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20 December 2007

Silicon valley networks

Another article in today’s New York Times evoked social network ideas, on the role of networks in Silicon Valley. (It is a sign of the times that I have blogged about three New York Times articles this week that were somehow about networks). This is a topic, of course that has received ample scholarly attention.

Some excerpts:

Yet a look at the microclusters within Silicon Valley demonstrates the business relationships, the social connections and the seamless communication that animate the region’s economy. It also suggests the human nuance behind the Valley’s success and shows why that success is not easy to copy, export or outsource.

Then there are the clusters that are based more on personal connections or affiliations than on geography. Stanford, just outside Palo Alto, is perhaps the strongest cluster-generator in the Valley.

Stanford students and staff have been behind countless companies in the Valley, from established ones like Hewlett-Packard, Cisco and Sun Microsystems to more recent success stories like Google and VMware.

New companies with deep ethnic links — mainly Indian and Chinese — are sprouting up in the Valley. Often, ethnic background is but one layer of social relationship. SnapTell, a start-up that seeks to marry image-recognition technology, cellphones and marketing, was founded last year by G. D. Ramkumar and Gautam Bhargava, Indian computer scientists and Valley veterans. The company has 10 employees, six of whom have Ph.D.’s and three of whom are from Stanford.
The shared backgrounds, interests and schools make for frictionless communication that fosters rapid innovation.

Even weekend sports, it seems, become the basis for informal business clusters in the Valley. Start-up ideas or job opportunities often surface on the sidelines of a weekend soccer game or, increasingly, cricket match. Giriraj Vengurlekar, an engineer who lives in Sunnyvale, plays in one of the Valley’s cricket leagues, which now has 40 teams. His team, the Centurions, includes employees of Sun Microsystems, eBay, Cisco, Yahoo and other technology companies.

Last year, Mr. Vengurlekar joined Serus, a start-up that makes software for managing offshore manufacturing operations. The cricket pitch, he finds, is a good place to scout recruits or learn of job openings. “People don’t play cricket to get jobs, but it definitely happens,” he said. “Cricket definitely spills over into business.”

I would note that you never play cricket alone.

It is not surprising that identity and background play a key role in silicon valley networks. The statement The shared backgrounds, interests and schools make for frictionless communication that fosters rapid innovation., in particular caught my eye. The potential downside, one would think, is that these homogeneous clusters do not foster the innovation that is the result of different, complementary, backgrounds; of the recombination of existing ways of thinking (cf Reagans and Zuckerman 2001 on the role of diversity on teams).

Ray Reagans, Ezra W. Zuckerman, Networks, Diversity, and Productivity: The Social Capital of Corporate R&D Teams, ORGANIZATION SCIENCE, Vol. 12, No. 4, July-August 2001, pp. 502-517

Posted by David Lazer at December 20, 2007 3:41 PM

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