Being "Silicon Valley"

A lot has been made lately about "becoming the next silicon valley", Brendon Wilson is going to be talking about the subject on a regular basis on the TechVibes blog and has posted on it a couple of times already, Jevon posted on StartupNorth about us missing the point in trying to become it, Erick posted recently in TechCrunch on Europe trying to find it's silicon valley, Paul Graham wrote about How to Be Silicon Valley, and a myriad of others have blogged about the same subject.  So in the spirit of conversation, I figured I would throw in my two cents by looking at a Guy Kawasaki post from a couple of years ago on: How to Kick Silicon Valley's Butt.  His post revolves around stuff you can't do anything about, stuff you can do something about, and stuff that you shouldn't do anything about.  I'll look at all three and how/what is going in Edmonton in that regard.

Stuff You Can't do Jack About:
California's beautiful surroundings: Okay so this is a tough one.  We clearly can't do anything about not living on the ocean (however if Al Gore's global warming predictions hold ...) so it is tough to compete to compete in that regard.  However that doesn't mean that Edmonton is a bad place to live.  It seems as though it is our civic duty to complain about how terrible it is to live here in the winter.  True there is a bad stretch of two or three weeks where it is ridiculously cold, but other than that the weather really isn't that bad.  Boston is a tech-hub and they have cold, winter, and snow as well - deal with it.  Besides it also give us the option of skiing/snowboarding, tobogganing, ice-fishing, or a whole bunch of other things that you can do in the winter.  True we don't have the California coast and can't really compete with it, but we should focus on the great things that we do have instead of worrying about the bit of cold that we do.  (Oh yeah we also don't have earth quakes).

High Housing Prices: Guy postulates that high house prices mean that people settle down, buy houses, and start families - and that people with families are less likely to start startups.  Edmonton has this part down pretty well, our housing prices are quite high now (not as high as people would like to make the out to be), but they are way higher than they used to be.  I don't entirely agree with this as I think that if housing prices are too high than people worry more about survival than they do about starting something that they are passionate about.  If you don't have a roof over your head it is tough to choose a startup over a solid job that covers the bills.

Cities, Crowds, and High - Over Population: Overcrowding means that people are more likely to spend time in close proximity (thus more likely to get into discussions, arguments, etc. that lead to startups).  Edmonton is fighting a tough battle on this one, we are massively spread out, everyone has their mcmansion and quarter acre, and drives to work, so we are in tough here.

Absence of Multi-National Companies, Especially in Finance: While we don't have a ton of multi-nationals here in the headquarter sense, we do have the oil-patch, and all of the oil companies.  It is extremely hard to convince someone to take a long-shot on an idea, with the possibility to making a lot of money, when Syncrude just offered them a 6 digit salary.  While I would guess that a lot of people working for these companies would rather be in something exciting, when someone comes to your door after you graduated with a wheelbarrow full of money designing an oil pressure valve for the next 25 years does not seem so bad.

Life-Threatening Enemies: We're pretty safe here, life threatening enemies are not even on our radar.

Stuff You Can do Jack About:
Focus on Educating Engineers: "Engineers beget ideas. Ideas beget companies."  Okay so we are doing pretty well here in a sense, we have one of the largest engineering schools in the nations (actually it might even be the largest).  Having graduated recently from the U of A, and witnessed engineering buildings popping up on a regular basis, this is definitely a focus of the University and it's funders.  Not to mention all of the research centers that are located there (i.e. NINT).  So far so good in this department.
HOWEVER, we do have some problems in turning this into companies for a few reasons.
    1. The wheelbarrow full of money to engineering and CS grads (as mentioned above).  Talk to almost all of the engineering students about where they expect to be working after graduation (never mind the summer internships), it almost always in a discussion about the oil-patch.
    2. We have become incredibly adept at licensing our ideas.  It seems that most ideas that come from our engineers get patented, perhaps turned into a small spin-off, then licensed off as soon as the cheque rolls around.  This is fine for the researcher who made a discovery, he gets some money and gets to keep researching, however it does very little for the region.  The great ideas that get created tend to create more wealth, companies, and growth for other regions, rather than our own.  I have heard David Cox (CEO of TEC Edmonton) talk about this a couple of times and it is definitely something that they are looking to remedy, but it is not an easy process.
    3. We do a lot of brilliant research at the U of A, great, however a lot is really far removed from from the market.  While we are pumping out great ideas, these ideas are not going to become companies anytime soon, if ever.  This research needs to be done and is extremely important, and I wouldn't want it to stop, however it seems as though applicability is frowned upon while abstract, basic science is what we want to see our researchers work on.  This compared to universities like Stanford (surprise) that encourage later stage, applicable, research.  In the end we become the R&D department for the rest of the word, creating the basic science that gets turned into products companies, and prosperity for other regions.

Encourage Immigration: I have to admit a fair amount of ignorance in this area, I don't know exactly how easy or hard it is to immigrate to Edmonton.  My only observation on this is that while attending university it seemed as though there were a lot of international students, especially at the graduate level.

Send the Best and Brightest to Silicon Valley:  I'm not sure how to quantify or decide whether or not Edmonton is doing well in this regard.  I do like the idea of it however, true we loose a few people, but the people who come back to the region are awesome.  The enthusiasm, advice, connections, and mentality that gets brought back after someone spends some time in the valley is awesome and helps to spread (indoctrinate) those qualities in those that they come in contact with after they return.

Celebrate Your Heroes: I think that Edmonton needs a shot in the arm in this regard, there are a lot of incredible things going on in Edmonton that nobody knows about.  How many people know that one of the biggest youth social networks was founded, and is based in, Edmonton (Nexopia).  How many people know that one of the foremost game development companies is located in Edmonton (BioWare).  People just don't know enough about what is going on in the tech-scene, world class companies that are based and founded here.

Forgive Your Failures: This would be one of the big things that people talk about coming out of the valley, failure is not only tolerated, it is accepted and somewhat celebrated (some would say that you are not really ready to run a company until you have failed one).  We are definitely far more risk averse in what we will try to start up and what we will invest in here.  We need to get to the point where someone failing a business is seen as a lesson, not a stigma that follows them.

Be Logical: "Regions should use their natural advantages."  Our major advantage is oil.  Not a lot to be said here, we are doing a pretty good job of reinvesting the money that we have gained from the oilsands in things like education, whether this will transition us into a knowledge economy remains to be seen.

Don't Pat Yourself on the Back Too Soon: A branch office does not a tech-hub make.  I think that Edmonton is a long way from from patting ourselves on the back as being a tech-hub, however the thing that does concern me is the things that we celebrate at time.  For instance a call-center being opened in Edmonton.  Yes having Dell open a call center is (was) nice as it creates jobs, however it does little to improve the technological, entrepreneurial, start-up economy so in all-in-all it really means very little to becoming any sort of technology center.  We like to give a lot of press about things like call centers being opened (and closed), rather than focusing on the companies that we are growing and taking to the world.  I like Guy's comment that "a region is a tech center when it opens branch offices elsewhere."  That's where we need to get to.

Be Patient:  I think that we have been a little too patient, it's time form more action and less hyperbole.

Things You Shouldn't Do Jack About:
Don't Focus on Creating Jobs: See my rant above, often we worry too much about the jobs that are created by attracting branches, rather than organically growing world class companies here.

Don't Pass a Special Tax Exemption: I don't entirely agree with this point, I personally think that we need to do something to encourage venture investing and a tax credit might work.  That being said I think that the lack of venture investing in Edmonton has more to do with a lack of deal-flow rather than not enough willingness to invest.  Money tends to flow to opportunity, perhaps we have either have not produced enough opportunity, or have not publicized it as well as it needs.

Don't Create a Venture Capital Fund:  While I think that funds such as IVAC are great, and serve a purpose, a government created venture fund is not the answer.  There have been talks about the government starting one with some of the surplus and I hope that it doesn't happen.  There are too many extraneous variable that come into play with anything having to do with the government, especially when it comes to the distribution of funds.  Venture investing should be handled by private industry, with their neck on the line and without having to worry about whether their funder's constituents like or dislike what they are investing in.

Don't Provide Cheap Space and Infrastructure: Again I don't entirely agree with this, I would love to see spaces, such as Enterprise Square, where startups are able to work, bump into each other, find support, etc.  This is especially true in Edmonton where office space is in high demand and rent seems to double yearly.  Startups don't need to get hamstrung by rent in their first year.

Well that would be my two cents (and definitely my longest post to date).  I would love to hear what people have to say about the subject, and I'm going to try to post a bit more on it in the future.