Powered by SaaS Industry
At a Glance
Don Hoefler, a journalist, coined the word “Silicon Valley” in a 1971 article about computer chip companies in the San Francisco Bay Area.
Origins of the Valley
Many popular chip companies, such as Intel and AMD, were based in the area at the time. Many of these firms used silicon to make their chips and were headquartered south of the city in a farming valley. Hoefler merged these two facts to develop a new name for the region that emphasized the chip companies’ prosperity.
While Silicon Valley is now the most well-known technology center globally, it was once a very different city. There were no venture capitalists in the field when the computer chip industry emerged in the mid-1950s.
During the Great Depression, the concept for Silicon Valley was conceived. Frederick Terman, a Stanford engineering professor, wanted to increase the number of career openings for his students. William Hewlett and David Packard, two of his students, were encouraged by him. He also got them grants so they could start a high-tech business that was named after them.
There are many lessons to be learned from the rise of Silicon Valley,
- Successful businesses can form in unusual and difficult settings
The Bay Area was a challenging location for computer chip pioneers in the mid-1950s when the industry was just getting started. It lacked significant sources of financing, significant reserves of talented workers, and big sector-focused recruitment centers. Boston and New York got a six-year head start on the competition. Despite this, Fairchild Semiconductors, one of the largest manufacturers of semiconductors, grew to become one of the most profitable computer chip firms in the Bay Area.
- A small number of entrepreneurs may have a significant effect
Fairchild’s story also highlights how a small group of active entrepreneurs will create a large number of fast-growing businesses. In less than 14 years, the firm’s eight co-founders were directly responsible for the growth of over 30 local computer chip firms. These small businesses became the foundation of a new local economy that employed 12,000 workers.
- There is a mechanism for progress that leaders can accelerate
Entrepreneurs at Fairchild and other local businesses accelerated Silicon Valley’s success by following the four stages outlined in the Entrepreneurship Acceleration Cycle: ambition, growth, dedication, and reinvestment. This allowed new firms to expand quickly, resulting in 92 publicly traded tech companies employing 800,000 people and valued at over $2.1 trillion. Arthur Rock’s (one of the earliest investors in Silicon Valley) experience with the Fairchild co-founders shows that even the most successful entrepreneurs will profit from assistance.
Breaking into Silicon Valley
Domm Holland, CEO, and Founder of Fast, had one Bay Area contact on his phone when he arrived in the United States in the summer of 2019. He developed his network from the ground up, which he attributes to one thing: hard work.
He has few tips to explain how to enter Silicon Valley as an outsider,
- Reach out with relevance
In a place like Silicon Valley, forming networks is essential. People who are relevant in the field of a person’s interest should be studied and approached. Holland says, “Raising money isn’t the only thing. You’ve got to hire people, you’ve got to build a team, you’ve got to build customers and suppliers, and you’ve got to build entire ecosystems. So anybody who would be interested in that area, anyone I could learn from, anyone that would be helpful to me, I spent the time to meet with.”
- Keep it short and strategic
Conduct analysis to determine who you should be speaking with and prepare a brief outreach note. Holland says, since people in the entrepreneurial community are distracted, it’s critical to provide contacts with a condensed piece of knowledge that they can read and comprehend quickly. Keep your mind ready to have a stimulating discussion when you arrive. Do not have a fixed topic, have an open mind.
- It’s all about relationships
Although Holland seems to be on the fast track to startup growth, he stresses that it is not an easy road. No website will bind entrepreneurs with a thousand willing partners, and no vibrant or sparkling pitch deck will close a deal for you. Going out and taking meetings demonstrates to people in the industry that you have what it takes. Showing that you can do that also indicates that you can develop a company, and that is what you would do to build a customer base and a team, he added.
In the end, there’s only one thing to know, San Francisco is a city where over 80% of residents are not natives, so striking up a conversation with someone you don’t know is relatively easy; they’ve been in your shoes at some point. And then you have a beginning of something.