Bill Miller on Silicon Valley

I had the good fortune of seeing Prof. Bill Miller speak recently as part of a lecture series hosted by the Sloan Fellows. He is something of a legend of Silicon Valley, having been involved in the start-up the Mayfield fund, the CEO of SRI, on the boards of several start-ups, the Provost of Stanford, and a Professor in both the Engineering and Graduate Business Schools. Already into his eighties, he recently founded yet another company called NanoStellar, but also spends a good deal of time studying what makes Silicon Valley work.

The talk I attended was mostly on this final topic and specifically what it is about Silicon Valley which allows it to continue to re-invent itself to change with the times. Miller has documented a list of a dozen factors in his book “The Silicon Valley Edge” which he claims are the ingredients that make Silicon Valley successful. I thought his perspective was interesting partly because it related to some previous Radar and Paul Graham posts I’d read, but also because it came from a man who had seen the Valley move from vacuum tubes to silicon, then from silicon to software, and finally from software to the internet. Much of what he said overlapped with these earlier articles, but there are a few points in particular which I think are worth calling out here:

1. Universities and research institutes which interact with industry

A key point from Miller’s perspective is that having great universities around isn’t enough, they need to be a functioning part of the community. Clearly this means having alumni who go out to form companies, but it needs to also include a way for the university insiders to participate in innovation. Taking the case of Stanford, Miller points out that there are revenue sharing incentives in place which encourage schools and departments to allow their professors to take part in professional activities.

2. Meritocratic and risk-taking culture

Miller points out that as compared to much of the world, Silicon Valley relatively devoid of old boys clubs which act as gatekeepers. If your idea is good enough, you can generally get financing, deals, employees, etc., here. Additionally, Silicon Valley is relatively tolerant of failure, with some entrepreneurs succeeding only after many failed attempts. This is something that is in stark contrast with much of the world.

3. Global linkages

For any number of reasons, be it world-class universities or the high quality of life, people from all over the world move to Silicon Valley. This creates a flux of people with a variety knowledge bases and personal connections. Miller claims that it is in this mixing of knowledge that new ideas are formed and that in the unique network of relationships that they are able to be realized.