Think DifferentAnd be different

Yang Chung ( 정양섭 )

Agenda• What is Silicon Valley• Why is it unique?• Fraternity of Geeks• Investment and reinvestment• Not all rosy• Current (biased) trend

Disclaimer• I have certain biases

– Silicon Valley– Startups– Internet and web applications

• I know little about development environment in Korea

• No personal agenda but hope to change 1% of the audience

• Occasional Ruby on Rails Hacker– Hacker == a programmer who gets things done

Where is Silicon Valley?

Source: Joint Venture Silicon Valley 2008 Index

Some StatisticsArea: 1,854 square miles

Population: 2.49 million

Foreign Born: 36%

Origin:57% Asia32% Americas9% Europe1% Oceana 1% Africa

Ethnic Composition

41% White, non-Hispanic28% Asian, non-Hispanic25% Hispanic; 3% Other3% Black, non-Hispanic<1% American Indian, Alaskan Native

Source: Joint Venture Silicon Valley 2008 Index

Adult Education Attainment

13% Less than high school19% High School Grad24% Some College26% Bachelor’s Degree18% Graduate or Professional Degree

Median Income

Source: Joint Venture Silicon Valley 2008 Index

Income Distribution

Source: Joint Venture Silicon Valley 2008 Index

Value Added

Source: Economy.com

Silicon Valley Clones?• Brazilian Silicon Valley - Campinas, Brazil • Mexican Silicon Valley - Jalisco, Mexico • Multimedia Super Corridor - Kuala Lumpur, Malaysia • Research Triangle - North Carolina • Route 128 - Massachusetts (known as the "Silicon Valley of the East

Coast") • Silicon Alley - New York, New York, Broadway from the Flatiron District

to TriBeCa, and parts of Brooklyn • Silicon Forest - Portland, Oregon • Silicon Prairie - the region around Schaumburg, Illinois, Dallas, Texas,

and Ames, Iowa • Silicon Sentier - France • Silicon Glen - Scotland • Silicon Hills - Texas, United States • Silicon Valley North - Kanata, Ontario, Canada and Ottawa, Canada • Silicon Valley of India - Bangalore, India • Wireless Valley - Stockholm, Sweden

What is the Secret Sauce?• Capital• History

– Mentors, Experienced Entrepreneurs• Institutions• Culture

– Attracts geeks, Dream big, It’s okay to fail, Create Value

• Infrastructure – Office space, Lawyers, Accountants, Investment

Bankers, Executive Recruiters, Marketing Consultants• Luck

Traitorous EightShockley Semiconductor

Gordon Moore, Robert Noyce Jean Hoerni, Jay

Last, Sheldon Roberts

Amelco

Jean Hoerni

Eugene Kleiner

Silicon Valley Transformation

Founders are Engineers & Start Early

Age: 22

Age: 19

Age: 25

Age: 23

Age: 26

Engineer (America)

Engineer (America)

Engineer (Russia)

Engineer (Ukrania)

Engineer (Taiwan)

Age: 28Engineer (France-Iran)

Serial Entrepreneurs

Evan Williams

Marc Andreessen

Max Levchin

Fraternity of Geeks – PayPal Mafia

Fraternity of Geeks - SUNVinod Khosla

Andy Bechtolsheim

Bill Joy Scott McNealy

Granite Systems

Kealia

Fraternity of Geeks – Y-Combinator

Paul Graham

Has funded about ~80 startups

Incubator

Don’t trust anyone over 30

Notable Venture Capitalist Firms

Happiest Moment (One of)

With Jessica Livingston, author of “Founders at Work”

Commonalities among successful startups• All started by an engineer(s)• Their original idea didn’t work out.

– It had to be changed multiple times • Started out as a hobby or side project

– Missing tool or to fill one’s own needs• Incredible emotional rollercoaster

– Many ups and downs• Having a co-founder(s) helped a lot during down times• Relentlessly resourceful and frugal (Ramen Profitable)• Fate unknown until the last minute

Common Advice to Startups• Make something people want

– Best business model won’t work if no customers– If people love your product, it’s easy to monetize

• Fail Often, Fail Early• Iterate, iterate, iterate• Ideas are cheap and will change over startup’s life• Must have a co-founder(s)• Talk to at least 30 people a week about your idea• Start early• Valuation = $500K x engineers - $250K x biz/marketing

Trend• Small team (4~5), small fund ($100K or less), MacBooks• Rapid and agile development till beta/prototype (< 4

months)• Little or no VC funding or VC becoming incubator• Open

– Google API, Facebook API, Twitter API, OpenSocial, OpenID, OAuth, GitHub, etc.

• Language/Architecture– RESTful architecture, Ruby on Rails, Python and

Django, Java and Clojure, CouchDB, etc. • Cloud/Language-Specific hosting

– Amazon EC2, Engine Yard, Heroku, Google App Engine

Most Recent Example• Mint.com was bought by Intuit for $170M (3 years)• Three founders: Aaron Patzer, Matt Snider, Poornima

Vijayashanker• Started in Aaron’s apartment• All open source == Free

– MySQL, Hibernate, Tomcat on Apache, Yahoo’s YUI• Free legal help for equity stake• Incubator-type shared office• Blog instead of advertising, No Search Engine Marketing• Team members from New Zealand, France, Tunisia,

Armenia, Ukraine, Russia, Canada, Greece, and all over the U.S.

Hockey Stick Growth - Facebook• Current Number of Users: >$300M (as of

9/15/2009)• Cash Flow Positive

Hockey Stick Growth - Twitter

Worldwide unique visitors: 21M in June 2009 (2,000% YoY growth)

Recession is good for startups• Many available talents• Cheap resources

– office space, professional services• Accidental entrepreneurs

– Laid off or frustrated with more work and less people– Forced to be creative

• Less competition• Companies started in past recessions

– IBM, GM, GE, HP, Microsoft, Apple, Texas Instruments, Revlon, Disney, Intel, FedEx, Symantec, Procter & Gamble, etc.

Not All Rosy• 9 out of 10 startups will fail, most of them within

one year– Must have one or more co-founders– Team is more important than an idea– Hard work– Need luck

• Venture Capitalists bet on 1 out of 10 companies being wildly successful– Offsets other losses

Why Should You Care?• You don’t have to care• Only one life to live and life is short• A chance to start a company diminishes as you get

older and have more responsibilities (boy/girlfriend, wife, kids, etc.)

• Taking a chance early makes you recover better in case of failure

• More than one way to succeed in life• Dream big, Challenge the status quo, Be ambitious,

and Have Fun• Make sure you fund other geeks when successful

(Biased) AdviceNO! YES!

Less drinking More hacking

Less Local More Perspectives

Less Walls More Open

Challenge• Host a Startup Weekend • What is a Startup Weekend?

– 54 hours to go from idea to launch– Anyone can pitch an idea for two (2) minutes and

form a team by Saturday morning– Teams present and demo their product in five (5)

minutes to panelists and other teams on Sunday night

– Nominal fee (~$30), which is used for providing food– Only needs a space from Friday night to Sunday

night– Teams can continue or not after the event