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Why is Silicon Valley the Best Place for Startups

7 August, 2015 | Article Source: Rob LaPointe  |   (No Comments) | 67,802 Views

Why is Silicon Valley the Best Place for Startups

Why is Silicon Valley the Best Place for Startups

Silicon Valley has been at the forefront of technological innovation since before the internet. It’s so entrenched in the psyche of tech workers that it is nearly impossible to mention the internet without mentioning Silicon Valley.


From eBay to Apple, to Google, the world’s biggest tech innovators and giants got their start here in the heart of the Bay Area. In fact, more tech startups have failed in Silicon Valley than have started anywhere else in the world. Leading app development companies like SDI and many others are headquartered in Silicon Valley today.


There are many other tech hubs in the world, but none of them come close to Silicon Valley and never will be held in the same esteem. We know this because Silicon Valley is still held up as the comparison point – Melbourne is the next Silicon Valley, or Tel Aviv is, or L.A. is…and so on.


Startups are even more successful in the Bay than anywhere else in California; startups in the Valley are successful 20x more often than the average throughout the state. Even more startling, they’re nearly 90x more successful than the lowest areas.


So why is Silicon Valley so popular? Why was nearly a quarter of all Venture Capitalist funding in the first part of 2015 invested in the Valley? Heck, even startups from elsewhere are coming to California just for investment access! What’s going on here?


As far as we know, there was no ritualistic sacrifice of virgin computers to some unholy digital god. So there has to be real concrete reasons as to why startups are so successful here – reasons that can be turned into actionable advice for entrepreneurs worldwide.




This is a good place to start because no matter where you base your startup, you need to make sure that there is an appropriate support structure in place. One of the advantages of the Valley is that it has been at the forefront of innovation for so long that its support system is unparalleled.


One of the biggest and best features of Silicon Valley is a massive investment opportunity. As mentioned above, 25% of all investment in early 2015 was in the Bay Area – for the numbers curious, that’s $5.4 billion over 327 investments. This level of financial support is invaluable to a successful startup. When you consider the fact that the area has nearly 5x the number of average startups and a GDP $105 billion dollars more than all of North America’s GDP combined, it is no surprise to see so many opportunities.


Silicon Valley Universities also play a big role in fostering a thriving tech sector. San Jose State, San Francisco State, Stanford University, Santa Clara University, and other universities in the area all have robust computer science and business management programs. Local schools providing educated talent for local business creates a symbiotic relationship that is beneficial to all parties involved.


One final component of an excellent startup support system is the confluence of movers and shakers. Silicon Valley has millions of tech entrepreneurs and path blazers – some who never made it off the ground, some who lasted a short time, and some who are now running the show.


This has created a network easily tapped by any startup in the area – you can throw a rock and hit ten people who work for a tech startup. While it increases competition, it also increases collaboration and cooperation.


Over the past few years of this tech boom, it became clear that technology is improved more efficiently through a group effort. The unmatched access to knowledge is a key contributing factor in the success of the Valley.


“Innovation is About People”


Wall Street Journal published a post some years back about diversity being a key ingredient to the recipe of startup success. Diversity has played a significant role in why Silicon Valley tech companies flourish.


Many decades ago, Ford released a vehicle called the Edsel. Among social scientists, the Edsel is a famous example of what we call groupthink, This refers to the phenomena where a group of like-minded people fails to see glaring problems in a service, product or way of thinking.


The only cure for groupthink is diversity. In Silicon Valley, the levels of diversity are extraordinary. Nearly 50% of all Silicon Valley startups are owned by immigrants and over 50% of all tech workers come from a diverse ethnic background. Even more important, nearly 34% of all tech CEOs in the Valley are women. At SDI we encourage women startups to build a business. We support women in business with the correct project timelines, estimations and cost for app development, web design or a go-to market strategy.


This diversity has resulted in one of the most vibrant, ingenious, and financially solvent economies in the entire world. To cement this point, all one needs to do is look at the second biggest tech hub in the world – New York, New York. Nearly as diverse as the Bay, with 44% of startups founded by immigrants, the tech sector in NYC is growing at a faster rate than even Silicon Valley.


As mentioned earlier, collaboration is an absolutely essential factor in a successful startup. At SDI, we have collaborated with hundreds of global clients, resulting in thousands of winning products. We know what a startup needs to succeed, from venture funding to a market strategization.


Get started now for a free business consultation. You can also call us on +1.408.802.2885 and speak directly with a business expert today.

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