How Innovation Outgrew Silicon Valley

January 12, 2015

By Dennis Kneale

 

Silicon Valley doesn’t really matter anymore. A high-tech CEO posed that provocation to me recently, though he had founded his company in Europe and had just relocated it to the valley that made innovation famous.

It was a move made mainly for appearances, the CEO maintained, for these days innovation happens everywhere, far beyond the incubator of Silicon Valley. Just as the Internet has taken centralized power and information and distributed it widely to millions of nodes around the world, so has innovation spread far outside the place that provided the tools and platforms that have spawned so much of it.

Vivek Wadhwa, a former software entrepreneur now affiliated with Singularity University and Stanford, has noted this trend as a boost to the global economy. Silicon Valley gave us the microchip, computers and storage, software and the building blocks of the Internet, not to mention Google and Facebook. Other places, Wadhwa argues, will host many of the breakthroughs in the next wave: in 3D printing, Artificial Intelligence, ever-smarter robotics, synthetic biology, medicine and other fields.

The far-flung nature of innovation today shows up in the emerging list of presenting companies for the 2015 Montgomery Summit, sponsored by Macquarie Capital and set for March 10-11. A total 140 firms in start-up and early stages will flex their assets. Last year’s event featured firms from 27 states and a few markets overseas.

The Montgomery Summit’s setting itself speaks to the spread of tech beyond Silicon Valley. For the 12th straight year, the gathering will be hosted at the Fairmont Miramar hotel in Santa Monica, Calif., 350 miles south of Silicon Valley. Los Angeles Mayor Eric Garcetti likes to point out that LA County has more tech jobs than Santa Clara County, in the heart of tech’s home base.

Sure enough, already seven firms based in Santa Monica have been signed up to present at Monty. They include two “first look” prospects with annual sales at less than $10 million apiece: Ring (Internet of Things: a webcam doorbell that lets you check visitors from anywhere via smartphone) and Agent Ace (online matches of homebuyers and real estate agents). In the “emerging” class (annual sales: $10-$50MM) are Santa Monica locals TasteMade (food and travel video network), Woven (online content for brands and GenXers), TigerText (secure real-time texting for the enterprise) and the aptly named DogVacay (online marketplace for pet-care services).

Half a dozen other Monty presenters make their homes in neighboring LA. They include startups I Heart Savvy (wedding planning), Prevoty (cybersecurity for enterprise apps) and MobLabs (mobile apps, with a logo drawing of a dog in a bowler hat, clinching a cigar in its teeth).

To be sure, Silicon Valley will be well represented at the Montgomery Summit. Among those upstarts signing up for the invitation-only summit are, in Mountain View, Blue Data (a stealth-mode startup in secure Big Data clouds for the enterprise) and its neighbor, Nod Labs (not to be confused with MobLabs named above; Nod Labs lets you control gadgets with your gestures). Other Valley denizens will include C9 (predictive sales software) and Motif (fin-tech), both based in San Mateo, and Bromium (enterprise security and virtualization) in Apple’s hometown of Cupertino.

Otherwise, though, Valley startups are so… five minutes ago. Which is why Monty 2015 also will feature companies based in Dallas (Brierley & Partners, Firehost) and Austin (Bypass Mobile), Chicago (Brand Muscle, Avant Credit, Kapow Events), Atlanta (Damballa) and Vero Beach, Fla. (Bridgevine).

There even are a couple of throwbacks to the old days of tech clustered along Route 128 in the Boston area: Valore (which runs SimpleTuition for online education loans), and 3Play Media, a “first-look” candidate based in nearby Cambridge (captioning and translation for online video).

The Milken Institute just published its annual index of “Best-Performing Cities,” and while the top 5 include two Valley citizens—San Francisco (#1) and San Jose (#4)—the other three are tech powers in their own right: Austin, Texas (#2), Provo, Utah (#3) and Raleigh, N.C. (#5). Milken calls this factor “the innovation advantage.”

Interestingly, some of the very same breakthroughs and technology platforms created by the great minds in Silicon Valley now work to the Valley’s own detriment, empowering entrepreneurs and geeks to innovate in dozens or even hundreds of other places.

The ubiquity of the smartphone, thanks to the kickstart provided by the Apple iPhone, stokes this innovation wave. It puts supercomputer power in the palms of millions of people in regions that lacked the basics of banking, clean water and electricity only a few years ago. This provides millions of new customers reachable online, and it unlocks innovation from thousands of new entrepreneurs among them, who suddenly are able to reach a broader audience.

Also, it’s never been easier to start a new company, thanks to the rise of outsourcing and the availability of plug-in, “insta-firm” services such as hiring, sales, design, sourcing, manufacturing, marketing and more.

All of that has empowered entrepreneurs in the developing world, but let’s be clear: The U.S. remains, by far, the world’s foremost Innovation Nation, the leading hotbed of creativity, innovation and capitalism, where breakthroughs can reap billions of dollars in new wealth. We will get a futuristic peek at the next technologies—and a few future members of the next generation of billionaires, perhaps—at the Montgomery Summit in March.     Looking forward to it.