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How Has Silicon Valley Changed Since the 1990s?

In what ways has Silicon Valley changed since the late 90s and how does it remain the same? originally appeared on Quora the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Alex Cowan, Faculty at UVA Darden & Partner at Synapse, on Quora.

I would say that Silicon Valley is a bigger, more amplified version of how I encountered it when I moved here for college in 1995. Here are a few notes on particular areas.

1. Culture I’m not saying everyone here is Mother Teresa, but I do think that there’s a sense here of egalitarianism and the idea that you should universally respect people’s confidences and trust. I think part of this comes from a science and engineering culture that prefers flat organizations and has learned that valuable discoveries often come from unlikely places.

2. Optimism There’s a point of view here that’s highly optimistic. Problems are meant to be solved, the world isn’t perfect, but it’s basically pretty good, and it’s better to try to make things better than to editorialize on how wrong something is. Yes, there’s an element of bravado in the fact that tech billionaire’s build rockets, but, come on, give them a break, how does that compare to the way billionaires in NY or LA spent their money when they were in a boom time? I would say it compares very favorably.

3. Startups There are so many startups now and while part of that is cyclical, I think it is a relatively permanent feature. Corporations are spending less and less on R&D and instead allocating their ‘innovation budgets’ to acquiring startups. This is at a time when those same corporations are contending with disruption from accelerating technical change and low growth in the economy at large. I think the startups will continue and continue to be an important avenue for innovation, education, and career development for individuals.

Here is kind of an interesting story that parallels the question: I came to Stanford as a sophomore after having dropped out of college for a year to start a company, which I exited. My girlfriend at the time told me I should go meet up with a bunch of students who had similar interests and had just started a club called ‘BASES’, ‘Business Association for Stanford Engineering Students’. I joined, it was great. But it was still relatively small and patched together, kind of like the startup scene of the late 90’s. I went back a year ago to do a talk for them and there were just a ton of students, there was a whole management team, they had highly prepared slides to talk through their agenda. Basically it was a highly streamlined, scaled up version of what it was. And I think that’s great, I assume it’s much easier for a student or a person who moves to the Bay Area to find what they want at this point.

4. Housing It was always expensive and it’s gotten so much worse. Some blame high tech. I’m not big into the practice of blaming (see #2). Certainly, the wealth created by high tech has increased the demand for housing – that’s a fact, not an opinion. That said, I think the solutions are more on the supply side and this is where SF+Silicon Valley are a little stuck. Homeowners and voters are by and large very opposed to the development which the area desperately needs to expand the housing supply so costs come down.

This isn’t just a nuisance problem. I think it’s a problem of major social and ethical importance with very long-term implications. Even in the early 2000’s making a decent income as a professional, there was no way I could afford to buy a house/flat. And that was a mess because I was effectively financing my 50/60 something peers’ mortgage because of the mortgage income tax deduction, which they had and I didn’t. I remember when I paid my income tax, my accountant would ask ‘Don’t you have anything to deduct? Anything at all?’. Nope, I didn’t. That’s still the case for many young people but much worse. Over generations, it’s likely that this is a major (if not the biggest contributor) to a rising income gap. MIT undergrad Matthew Rognlie wrote a fantastic piece last year about the link between housing prices and the income gap.

This is a way I hope SV does change. Right now I think a lot of the focus is in the wrong place – on the effect wealth creation in SV is having on housing prices (here’s an interesting piece on that from The Atlantic). Hopefully, we can change the narrative and focus on accelerating worthwhile development to bring down prices.

5. Old Silicon Valley vs. New Silicon Valley

Another interesting change is how the hot spaces have moved from hardware to software to what we have now, kind of ‘digital products’ at large, and how that has paralleled company HQ’s and hot housing markets. SV started in hardware, of course, and a lot of that activity was in the southern part, San Jose and Santa Clara where you have companies like Intel, AMD, Cisco, Western Digital, and Seagate. HP was kind of an exception being in Palo Alto. Then in the late 90’s early 00’s you had more software stuff and the early dot.com’s and those tended to be a little further north in the area around Stanford (Palo Alto, Menlo Park, Mountain View). When dropped out of Stanford in ‘99, I lived and worked in SF’s SOMA district, but that was relatively unusual.

Now SF is the hot place to be for young people and companies. That’s where you’ll find companies like AirBNB, Twitter, Square, and Slack. Who knows what’s next? I hear the East Bay is getting hot.

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