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Where to After Peak Silicon Valley?

Friday, September 2nd, 2016

Exorbitant rents, poor living conditions, long commutes, market saturation, unaffordable competition for talent — there are myriad reasons to leave Silicon Valley.

And many are doing just that.

According to a report by the Silicon Valley Competitiveness and Innovation Project: “For the first time since 2011, net domestic migration in Silicon Valley was negative, meaning that more Silicon Valley residents left the region for other parts of the U.S. than arrived from other parts of the U.S.”

Some food for thought:

  • The energy of youth can propel a determined person to suffer inexplicable hardship in the quest for success. But programmers age, too. Years of long work hours are exhausting and can take a major toll on one’s physical and mental health. And what if they want to get married and have kids one day?
  • It can cost upwards of $1,000 a month to put a single child in daycare in Silicon Valley, and the average house costs between $1 million–$1.25 million.


The case for opting out of the Valley

It bears reminding that Silicon Valley isn’t the only place to get a good job and start a company.

In Canada, ecosystems in Montreal, Toronto, Vancouver, Waterloo and Ottawa have been prolific in their output of solid tech companies. There are hundreds of accelerators and incubators available and more money by way of government funding, venture capital, angel investing and otherwise is finally coming in, offering Canadians — and even foreign workers — the opportunity to build their companies on Canadian soil.

And let’s not forget other U.S. regions, particularly hotbeds of tech and startup activity in Austin, Boston, New York City, Chicago, Seattle, Denver and Los Angeles.

NYC and parts of LA aside, these places have access to many of the same venture capital funds as their Cupertino cousins.   


Tel Aviv

Beyond North America, Israel’s tech sector — nicknamed Silicon Wadi — has had a historical trajectory similar to that of Silicon Valley. However, costs are much more manageable, and there is ample financial support for startups.

More bonus: A one-bedroom apartment in downtown Tel Aviv costs an average of US$1,158 and there are currently lots of developer job listings.

The 2015 Global Startup Ecosystem Ranking report Compass identifies Tel Aviv as having the biggest startup ecosystem outside of the U.S. and fifth biggest globally. The report gave Tel Aviv high marks on financing and talent, and named it third in the world for total exit value.

And Tel Aviv startups travel well.

In 2014, Israeli driverless-car software maker Mobileye raised US$890 million in its initial public offering on the New York Stock Exchange.

The city is also home to Waze, PrimeSense, Moovit, and other tech standouts.


Sao Paulo

The Brazilian city of Sao Paulo ranks 12th overall in the Compass report. Sao Paulo is a bit of a renegade. It’s the only Latin American city to make the Top 20 in spite of a violent crime problem that makes international headlines, as well as Brazil’s economic and political turmoil.

Brazil is young in terms of ecosystem maturity, meaning it needs more experienced entrepreneurs. There’s also money there (both local investment and foreign investment focused on Brazilian companies)  — not to mention hundreds of societal, governmental, economic and other problems that technology may be able to solve.



The Compass report called Bangalore the startup capital of India, counting up to 5,000 startups in the city. It also says Bangalore had the second-highest growth rate among the Top 20 for VC funding and exit volume.

Known as “the world’s back office” for its prominent call-centre business, Bangalore is stepping out on its own. ”There are more start-ups here, more VC money here, that virtuous cycle is in full spate… These entrepreneurs are very young, very ambitious, changing the world kind of people,” Nandan Nilekani, a billionaire who made his fortune founding Infosys, told the Financial Times.


The wildcard: China

China could be dangerous for established markets if and when the country dismantles the Internet firewall created to stifle dissent. Online censorship makes it hard to tap into the pulse of China, but in a domestic market with 1.4 billion people, chances are they’re working on something big — very big.

The country has already created a “super app” in the form of WeChat, which makes even Facebook’s size and scope look small.

Other Chinese stand-outs include Didi Chuxing, a mobile transportation platform that recently took over Uber’s operations in China. Its total funding is $7.3 billion, of which $4.5 billion came from Apple private equity in June 2016.

Xiaomi, with $2.45 billion in angel funding, develops smart devices and software. Meituan Dianping is a new merger of two popular group-buying communities. In January 2016 it attracted $3.3 billion in investment.


A Brief History of Hacking

Thursday, August 4th, 2016

In 1957, a blind boy in Virginia used a high-pitched whistle to unlock his phone line, giving him free long-distance phone calls and establishing a hack with a direct line to Apple Inc.  

Joe Engrassia, Jr., who changed his name in 1991 to “Joybubbles,” is widely considered to be the father of phone “phreaking,” a technology famous for inspiring Steve Jobs and Steve Wozniak to build a machine that could emulate the pitch frequency needed to control AT&T’s phone lines.

Wozniak, then a 21-year-old Berkeley college student, designed his “digital blue box” after reading 1971 Esquire article “Secrets Of the Little Blue Box.” For little more than $100 in parts, he and Jobs had hacked the global phone network. Jobs said the experience led them to build the Apple computer, a company worth more than $500 billion.

Technology journalist Clive Thompson, who’s currently working on a book for Penguin about how programmers think called Hello, World, says the blue box is emblematic of a certain subset of computer hackers.


“There’s a type of hacker that gets into computer because they enjoy screwing around with what they can get computer system to do, and that often involves stuff that’s thinly legal or totally illegal, because the fun is taking a system and seeing how to exploit weaknesses,” Thompson says.

That kind of curiosity-driven hacking made Wozniak a white-hat hacker, a term used to describe people who, loosely, like to take things apart to see how they work (and don’t work). Whether it’s legal or illegal is often beside the point because white-hat hackers are generally non-malicious and their exploits are often used to strengthen the very systems they hacked. Thompson points out that Apple has hired several people who were able to jailbreak and hack iPhones.

Those activities have also led to a number of tech advancements, perhaps most notably the open-source movement responsible for creating reams of non-proprietary software used by many of the world’s biggest technology companies. It was one of the first times a single piece of software was so widely adopted by the free market. “That kind of creativity can easily fold over into the type of creativity that capitalism rewards,” Thompson says.

There’s a direct correlation between the way open-source software permeated business and the developer culture we have today. It’s been enormously advantageous for companies to hire people who want to crack software open to play around with its insides, because they are some of the most motivated, clever and creative people in the world.


Gabriella Coleman, a preeminent scholar on hacker collective Anonymous, who holds the Wolfe Chair in Scientific and Technological Literacy at McGill University in Montreal, wrote in a recent essay:

So many hacker sensibilities, projects, and products are motivated by, threatened by, or easily folded into corporate imperatives. Take, for instance, the hacker commitment to autonomy. Technology giant Google, seeking to lure top talent, instituted the ‘20 per cent policy.’ The company affords its engineers, many of whom value technical sovereignty as part of their ethos, the freedom to work one day a week on their own self-directed projects.

Coleman points out that this does, unfortunately, lead to some people working 100 hours a week — a profound devotion to programming that has become a hallmark of developer culture. “Silicon Valley is smart in exploiting hacker tendencies, but people are also willing,” she says in a phone interview with TechPORTFOLIO.

Hackers in this area are generally amenable to the prospect of making money, though it’s usually not their main motivation — at least not at first. Coleman says hackers who become developers at companies often tire of the clock-in, clock-out grind of the corporate world and seek to create their own, more fulfilling projects, which has been a major catalyst in startup culture.

“Cool Technology” and “Lots of Money”

“In regions like Silicon Valley, and in other startup culture areas, there’s a very tight fusion of actual hackers who want to make cool technology and also want to make a lot of money,” she says.

There’s another side to hacking that’s probably best represented in popular culture by Mr. Robot, which focuses on an antisocial, anti-capitalist hacker widely believed to be inspired by hacktivist group Anonymous.

The Occupy movement, WikiLeaks, Edward Snowden and Chelsea Manning have all helped the public gain a greater consciousness, and even admiration, for hacking as a public service, leading to the rise of the Robin Hood hacker profile.

That such seemingly selfless acts, often driven by anti-capitalist ideas, have been repurposed by film and TV studios to make millions of dollars is ironic. “Hollywood has long made a lot of money off domesticating supposedly seditious ideas,” Thompson says.

Still, whether archetypal hackers — often highly intelligent and creative individuals who like to take things apart and who are generally mistrustful of the establishment — have been co-opted to form a developer culture that has fed tech startups, and therefore, capitalism, is a tricky question.

“Call out the Bullshit”

“It’s a really weird, and interesting moment, where the two discourses are really strong. They are in competition with each other,” Coleman says.

That said, the divides between discovery-driven hacking, Robin Hood-style hacking, hacktivism and black-hat hacking, aren’t as deep as some may believe. In fact, these spaces can be very fluid, and many hackers (and developers, by extension) dip their toes into these different waters from time to time. Experimentation and publishing boundaries are part of hacking’s core ethos, after all.

“There’s a politics to hacking no matter what, because so many of them are willing to call out bullshit and break the rules,” Coleman says.

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