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sikiliza (< 20)

Does Proximity to Silicon Valley Guarantee Success?

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February 15, 2012 – Comments (3) | RELATED TICKERS: EKDKQ , AOL , NOK

It seems like there might be something in the water around the San Francisco Bay Area. A very casual look at a few technology failures in the last few years seems to point to an inverse correlation, spurious though it may seem, between proximity to Silicon Valley and the probability of failure or near-failure. 

Here's a quick list: 

Nokia - located in  Keilaniemi, Espool in Finland

AOL - Was located on a farm in Loudoun County, Virginia before recently relocating to NYC

RIMM - Headquartered in Waterloo, Canada

Eastman Kodak - Going bankrupt at its HQ in Rochester, NY on the shores of Lake Ontario 

Polarioid - Minnentoka, Minnesota 

Blockbuster - McKinney, Texas

Could there be something here?

 

 

3 Comments – Post Your Own

#1) On February 15, 2012 at 5:50 PM, ajm101 (33.74) wrote:

Dell (Austin), Red Hat (Raleigh), EMC (Boston), et. al. do okay.  IBM (NY) muddles along, as does MSFT (Redmond).

Silicon Valley is having a good run right now, but they have plenty of stinkers.  It's an area specialized towards technology startups - they do well when there is good liqudity in venture funds and when there's a lot of technological change.  Between social and cloud, both of those are true right now.

When the funding tide goes out, there's always a few Pets.com companies without bathing suits on.

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#2) On February 15, 2012 at 8:40 PM, sikiliza (< 20) wrote:

@  ajm101 - True, their are companies outside of Silicon Valley that do well, but the question is, does not being located in Silicon Valley accelerate the changes that you will fail as a formerly successful company?    

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#3) On February 21, 2012 at 11:16 AM, 3Fairfield (80.64) wrote:

Interesting thought, and, Yes, I think there is something to being located around Silicon Valley--something about its matrix of elements conducive to business development (although Silicon Valley isn't the only location that has created such a 'matrix' )

I detect an energy there that is almost palpable--Silicon Valley boasts a history of successful enterprise development, the intrinsic California culture of acceptance of both 'risk' and 'failure', it's located on the edge of the Pacific--looking west to Asia and points yet developed and rich in ideas, it boasts a diverse population of outstanding engineering talent, many venture capitalists who reside there who are looking in their own backyards for premier opportunities, and talented managers who know how to excel.

  Not to mention,  the fine weather and community culture acts as a rather basic but effective attractor for the best talent from across the country and worldwide. And, finally SV has excellent airports and flight accessibility.

The Valley has a culture of 'start-ups' as well as successful mature businesses that thrive together. And the humans who are elemental in these enterprises all converge along the Camino Real and Sand Hill Drive, passing each other on the way to get coffee or drop their kids off at school to create a synergistic effect!  Well, maybe the 'X factors' I've outlined don't converge quite so easily, but at least I think that having this pool of talent and the atmosphere of success around does create an environment for success and growth that is not so apparent in other towns.

And from reading the newspapers, I've detected a pattern of  leaders of outlier enterprises in remote areas of the U.S. do recognize some of these advantages and have moved selected aspects of their businesses to SV to take advantage.

 Just my two cents. I guess I sound like a member of the Silicon Valley Development Council, but I'm not. I've just wondered about the success of SV myself and how a town or region could possibly replicate its success; especially since I was there in the 70's and 80's and have since moved back home.  And now as I've watched significant  components of companies leave their home regions to relocate in more energetic and fulfilling business environments I've pondered the question of 'why'.

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