Saturday, August 02, 2008

Benevolent Dictators and Cross Pollination in Boulder


Rebecca McKinnon did a great post on Silicon Valley's benevolent dictatorship. Personally, I think she nailed it. To a large degree, she exposed how a large number of high tech people tend to think about this space. Benevolent Dictatorships are, indeed, largely what creates great companies in Silicon Valley. I won't go into her take on the downside of that, read her post. It's worth it.

The guys over at Techdirt, not to be outdone, write a post about Rebecca's post that adds an important additional side note in the last couple of paragraphs about the cross pollination of people and ideas is one main reason Silicon Valley tends to be so successful. These two things, based on my 20 plus years of observing it and 10 years actually living there, make up a large part of why Silicon Valley succeeds beyond the obvious things talked about and copied by other areas many times before (money from VC's and Angels, access to universities, quality of life, etc.).

So....Benevolent Dictators and Cross Pollination of technology, people and ideas. Really really important.

Can you apply that formula to a place like Boulder, Colorado? A town that fancies itself many things, one of which is a '2nd tier' startup capital, alongside towns like Austin, Portland and Seattle?

I think you can, but I don't think, in Boulder at least, it looks the same.

Our benevolent dictators seem to also be our Money People. The VC's and Angel investors that make startups here possible. They don't act like Steve Jobs, they're far more subtle, but the effect is very similar. What they say goes, and what they want happens. This is certainly not a bad thing, but it's a real thing. We have no Apple like companies in Boulder, it's just not big enough, so a different configuration of a similar model seems to have formed up.

On the second point of cross pollination, I'm not sure we do as good a job. This is due mostly to scale.. we just don't have it here, and it's also who our benevolent dictators are.

Even 'Northern Colorado'....bringing Denver/Ft. Collins/Loveland/Longmont/Greely into it we don't have near the same number of high tech folks or money people as The Valley (I'm not counting Colorado Springs in here because Colorado Springs is to the rest of Colorado what Texas is to the US).

But, it's also partly due to our money people, or rather, our lack of them. Generally, VC's and even Angels are not overly keen on their companies hiring employee's away from each other. This is very understandable because, in a small company, a key person leaving can be devastating to that small companies progress. Because we have far fewer money people in Colorado than Silicon Valley has, there's alot more talk among the startup people running the companies about how 'VC X' really hates it when you hire someone from his/her company.

If that money person is already involved in your company, you don't want to do something to upset them. And, due to the size of the money pool being limited in this area, if that money person isn't involved with your company, chances are you'll want them to be, or at the very least have something nice to say about you, so, again, you don't want to do anything to upset any of those money people. This gives them a disproportionate level of influence (back to Benevolent Dictatorships) on the startup world in our area.

This isn't a Boulder problem alone, it's any area that doesn't have a big enough VC/Angel population which is pretty much anywhere but Silicon Valley.

Unfortunately, this creates a low level fear of hiring from other startups (i.e. limiting cross pollination) if they're involved with (or want to be) some of the bigger VC or Angel folks in the community.

In a smaller ecosystem like Boulder (or even Northern Colorado), that has a real dampening effect on cross pollination, one of the key features of Silicon Valley's success.

I don't have an answer here short of getting several dozen VC's and several hundred Angels to move to Boulder. And I'm not saying Boulder is a bad place for startups (it's actually very very good) but, the components that make Silicon Valley so successful don't yet exist here in Boulder (or by what I can tell anywhere else) and until that happens, The Valley will rule.

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