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Category: Silicon Valley

There are 3 posts published under Silicon Valley.
23 Jan, 2014

Chinese Tech and Startup Scene

“Zhongguancun” may not sound as familiar to you as “Palo Alto” or “The Valley,” but, one day, it might.

 

Zhongguancun, located in one of Beijing’s northwest districts, is deemed by many to be the “Silicon Valley of the East.” While such “Silicon Valley of the <Insert Place Name>” claims seem to multiply faster than bloggers write articles, there is some merit to the hopes that Zhongguancun will emerge as a leading center for technology, software, and innovation.

 

Among the masses of office buildings and coffee shops, a thriving entrepreneurial community exists where young and ambitious techies meet, drink and do business with wealthy investors. These investors are increasingly becoming a source of capital that, at one time, was closed to all but the biggest companies. These startups are partially powered by a university system that pumps out between seven and eight million graduates per year. Many of China’s top universities are located very close to Zhongguancun, providing a constant supply of top talent into this business-incubator.

 

Among the thousands of would-be mega-companies in the TMT fields (Technology, Media and Telecommunications) are actual mega-companies. Firms like Google, IBM, Sun, Oracle and Sony Ericsson, among many others, have a presence in Zhongguancun. These firms are, no doubt, doing their own R&D, but are also interacting and cross-pollinating with entrepreneurs. In a world where buyouts of smaller firms and startups are common, any meeting or interaction could mean big bucks and tech glory for this new generation of entrepreneurs.

 

China has its fair share of large companies that dominate their respective markets and the R&D scene therein. Tencent and Alibaba, two of the most prominent internet-centered companies have been on spending sprees for the better part of the year. Where one firm invests, be it in eCommerce payment gateways or taxi-hailing apps, the other follows suit as if to counteract any growth in the market share or industries served by its rival. For tech startups around China, these two internet giants represent receptive audiences as well as the type of aggressive growth strategies that can help an app achieve national prominence and become the standard by which similar apps are measured and judged. Although WeChat was developed in-house by Tencent, its success indicates what is possible when a good app meets a huge company with substantial marketing budgets. Internet search engine giant, Baidu, recently acquired a company called 91 Wireless for a cool $1.9 billion. 91 Wireless was China’s third largest app store from which consumers can purchase apps for the roughly 420 million smartphones in China. As Google Play is largely inaccessible in China, local providers like 91 Wireless have filled the void, offering a place for Android-users to download games, apps, and other digital goodies.

 

Baidu’s acquisition of 91Wireless was widely acknowledged as a strategic move by Baidu to capture more of China’s booming mobile dominated- economy. While Baidu dominates the desktop search engine market, “it is not as well established in the mobile internet space,” noted Andy Yeung at Oppenheimer & Company. In addition to posing challenges for Baidu, the mobile realm is seeing the entry and rise of several local firms that are beginning to challenge companies like Apple and Samsung for market share. Xiaomi, which recently hired Hugo Barra to serve as vice president of its global division, is an up-and-coming player in the mobile realm and a producer of premium smartphones at bargain prices that has a knack for publicity-spawning sales and promotions. Huawei, based in Shenzhen, sells huge quantities of telecommunications equipment all over the world (the U.S. market being a major exception). Currently, it is the third largest smartphone manufacturer in the world, a peak it has reached on the back of strong sales on the Chinese market.

 

From where will the next Chinese technology giant emerge? Likely from one of the numerous coffee shops, like Garage Café or 3W Café,, that populate the streets, corners, and alleys of Zhongguancun. Fast internet connections and a plethora of power strips make Garage Café a location of choice for teams of entrepreneurs who work there around the clock to bring their ideas and apps to life. The café even draws its name from the birthplace of some of the world’s most well-known startups. Apple, Harley Davidson, Hewlett Packard and Amazon, and many others that make a long list of guts-to-glory firms—all started in garages. The Café’s founder, Su Di, wanted his coffee shop to be “a utopia for business startups.” It seems likely he has met and exceeded his goal, a startup-related victory in itself. 3W Café even allows patrons to register their startups using the café’s address and rents workspaces on a monthly basis. It has become a haven for internet related events, meetings, and brainstorming sessions.

 

The unique environment of universities, technology giants, entrepreneurs, and investors helped make Zhongguancun the dynamic and exciting place it is and has led many observers of the global tech and startup scene to begin whispering the “Silicon Valley” moniker in an effort to describe it. As for us in China, we’re content to wait and see what great app or product emerges from Zhongguancun next.

Mathew McDougall
371
9 Dec, 2013

The Growing Silicon Prairie.

I’m a Jersey boy who spent both college and the bulk of my career in New York City, yet I’m writing this post from my office in downtown Lincoln, Nebraska. How I got here is simple – the Midwest’s Silicon Prairie is a great place to build a business.

 

Every region has a lot to offer, so little to no competition., When founding Travefy with a friend who grew up out here, it was a no brainer that we had our best shot of survival as a part of Silicon Prairie’s exciting and growing ecosystem. This region – whose definition is fluid — includes Nebraska, Iowa, & Kansas.

 

There are a lot of great emerging regions out there like Silicon Prairie that exhibit all of the trends that could mean an explosion in entrepreneurial activity.

 

1. A growing bench of talent

 

There’s a reason Silicon Valley’s venture funds all reside on Sand Hill Road, walking distance to Stanford University – innovation and education go hand in hand. A key factor in any ecosystem is access to talent, which the region’s many universities provide.

 

We literally sit a few hundred yards from the University of Nebraska-Lincoln’s campus providing a deep bench of technical talent.

 

2. Emerging support systems

 

Building a company is a daunting task for anyone, especially a first time entrepreneur. As such, concrete support structures and a culture of innovation are essential for success.

 

Although there’s a catch 22 with building support systems and entrepreneurial demand, Silicon Prairie has benefited with both growing in tandem. This ranges from emerging accelerators like Nebraska’s Nmotion or Kansa City’s Sprint Accelerator (powered by TechStars) to fellowships like Pipeline and a bit a fortune like Google powering Kansas City as the first startup Fiberhood.

 

3. Capital

 

In 2007 Nebraska ranked 52nd in the U.S. in venture capital by state. This sparked an amazing turnaround of regional funding structures to tap potential resources that already existed. Nebraska, for instance, now offers Angel Investment tax credits and grants (free money!) for company development.

 

The outside capital is also there. Although Kansas, Iowa, and Nebraska rank 24, 28, and 29, respectively in per capita income, the resources for investment not only exist, they are abundant. Omaha, for instance, boasts the among the most billionaires and millionaires per capita of U.S. cities, driven by behemoths like Berkshire Hathaway, ConAgra Foods, Union Pacific, and others.

 

This means that increased entrepreneurial ability has been matched by increased Angel activity and emerging venture funds.

 

4. Scalable cost structures

 

A reasonable cost of living allows a region to scale quicker, and with more sustainable growth. In areas of Silicon Prairie like Kansas City, housing is 69% cheaper, on average, than San Francisco.

 

5. An echo chamber

 

No startup ecosystem is complete (or can survive) without a powerful echo chamber to help propel the messages of growing companies. Silicon Prairie has a big head start with The Ewing Marion Kauffman Foundation headquartered in Kansas City.

 

Nonetheless powerful dedicated media like Omaha’s Silicon Prairie News and their “Big” event series are literally amplifying the voice of the region’s entrepreneurs.

 

There is a lot more work to be done and this is just the beginning, but the Midwest’s Silicon Prairie is at an exciting moment.

David Donner Chait
209
12 Nov, 2013

How will the Next Bay Area Quake Impact Silicon Valley?

In California, earthquakes are quite the hot topic these days. Are we getting closer to the next big one? Are we prepared? A quick Google search will pull everything from the newly passed early warning system bill to recent stories linking the Oarfish washing up on our shores to near and impending doom. For those in the seismic hazard research community, the Silicon Valley’s own Hayward Fault is the one to watch.

 

The South Hayward Fault has generated twelve major earthquakes in the last 1900 years, about once every 160 ± 65 years. However, the last five earthquakes have been shown to occur more frequently, at an average interval of about 140 ± 60 years. Since Monday, Oct. 21 marked the 145th anniversary of the 1868 disaster, the fault is considered locked and loaded.

 

In 1868, the estimated M6.8 (moment magnitude) earthquake ruptured a section of the fault from the location of present-day Fremont to just north of Oakland. Until the 1906 Great San Francisco Earthquake and Fire, this event was known as the “Great San Francisco Earthquake” for the damage it caused to the major population center of San Francisco. Under a minute long, the tremor caused 30 casualties from building collapse, unreinforced masonry buildings in San Francisco’s business district were destroyed, and there is well-documented evidence of liquefaction on “bay fill” or “made land.” A careful estimate of damages made a day or two after the disaster places losses at $350,000 or roughly $6 million in 2013 dollars.

 

In 1868, the entire population of the Bay Area was 260,000, with 150,000 concentrated in San Francisco. Nowadays the Hayward Fault transects the highly urbanized corridor along the East Bay, and sits adjacently to Berkeley, Oakland, San Leandro, Hayward, and Fremont, and crosses nearly every east-west connection that the Bay Area depends on for water, electric, gas, and transportation. As a result, nearly 2.5 million people live on or near this fault zone, with over 7 million people in the surrounding counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma.

 

Silicon Valley’s technology epicenter would also be affected if the fault were to rupture. Most of the major global technology headquarters, such as Facebook, Google, and Oracle, are within 20 miles of the fault. The likelihood that the next great earthquake in this area would result in significant economic impact is high.

 

So what would be the impact of a M6.8 earthquake on the Hayward Fault in 2013? According to RMS data, more than 7 million people could be affected and close to $1.9 trillion in residential and commercial property is at risk. Our analysis shows that the overall economic losses could range from $95 to $190 billion and insured losses could range between $11 and $26 billion. In the worst case scenario analyzed, Santa Clara County could lose up to $40 billion, and there could be significant liquefaction damage to buildings and infrastructure that are built on bay fill, including the Port of Oakland and the Oakland and San Francisco international airports.

 

Yet, our outlook is not all doom and gloom. Much work has taken place over the past 20 years to mitigate the impacts of a major Bay Area earthquake. Utilities and other infrastructure operators in the region have invested (or are investing) a total of about $20 billion to reduce the impact of future earthquakes. Most of these upgrades and retrofits will be completed by 2013 or 2014. Key initiatives that will reduce the impact of a future Hayward quake include:

 

  • Replacement of the eastern span of the San Francisco–Oakland Bay Bridge
  • On-going work by BART for the earthquake safety strengthening of the Transbay Tube

 

That said, the San Francisco bay area’s particular vulnerability to future earthquakes drives a continuous need for dialogue between the public, government officials, business, and the insurance industry. There is much to be applauded in the work that has already been undertaken; however, the small role of earthquake insurance in the expected recovery from future disaster is a major deficiency in preparing for such an event. While possession of an insurance policy to cover earthquake damages will not be enough to ward off the seismic effects on property prices and the business economy, it could jumpstart recovery efforts. Through awareness that these kinds of events can happen, and what their consequences could be, we can become a more prepared and resilient society.

Patricia Grossi
590