Big companies stem from visionary entrepreneurs, smart executioners, and perhaps a bit of luck. But organizational success is only as functional as the ecosystem that supports it. This would imply that companies currently in a position to tremble economies once started up and thrived to become so. It is as simple as that.
At the surface, the easiest name that comes to mind is the Silicon Valley – a prime ecosystem that breathes entrepreneurship and innovation, now known worldwide as a hotbed for high-value companies. But have you ever considered why this region of California, in particular, continues to remain fertile for businesses to start and grow?
There are a couple of reasons, and they aren’t as intuitive as you might have imagined.
Silicon Valley is easily equated with the 19th century California Gold Rush. The only difference being that the former does not appear to be diminishing any time in the near or far future. But let’s take a look at what catapults the region as a spectacularly stable place to launch any type of business.
Consider the Trifecta
Silicon Valley centres into a focal point between the private sector, the U.S Government, and academia. It’s this convergence that creates an environment unlike any other in the world. Berkley and Stanford University, being at the epicentre of the valley, provides for a constant flow of new entrepreneurs and talented minds on an annual basis.
Launching a business under California law is a fairly effortless endeavour, which is bolstered yet by the fact that non-compete agreements are void in the state.
“What results is a steady stream of well-trained engineers, marketers, business people, researchers; a highly available stock market appetite for stock flotations; people with experience in business; and a vibrant venture capital community, including how and why business failures happen.” — Vint Cerf, Chief Internet Evangelist at google.
An Abundance of Amenities
Business amenities are although a luxury finds itself in the abundance in the valley. This makes the place an attractive destination for investors, conventions, and more. Think world-class hotels at reasonable prices, highly-rated restaurants, sports arenas, conference centres and other unique entertainment options.
Bear in mind that if a target market exists, its most readily found in the Silicon Valley with their culture and representation as early adopters for exciting new trends.
High Density of Investors
It’s simple enough to find wealthy investors by the droves in the area, who organize themselves as venture capitalists and angel investors. Incentive? An earnest desire to make money work, instead of paying large taxes on earnings annually, many investors put their money to work. It’s advantageous in the hope that a handful would grow to return high dividends in the years to come.
Ironically, a thriving start-up ecosystem is also best described by the number of start-up deaths. This urges further investment despite considerable failures, the sheer volume of new businesses meaning there would always be success stories.
