What makes Silicon Valley special? – Information is a Commodity

Last week one of our competitors began the process of shutting it’s doors: StartupLinkup. On the top of their home page you can now read the following:
StartupLinkup.com is winding down. It was a nice experiment, but I realize it’s not the best model for connecting startup founders.
I strongly recommend that you use StartupSQUARE. Tristan, Manuel, and Marcel are the great guys there, and will make sure you get the right connections. All the best, Adrian.
This could only happen in Silicon Valley, our competitor Adrian Fritsch, started referring business to us. What makes Silicon Valley special? Cooperation.

Opportunities Everywhere

Adrian is a great developer. I saw when the first seeds were planted in his head months ago based on the Google Doc spreadsheet for co-founders and I predicted that some speedy coder would have something up in a couple weeks. Yep…that was Adrian. So why would he abandon his idea?

Partly because he’s a great developer. He can build a website in a week or two. He doesn’t lack for new ideas or the skills to implement them and that’s a distinct advantage in this ecosystem. With opportunities everywhere, there’s no need to doggedly chase down one path if it’s not the right one for you. In this case, Adrian recognized the same customer problem we did and also recognized that his solution wasn’t quite working. Why keep pursuing it?

Instead of fighting it out for each customer, he turned to his competitors (startupSQUARE, techcofounder.com, kofounder.com, fairsoftware.net, etc.) and announced that he would redirect traffic to whichever one of us had a good solution that would actually solve the problem. (Fortunately, that turned out to be us thanks to some really great endorsements from our users!)

His rationale was pretty straightforward. A successful solution that helps entrepreneurs find co-founders helps Silicon Valley, it helps the economy, and ultimately Adrian benefits as a member of that ecosystem.

Adrian thought in terms of long term benefits for the group instead of the short term benefits for himself.

(note: Adrian’s next project sounds pretty cool. I’m interested to see how it develops.)

Grow the Pie

Mmmm....pieThat brings me to my next point: we all know each other. There are quite a few companies looking to provide opportunities for co-founders, advisers, and investors to find one another. We talk on the phone, we share information. Why? Wouldn’t it make more sense to horde data? Isn’t business like a poker game? The guy with the most information wins, right?

The pervading philosophy here is that cooperation builds businesses and competition chokes markets. Instead of having ten companies compete for the same slice of the pie, they’re more inclined to sit down together and figure out how to bake a bigger pie.

Chess vs. Poker

If you want to win in Silicon Valley, you have to play chess more than poker. For those that don’t play chess or poker, here’s the difference: Poker is a game of incomplete information. You don’t know what cards the other person has.

The only way to give yourself an advantage at poker (beyond being able to calculate simple probabilities) is to read the other person’s mind. Of course there’s a science to that and some people are great at picking up subtle micro-expressions and body language. However, that skill doesn’t help you in chess.

Chess is a game of complete information. Of course, you still don’t know what the other person is thinking, but all the pieces are out in the open and obvious. If you lose, it’s not because the other person pulled a fast one and somehow hid a piece, it’s because they had a better strategy and tactics. In Silicon Valley, information is a commodity.

Information is a commodity?

Yes. Well…no…information still valuable and in some cases rare, but data is a certainly a commodity and information is on it’s way.

You can have all the facts and figures in the world and without the ability to parse that data into useful information, it’s useless and worthless. Minor case in point, if need you need to know how to create an arrow using CSS instead of a graphic, just search the web. (I liked this post when I needed to know.) There are ten thousand blogs giving away more than just data. They are giving away information under the rightful assumption that their ability to generate that information (a “how to” guide) is more valuable than the raw data (meaningless lists of css syntax).

In this case, Jon Rohan is trying to increase his reputation as someone who can turn data into information by making it freely available to everyone. The only thing that now differentiates a front end developer on this particular task is their ability to successfully execute a Google search. However, Jon’s skill and willingness to share it set him apart.

Companies behave in this fashion as well, not only open sourcing their prized code, but they generate open APIs by the thousands which allow hundreds of thousands of developers to use their abilities to turn data into information and generate value. Companies like Facebook of course keep some data to themselves, but their APIs essentially commoditize vast swathes of data and enable any company out there to become a partner of Facebook simply by writing a couple lines of code.

In this system of complete information, developers in Silicon Valley wind up cooperating more than competing in order to differentiate themselves on the basis of abilities rather than information or data.

Chess rather than poker.

Thank you!

So I’d like to take this opportunity to say thank you to Adrian Fritsch again for his kind words and his contribution to our site. He realized what we should all realize, that contributing to the eco-system in the spirit of cooperation leads to greater long term benefits for everyone.

I hope that startupSQUARE can play it’s part in this, by taking those values to the broader entrepreneur community via our site and help every system build as vibrant a co-founder eco-system as Silicon Valley.


One thought on “What makes Silicon Valley special? – Information is a Commodity

  1. Pingback: Compartilhar o case sem compartilhar o diferencial, como? – Parte 2 | Reflectus Consultoria e Treinamento Especializado Blog

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>