 21. Bell Microproducts bc 21. eBay e $10,713 $36,576
22. Tandem a 22. Siebel bc 22. AMD $9,763 $115,364
23. Plantronic a 23. Xilinx bc 23. Square d $9,498 $106,173
24. Monolithic 24. Maxim Integrated b 24. Intuit $7,717 $99,872
25. URS 25. Palm bc 25. Opendoor d $7,324 $1,221
26. Tab Products 26. Lam Research 26. Sanmina $6,875 $2,117
27. Siliconix 27. Quantum c 27. KLA Tencor $6,073 $40,492
28. Dysan a 28. Altera bc 28. Equinix e $5,999 $63,238
29. Racal-Vadic a 29. Electronic Arts b 29. Electronic Arts $5,670 $41,368
30. Triad Systems a 30. Cypress Semiconductor bc 30. NetApp $5,590 $14,480
31. Xidex a 31. Cadence Design b 31. Agilent $5,530 $36,607
32. Avantek a 32. Adobe Systems b 32. Intuitive Surgical e $4,551 $92,762
33. Siltec a 33. Intuit b 33. ServiceNow d $4,519 $110,315
34. Quadrex a 34. Veritas Software bc 34. Juniper e $4,445 $7,478
35. Coherent 35. Novellus Systems b 35. Workday d $4,318 $57,934
36. Verbatim 36. Yahoo bc 36. Synopsys $3,821 $39,023
37. Anderson-Jacobson a 37. Network Appliance b 37. Autodesk $3,790 $67,066
38. Stanford Applied Eng. 38. Integrated Device 38. Palo Alto Net. d $3,783 $33,851
39. Acurex a 39. Linear Technology 39. Twitter d $3,716 $44,436
40. Finnigan 40. Symantec b 40. Airbnb d $3,378 $94,765


NOTES: This table was compiled using 1982 and 2002 Dun & Bradstreet (D&B) Business Rankings data and Blommberg data for 2020. Companies are ranked by sales.
a – No longer existed by 2002.
b – Did not exist before 1982.
c – No longer existed by 2021.
d – Did not exist before 2000.
e – Did not exist before 1995.

Same table in jpg format

Charles Geschke, co-founder of Adobe, dies at 81

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Charles Geschke may not be as famous as many Silicon Valley entrepreneurs, but he is really a legend of technology and software. With John Warnock, he cofounded Adobe in 1982 and he is an exception in the group of founders as he was in his early 40s when he left Xerox to create the company which developed Postcript, PDF, Adobe, Photoshop and so many more products. He died on April 16, 2021.

I had read about Geschke (and Warlock) in a good number of books and blogged about him here:
– In the company of Giants in November 2008
– A success story: Adobe Systems – John Warnock and Charles Geschke in March 2009

I found yesterday this very interesting short video that you should watch (or read the transcipt below).

Here is the transcript: “when John and I started Adobe we had a sort of simple thought in mind in terms of how we wanted to organize the business

we wanted to build a company that we would like to work at and we sort of used that principle in terms of how we defined the management structure, the operational organizational thoughts that we had about how to put the company together and part of that recognition was that we had constituencies that every business has that need to be balanced

we had our shareholders we had our employees we had our customers and of course the communities in which we operated and if you think about running a business all four of those constituencies are mildly in conflict what’s good for one may not be good for the other and to be successful as a business and to retain the kind of quality employees that you want to have it’s extremely important that you continually monitor how those four constituencies are being served and keep them in balance

a couple other principles people would often ask as they worked at Adobe

well what will it take for me to enhance my career and both John and I would tell them well the first thing you have to figure out is how to fire yourself by hiring someone to work for you who can do your job better than you do and there’s no alternative but to get promoted once you do that

and the second piece of philosophy which is frankly the most critical one building particularly a high technology business is to tell every engineer and every manager that your job is to hire people who are smarter than you are as it’s a much larger population from which to choose and those turned out to in fact have been extremely important in building a business

and again I want to comment that without my relationship with John and our partnership it’s hard to imagine that we could have achieved what we did over the past twenty seven years and we’re extremely pleased with this award and the opportunity to have served our industry

thank you very much

the really cool thing about this award is it’s from engineers we’ve gotten entrepreneur awards before but they’re from business guys and getting award for entrepreneurship from engineers is very very cool

Chuck and I when we started the company weren’t on a get-rich-quick scheme we were frustrated at Xerox and our major frustration is we knew we could invent great technology but no one would ever use it and it would never see the marketplace and I think our major motivation in starting Adobe and continuing with Adobe was to make stuff that people would use a lot of people would use and I think inside of every engineer is that basic need to have your stuff used so that was the primary motivation behind what we did

the other thing in the hardest thing about building a business and keeping a business sustained and going on is continuing to innovate and we’ve never figured out how you institutionalize innovation innovation is a very sort of remarkable thing that sometimes happens sometimes doesn’t but the best you can do is build an environment where people are happy they’re doing an adventure they’re trying to create and hopefully in that process great things will happen”

The largest technology companies in Europe and the USA in 2020

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I regularly look at the largest technology companies in the USA and Europe and obviously this year, I had the impact of Covid in mind. Here are the tables I build once a year (and that you could compare to the ones published in January 2020 here or in 2017 here.

I am adding below their PS (price to sales, ratio of market cap to revenues) and PE (price to earnings, ratio of market cap to profits when positive) as well as the growth of the market cap. and revenues. There are 3 new companies I had not studied last year (Airbnb, Paypal and AMD) for which the growth is therefore not mentioned.

There would be many comments to give btu I will be fast:
– The GAFAs are the clear leaders, 4 of them are trillion dollar companies. Facebook is a little surprinsingly not as impressive and Tesla is appearing on top.
– The COVID did not have a big impact, not to say it had a positive impact on technology companies (in financial more than in economic terms)
– Again, looking at averages we see Europe is lagging in market caps, employement, sales and profits by factors close to 10…