Why is Silicon Valley so successful? How long will its reign last? Answers usually include deep-rooted engineering culture, cross-pollination through talent mobility, and funding availability. Other oft quoted – albeit lesser – reasons include the business-friendly regulatory environment, the fair weather and the power of the Silicon Valley brand to attract innovators. Here’s an alternative explanation: the Bay Area acts as one big company rather than an array of competing ones.
All the corporations that make Bay Area, Inc. happen to be headquartered in the San Francisco Bay Area, with branch offices elsewhere. The main business of Bay Area, Inc. used to be semiconductors, but like any good business it adapted to the changing tides and is now focused mainly on software. Although the company is not centrally managed, the executives of its various subsidiaries (Facebook, Google, Apple, HP, etc.) share ideas on strategy and growth while sitting on each others’ boards and meetings at social functions.
Take Google: a large company that makes phones, self-driving cars, fiber-optic networks, websites, programming languages, and – that too – a search engine. Other Bay Area companies are equally enterprising. But if you zoom out and view the entire area as one company, you see a conglomerate more diverse than Google and several other companies combined. This giant is extremely prolific, and yet the majority of its business revolves around software. This enables the sharing of means of production (read: engineers), which is an enormous benefit.
Bay Area, Inc. has a uniform mission statement. If you saw it hanging on the wall in some corporate office, it would probably say:
Bay Area, Inc.: Mission Statement
* We live and die on technology and strive to be at the forefront of progress.
* We believe that the best way to predict the future is to invent it.
* Our most important asset is our people.
* We are not afraid to change and quickly adapt to new business models and technologies.
Sounds convincing? If you zoom back in, you will see that this idealistic view doesn’t hold water. Some CEOs will gladly wring their competitors’ necks if they only could. Employee poaching abounds, and trade secrets are stolen left and right. Back stabbing is as prevalent as back rubbing – but always with a smile. Still, that co-opetition has a positive effect on collective success, producing a healthy pressure that pushes us all forward. The magic is in this equilibrium, not one extreme or the other. Hopefully this balance is not interrupted by some major outside force in the coming years.