Utah, the Next Silicon Valley?
Editor’s Note: In the new podcast Masters of Scale, LinkedIn co-founder and Greylock partner Reid Hoffman explores his philosophy on how to scale a business -- and at Entrepreneur.com, entrepreneurs are responding with their own ideas and experiences on our hub. This week, we’re discussing Hoffman’s theory: Silicon Valley has an inimitable blend of talent. No other region can match its collective capacity or wisdom for scaling, except maybe China. Listen to this week's episode here.
The many years living and working in Silicon Valley have shown me how an established community can be very favorable both personally and also for a business. The value this Valley has had for me cannot even be underestimated. I was able to instantly tap into the ecosystem here and start building different businesses. This great Valley continues to provide me with connections, inspiration and opportunities I crave.
However, so much of the talent I incorporate along with contacts for investments, strategic opportunities and expansion comes from all parts of the world.
My first reaction to a question about the world becoming all virtual, was to picture the world in a total virtual reality (VR) of itself. I even said that the virtual environment would quickly become the next Silicon Valley. I think eventually the internet of things (IoT) and the development of other technology will create a virtual startup ecosystem.
Until that time comes, I'm partial to Utah as the next Silicon Valley. This is not just because I grew up there. It’s the fact that every time I return to Utah, I see the incredible growth in startups, investors and tech talent.
Now, other people are picking up on this knowledge and witnessing what I’ve seen. My thoughts won’t be held so privately anymore. The clues show that factors in Utah are ones that can turn any area into the next Silicon Valley:
A business mindset
An area has to be focused on the idea of innovation and entrepreneurial growth. There can be a group of entrepreneurs who are passionate, but it will take the actions of a local city and government to bring about the possibilities.
Organizations have to understand the intricacies of what businesses require in order for them to come to your state. Large businesses have to be lured into a city or state with the right motivation. They have to be able to see, with fair certainty, that scaling growth is not only possible but likely to occur. Great entrepreneurial opportunity and positive business expansion won’t become a reality without the cooperation, encouragement and especially the planning of local government.
This means creating programs and stimulating the local environment for businesses to start up easily. This means minimal paperwork and bureaucracy, the correct financial incentives and amenable lending programs.
I've seen areas have lightbulb moments in Utah. Places where state and city governments are heavily involved in developing the programs, framework and infrastructure necessary so entrepreneurs can make these incredible businesses there. Utah is a place where a business can get started without being put off by the legal requirements that typically shut down small business startups elsewhere.
If these cities and the state had been that welcoming to business when I got started, I most likely would have stayed in Utah. I went where the ecosystem allowed me to ramp up quickly. Now, I see that the local Utah government has finally learned and understood what really is at stake in its decisions. Startup organizations now see the connection between helping entrepreneurs and businesses, and the enjoyment of an uplift in their economy.
Research has shown that those areas that are focused on one industry or business sector are less open to the idea of what a Silicon Valley ecosystem offers.
In contrast, areas like Utah that are known to be open to multiple industries throughout the region that are ripe for a technological environment. Utah has become known for everything from software and medical devices to aerospace. Since technology is now permeating all types of industries, this makes it an ideal location to test and develop disruptive solutions in multiple areas.
An area of any country that would just have only one industry won’t offer the same opportunities or understanding that businesses require. Every time I return to Utah, there are other niche businesses that are launching, which makes for an exciting and stimulating environment for everyone. The elation and the motivation start to spread, and the people gain a hopeful passion that they can create something of value.
Social consciousness and equality
With so many startups focused on making the world a better place and solving issues that impact humanity, Utah is the perfect place to build that social consciousness. The state was built on a values system that has always emphasized family and an acknowledgment of a greater good that we can all appreciate. It's an ecosystem that is growing based on a kinder, people-focused business environment. Maybe Utah could even raise the bar for Silicon Valley, which has always been known for it’s generous, intuitive altruism.
It has been shown that there needs to be greater equality infused into Silicon Valley. This attribution is already found in Utah. Female entrepreneurs are growing at a faster rate than elsewhere in the country. They are potentially building what could become a unique startup ecosystem within itself.
According to information from a Salt Lake Tribune article, "The state ranks as the best state in the country for business by CNBC, 24/7 Wall Street and Forbes.” Additionally, the 2016 State of Women-Owned Small Businesses Report commissioned by American Express OPEN, ranks Utah in the top 10 states for growth in the number and economic clout of women-owned businesses. The article states, “It's estimated in Utah that 83,800 women-owned businesses employ 75,400 people and generate sales of $14 billion -- a growth of 38.8 percent since 2007."
Even if you don't personally think the state will become the next Silicon Valley, these types of statistics point out that Utah could potentially become its own socially conscious, equal opportunity startup ecosystem.
From high school and university contests to more networking events throughout the state, Utah understands that building a startup ecosystem means encouraging younger generations to think like entrepreneurs.
I wish they had had entrepreneurial classes and events in local high schools when I attended them, but I still found my way into entrepreneurship. I’m hoping the road is made easier for the “new” entrepreneur now.
These classes and contests are helping students see that there is more to work and life beyond the traditional employment route. Showing these students what’s truly possible can get them to think differently than typical graduates. It’s teaching the entrepreneurial way of thinking and acting that will help them innovate at a faster rate.
In the combination of growing up with technology and potentially even having parents that telecommute or work in a flex arrangement, these future generations of burgeoning entrepreneurs can turn the state into a Silicon Valley ecosystem. The ecosystem will be able to sustain itself through an ongoing stream of graduating entrepreneurs.
This means that the state can generate graduates geared toward this specific career path. These natural entrepreneurs can learn how to build out the ecosystem from the high school classrooms -- something that Silicon Valley did not necessarily do in the past. None of us knew how to run a program like that back then.
Silicon Valley is leading out and discovering new processes for high school students at this time and will lead out once again in this area of teaching and learning. But now, the rest of the world is watching Silicon Valley and can cultivate their own entrepreneurial mindset immediately in their own communities.
These are just some of the ingredients that were innate in the Silicon Valley ecosystem.
However, I can see that these elements and factors have been incorporated into the Utah systems.
These additives can now turn Utah into an entrepreneurial hotbed. Even better is that those within the state are putting their own spin on what this ecosystem looks like. This is driving appealing improvements on the original idea from which other areas will be able to capitalize and learn.
I'm excited to have one foot in that ecosystem and one in Silicon Valley because I can enjoy the benefits of both.