The Silicon Valley Caravan: What Sets the Tech Upstarts Apart?

For tech giants and startups alike, Silicon Valley success is grounded in core business values and processes rather than technological know-how — with a unique twist.

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Digital Leadership

As organizations rely increasingly on digital technologies, how should they cultivate opportunities and address taking risks in a fast-moving digital market environment?
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Recently, I had the good fortune to participate in a tour of San Francisco Bay Area technology companies, led by my colleague and coauthor on this piece, John Gallaugher, who over the past decade has run 25 such events. Our group visited a total of 24 companies, ranging from large, established technology giants to late- and mid-stage startups to various venture capital and finance companies.

Many executives experience similar types of company-sponsored learning experiences, and I had taken part in the same program four years ago. This return visit, however, showed me a perspective I didn’t see during that earlier visit. It was clear just how much things keep changing in Silicon Valley, particularly when compared to the rate of change at most established companies. If you visited most traditional businesses four years ago, they would likely be fairly recognizable when you returned today. In contrast, the Silicon Valley environment is noticeably different. This relative pace of change between West Coast tech companies and more traditional ones suggests a potentially ever-widening gap between digitally driven companies and the rest.

What’s different?

One notable shift was in the maturation and expansion of the current digital giants. In 2013, Facebook’s dominance was open to question — profits were down, its stock had spent a year below IPO price, and mobile revenue was nearly nonexistent. Today, Facebook’s revenues are up over 500%, with the bulk of them coming from mobile. The “move fast and break things” company has matured to “move fast with stable infrastructure.” And Google isn’t even “Google” anymore — it’s Alphabet, a company with a fast-growing cloud business, moonshot innovation from self-driving cars to life science, and a company-defining focus shift that pins its future to leadership in AI and machine learning.

Smaller companies were also notably different. Many have adapted their business model significantly as the technological environment evolves. For example, mobile payments company Square Inc. has moved beyond credit card processing to provide an entire suite of small business tools . Likewise, WePay Inc. has shifted from a group payments model to a B2B, marketplace-focused model that helps platforms such as GoFundMe and Care.com process payments.

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Topics

Digital Leadership

As organizations rely increasingly on digital technologies, how should they cultivate opportunities and address taking risks in a fast-moving digital market environment?
See All Articles in This Section

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Comments (2)
Todd Roth
Tech companies also focus extensively on the "ability to execute"-  for time to market and platform momentum has huge scale advantages- I think of AWS, Salesforce, and Docker as examples.
Lele Sang
Great insights! Thanks for sharing.