What does Silicon Valley need more of?

What you as a founder need to know about Silicon Valley

Key messages of the text

  • different cities are combined to form a founder Eldorado
  • An above-average number of German and international companies have an address in Silicon Valley
  • very high cost of living, which means that relatively few people live in the Santa Clara Valley
  • A visit is particularly worthwhile for founders
  • Berlin is now seen as a European alternative

What is Silicon Valley?

The so-called Silicon Valley in the Santa Clara Valley is an approximately 70 km long stretch of land south of San Francisco on the Bay in the west of the US state California.

The founder's Eldorado extends over various cities that are connected to one another in a similar way to the German Ruhr area and thus form an extremely dense infrastructure. These include (from north to south):

  • South San Francisco
  • San Mateo
  • Redwood City
  • Palo Alto
  • Mountain View
  • Sunnyvale
  • Cupertino
  • Santa Clara
  • San Jose

Companiesthat are founded in Silicon Valley or have their headquarters here, are mostly concentrated on the areas of information and semiconductor technology. This extreme specialization in connection with the great importance of local universities and research institutions ensures that Silicon Valley is a prime example of economic cluster formation[1]Federal Ministry of Education and Research - International Cooperation: Silicon Valley.

Many ideas that were born in Silicon Valley later revolutionized the world - for example the search engine Google or the iPhone. It is therefore fair to say that Silicon Valley is the cradle of the digital revolution.

The story of Silicon Valley

Strictly speaking, the history of Silicon Valley began before World War II, when the U.S. Navy opened a base for airships in Mountain View and thus attracted various suppliers.

After World War II, it was primarily Stanford University that drove the development of what would later become Silicon Valley. Frederick Terman and William Bradford Shockley were both professors at the university and encouraged their students to start their own businesses nearby. The university owned a lot of vacant land, which it leased to young companies for little money in the early 1950s. This created the Stanford Industrial Park.

Silicon Valley: What is coming from the most powerful valley in the world

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Stanford alumni William Hewlett and David Packard, who founded the high-tech company Hewlett Packard as early as 1939, were among the first tenants of the commercial space. HP is still one of the largest companies in Silicon Valley today.

The rest of the history of this industrial location can be described as a sure-fire success: Existing IT companies that initially only dealt with hardware, later increasingly with software, attracted new companies[2]Wikipedia from May 15, 2020: History of Silicon Valley.

History is still being written in Silicon Valley almost every day. After all, revolutionary world innovations such as mobile computing and the smartphone were developed here. And a look into the future suggests that we will hear a lot more from this region in California in the coming years. The location of the IT and high-tech industry.

History is still being written in Silicon Valley almost every day. After all, revolutionary world innovations such as mobile computing and the smartphone were developed here. And a look into the future suggests that we will hear a lot more from this region in California in the coming years.

How did the name "Silicon Valley" come about?

Many who hear the term Silicon Valley for the first time immediately think of silicone (implants) and suspect that the name has something to do with the sometimes dubious ideal of beauty many Americans have. Anyone who sees a connection here, however, has fallen for a "wrong friend".

In fact, the English "silicon" means translated into German Silicon and refers to semiconductor and computer technologywhich was significantly shaped and advanced in the area south of San Francisco. Valley, in turn, provides information about the geographic location of the region in the Santa Clara Valley.

The name "Silicon Valley" was coined for the first time in 1971, when the technology journalist Don C. Hoefler published an article series about the local semiconductor industry in the newspaper "Electronic News". However, the term has been used occasionally before - especially by people from the eastern states who observed developments in Silicon Valley from a distance[3]Gregory Gromov in netvalley.com: Don Hoefler coined the phrase Silicon Valley (eng).


Hard facts about Silicon Valley

Silicon Valley is a fascinating start-up location whose appeal has long radiated beyond the borders of the USA. This is due (in large part) to the impressive facts that can be gathered about the metropolitan region in the western United States.

The following is a profile that will help you to better classify Silicon Valley in the future.

List of all universities

In addition to the following universities, UC Berkeley and SFSU are often counted among the universities in the Valley.

  • San Jose State University
  • Stanford University
  • Santa Clara University
  • John F. Kennedy University (Campbell Campus)
  • Hult International Business School
  • Carnegie Mellon University (Silicon Valley Campus)
  • Golden Gate University (Silicon Valley Campus)
  • Silicon Valley University
  • University of Phoenix (San Jose Campus)
  • University of San Francisco (South Bay Campus)
  • Lincoln Law School of San Jose
  • University of Silicon Valley Law School
  • San Jose City College
  • Menlo College
  • Evergreen Valley College
  • Foothill College
  • De Anza College
  • Chabot College
  • Peralta Colleges
  • Mission College
  • West Valley College
  • National Hispanic University
  • Notre Dame de Namur University
  • Ohlone College
  • Cogswell Polytechnical College
  • The Art Institute of California - Sunnyvale
  • German International School of Silicon Valley

In particular, the annual turnover of the companies is rising continuously, because in 2019 the 17 largest companies in the Valley generated total sales of over USD 811 billion.

Company in Silicon Valley

As you can already read in the profile, the number of companies in Silicon Valley cannot be precisely recorded. New ones are added every day - and existing ones throw in the towel every day.

However, if a company from Silicon Valley has managed to gain a foothold in the long term, it often achieves world fame. The list of the largest and most important companies, which were founded in Silicon Valley, is the best evidence of this[10]Wikipedia from May 15, 2020: Company Silicon Valley:

  • Adobe Inc.
  • Airbnb
  • AMD
  • Alphabet (google)
  • Apple computer
  • Cisco Systems
  • eBay
  • Electronic Arts (EA)
  • Facebook Inc.
  • Hewlett-Packard (HP)
  • Intel Corporation
  • LinkedIn
  • Netflix
  • Oracle Corporation
  • PARC, a Xerox Company
  • Sun Microsystems
  • Tesla Motors
  • Twitter
  • Yahoo

Numerous international and German companies now have a branch in Silicon Valley and benefit from the IT cluster with its extremely well-developed infrastructure.

These include, for example[11]Federal Ministry of Education and Research - International Cooperation: Silicon Valley:

  • Deutsche Telekom
  • Daimler AG
  • Ericsson
  • IBM
  • Nokia
  • Philips
  • SAP
  • Siemens
  • Sony
  • Volkswagen

You wonder why so many successful company stories were written in Silicon Valley of all places?

The region's unprecedented success is largely based on these four cornerstones:

  1. Concentration on high tech and information technology (cluster formation)
  2. the (much more relaxed) handling of possible business failure
  3. Quickly available venture capital for founders and entrepreneurs
  4. renowned universities and research institutions

Development and research in Silicon Valley

When it comes to development and research in Silicon Valley, there is no getting around the traditional Stanford University. Her alumni include, for example, the founders of Google, PayPal, Intel, Cisco, Mozilla Firefox, Youtube and Netflix). [12]Wikipedia from May 15, 2020: List of companies founded by Stanford University graduates

Who are the Silicon Valley alumni?

A selection of famous founders.

Google

  • Founders: Lawrence Edward Page & Sergey Brin

Paypal

  • Originated from X.com (Founder: Elon Musk) & Confinity (Founder: Max Levchin, Peter Thiel, Luke Nosek)
  • Elon Musk: started a PhD in energy physics / materials science at Stanford in 1995

Intel

  • Founders: 2 of the "Treason Eight": Gordon Moore, Robert Noyce
  • Moore: PhD in Chemistry 1954 from Caltech
  • Noyce: Doctor of Physics 1953 from MIT

Cisco

  • Founders Leonard Bosack and Sandy Lerner
  • Leonard Bosack: graduated from Stanford in 1981 (Masters in Computer Science)
  • Sandy Lerner: graduated from Stanford with a Masters in Computer Science in 1981

Mozilla Firefox

  • Initiated by Dave Hyatt and Blake Ross
  • Blake Ross was accepted into Stanford in 2003

Youtube

  • Was founded by 3 ex-PayPal employees: Chad Hurley, Steve Chen, Jawed Karim
  • Jawed Karim: Masters in Computer Science from Stanford (probably graduated in 2007 as he received his Bachelor in 2004)

Netflix

  • Founders: Reed Hastings and Marc Randolph
  • Reed Hastings: Graduated from Stanford with a Masters in Computer Science in 1988

Even less well-known (but by no means less innovative) companies and ideas were founded at Stanford University. The educational institution is extremely proud of its research and development opportunities and it is not without reason that it is one of the leading elite universities in the country. To ensure that it stays that way, the university welcomes generous donations every year from former students who have long made it to the top of the career ladder.

But Stanford is not the only one that makes a significant contribution to the fact that Silicon Valley is a bubbling source of innovation. Other universities and research institutions, such as the Hult International Business School, the University of San Francisco, NASA Ames and the Mental Research Institute, impressively demonstrate that many of the smartest minds in the world are researching the (digital) future of our society here . [13]Wikipedia from May 15, 2020: Research Institutions Silicon Valley

Working and living in Silicon Valley

Working for a company in Silicon Valley or - even better - founding your own startup in this region is a big dream for many people. And indeed: Seen from the outside, this place of work is extremely attractive.

But the supposed advantages such as above-average salaries (even for interns), company premises with a “campus atmosphere”, free catering and this very special spirit, which does not seem to exist elsewhere, have their price.

Sacrifice as a yardstick.

Anyone who works in Silicon Valley (whether as an employee or a founder) usually sacrifices themselves for their job. The people here are always available for their employers or employees and, apart from their colleagues, often have little other social contact.

Another topic that has a significant impact on working and living in Silicon Valley is the horrendous rental prices. Those who not only want to do their job here, but also want to live, have to dig deep into their pockets - a fact that puts the above-average annual income in Silicon Valley into perspective.

  • In 2018, the median annual income for a household was $ 125,987[14]Silicon Valley Indicators: "Average" Household Income [eng]
  • More than 25% of households in Silicon Valley earn more than $ 200,000 a year
  • 9% of households are millionaire households with assets of 1 million or more [15]Bizjournals.com from February 15, 2019: The typical Facebook employee earns double the household income in Silicon Valley [eng]
  • the average price of a house in Silicon Valley in 2018 was $ 1.175 million[16]Move2siliconvalley: What does a house in Silicon Valley cost? [closely]

the fact is: Very few people can actually afford to live permanently in the Santa Clara Valley. Quite the opposite: You keep hearing about workers from Silicon Valley who are forced to live (temporarily) in cars or tents. The social polarization that goes with it is always a cause for criticism.

Those who (have to) live outside the valley and commute to work every day are confronted with a completely different problem: Kilometers of traffic jams - especially on the main artery, Highway 101 - which, in addition to money for fuel, also generate a lot Devour time. We don't even want to start at this point about the environmental pollution caused by the countless commuters. [17]Marc Pitzke from March 5, 2007 on Spiegel.de: Silicon Valley - Thank you, traffic jam, for being here!

Average rental costs for apartments and single-family houses

The unconditional sacrifice for the job up to complete exhaustion, hardly affordable rental prices, an extremely high volume of traffic combined with tons of Co2 emissions - aspects of this kind are difficult to reconcile with the sparkling image of Silicon Valley. But they too are part of this special economic region. An economic region that works on these negative points. Since 2016, there has been a change in the use of energy. By July 2019, electricity had reduced the region's average CO2 emissions by 64%. Since then, around 90% have received "Energy customers"In Silicon Valley their electricity from so-called"Community Choice Energy Programs“.[18]Jointventure.org of 9 July 2019: Comparison of energy emissions [eng]

Energy requirements of Silicon Valley
  • In 2011, the industrial sector in Silicon Valley caused a total of 31 million tons of CO2; in total (industry, private households, transport, electricity), 86.6 million tons of CO2 were blown into the air in Silicon Valley in 2007.[19]Bay Area Quality Management District: Bay Area Emissions from 2001 [PDF, 1,1MB]
  • Digital technologies are now (2020) responsible for 4% of global annual CO2 emissions; in 2013 the proportion was 2.5 percent.[20]The Shift Project 2019: Towards Digital Sobriety. Page 17 [PDF, 6.1 MB]
  • In 2017, the Silicon Valley Clean Energy Project was launched, which aims to supply the public sector and private households with clean energy and thus cut CO2 emissions in half by 2030.[21]The Mercury News of January 18, 2019: Silicon Valley Clean Energy takes another step to reduce local CO2 emissions. [closely]

By the way: The (German) cliché of the young startup company was largely shaped by Silicon Valley. Yahoo employees, for example, can look forward to free canteen food, a small grocery store, dentist, laundry service, gym and other amenities on the company premises.

The canteen of the “Googleplex” in Moutain View is also known for having many interesting dishes ready for its employees every day. Refrigerators are also available to the multinational employees and Google employees can also get their hair cut free of charge. Health care is unusual for US companies because the Googleplex has in-house doctors.

Employee satisfaction is - primarily - the top priority in Silicon Valley. The economic side effect is that employees (have to) spend as little time as possible on such processes. Due to the long driving times in the Valley, these things take a lot of time, which may affect working hours. [22]How the Googleplex Works


Is it worth visiting Silicon Valley?

Although Silicon Valley is repeatedly criticized (because of the points mentioned above), its charisma is still unbroken. For many (prospective) founders, one thing is certain:

I have to visit this epicenter of innovation and inspiration at least once in my life.

Basically not a bad idea, after all, the valley is only a few kilometers away from San Francisco and can therefore be perfectly integrated into a trip to the west coast of the USA.

But remember right from the start: This trip is by no means cheap, because even the hotels and other accommodations outside of Silicon Valley are calling for impressive prices.

The following map gives you an impression of possible accommodations during your stay:

We would like to tell you below why a trip to Silicon Valley is still worthwhile:

The US entrepreneurial mentality - from dishwasher to millionaire?

Even if this classic symbol is now almost like a stylized urban myth, the extremely positive founder mentality of the Americans is still deeply anchored in the culture of the country.

A quote from Thomas Edison, among other things, is extremely indicative of this: "I have not failed. I've just found 10,000 ways that won't work. " Even if the famous inventor has been dead for almost 90 years, his view of the “beautiful failure” lives on in the minds of many of his compatriots. [23]Alina Fichter on October 3, 2017 on Sueddeutsche.de: Silicon Valley - beautiful failure

If you want to experience this mentality up close, you should definitely travel to Silicon Valley. Because here - it seems at least - every second person is infected by the “founder virus”.

Landmarks in Silicon Valley

Experience Silicon Valley in the classic way as a tourist? Why not! If you want to explore the region in as many ways as possible, we recommend visiting a number of the most famous attractions in Silicon Valley. If that's not enough, you can explore beautiful landscapes and grandiose stretches of beach within a few hours' drive. Highly recommended:


You can find the more typical selection below:

Founder's garages

They are inconspicuous and "typically American" - but not a few young founders go into raptures when they see them. We're talking about the garages in which global corporations such as HP, Apple and Google were founded.

Today these are not only considered an expression and symbol of Silicon Valley culture, they are real cult sites that are visited and hyped by fans of the companies in question.

If you too want to trace the beginnings of the big players from Silicon Valley, then you can pay a visit to these garages, among others:

  • Apple: in Los Altos
  • Google: in Menlo Park
  • Hewlett-Packard: in Palo Alto [24]Mary Meisenzahl on December 22, 2019 on businessinsider.de: Amazon, Google, Apple and Co. were founded in these inconspicuous garages

History of Computing Museum

A classic attraction for true technology enthusiasts is the History of Computing Museum in Mountain View. Here you can marvel at one of the world's largest computer collections and learn almost everything about the history of information technology.

Nerd Alert guaranteed.

Stanford University

Get a taste of the elite university atmosphere? At Stanford University this is possible without any problems. Because here are regular 70-minute "Campus Walking Tours " offered - and even for free!

Even if the tours tend to focus on university life and the history of the university, they are by no means uninteresting for (prospective) founders. As you can already read above, Stanford University is, after all, of central importance to Silicon Valley.

Google campus

From the university campus to the company campus! There are no official tours offered on the huge Google site, but from the outside, too, there are many exciting insights in store for you.

For example, you can watch autonomous cars here, snap a selfie with the giant Android figure or take a jaunt on one of the G-bikes.

The Google Campus address is 600 Amphitheater Parkway in Mountain View City. [25]Wikipedia from May 15, 2020: Googleplex You can walk fairly freely across the Googleplex, but this can change quickly.

The Silicon Valley for German founders

Do you want your trip to Silicon Valley to be less reminiscent of a vacation than an official business trip? Does not pose a problem.
There are many offers for German founders in the IT stronghold, for example:

  • German Silicon Valley Accelerator
  • German Silicon Valley Innovators
  • AHK San Francisco
  • “Innovations labs” of large German companies such as SAP, RWE, VW and Deutsche Bank
  • (German-speaking) events for German founders for networking, pitching, etc.

A visit to Silicon Valley is definitely worth it. Here you can not only experience the American entrepreneurial mentality up close and visit exciting sights, but also gain insights into the sparkling world of the IT giants and make extremely valuable contacts with other founders, established companies and financiers.


Silicon Valley vs. Berlin

The comparison between Silicon Valley and Berlin is difficult - because even if the German capital has developed into a Mecca for founders and start-ups within Europe in recent years, it does not, of course, come close to the dimensions of the “silicon valley”.
This is underlined, among other things, by these impressive numbers from the FAZ:

Number of active startups in 2017: [26]Andre Piron and Anna Steiner on November 15, 2017 on faz.net: The gold diggers of Silicon Valley

  • Silicon Valley: 16,000
  • Berlin: 2,400

Investment of venture capital 2016:

  • Silicon Valley: $ 25.6 billion
  • Berlin: 1.2 billion US dollars

Startup Unicorns 2016:

  • Silicon Valley: 65
  • Berlin: 4

You can find out why so many Germans (want to) find their entrepreneurial happiness in Silicon Valley in this YouTube video:

If you plan to set up your startup in Berlin (or another German city), then of course there are a number of advantages:

  • significantly lower rents, cost of living, etc.
  • high level of networking with other European markets thanks to the EU
  • Influx of qualified specialists (especially after Brexit) [27]Caspar Tobias Schlenk on June 24, 2016 on gruenderszene.de: Will Berlin become a fintech metropolis after Brexit?

The fact that Berlin should by no means be underestimated is also underlined by the fact that large Silicon Valley companies such as Facebook and AirBnB have now also set up branches in the German capital and control the European market from here. [28]99design team in 2017: Why Berlin is Europe's new Silicon Valley


Summary

Silicon Valley exerts a very special fascination on founders around the world - and not without reason, because this stretch of land in the western United States is indeed a very special one.

What began as the cradle of IT has now developed into the undisputed stronghold of the industry.

Silicon Valley is not only a symbol of the American Dream, it also proves that everyone can actually make it from dishwasher to millionaire here. Provided that he has an innovative idea and the self-confidence to bring it into the world.