One year ago I moved into Mountain View. Six months later I started working for a start-up company and I’m still learning about the Silicon Valley atmosphere. In a few articles I want to familiarize you with Silicon Valley.
As you know, Silicon Valley is a leading hub for high-tech innovation. Silicon Valley is named after the base material for semiconductors in the chip industry. It was here that the transistor, integrated circuits, the microprocessor, and the microcomputer were brought to mass production. Early notable companies are Hewlett-Packard, Bell Labs, Shockley Semiconductor, Fairchild Semiconductor, and Xerox PARC. Stanford University have played a major role in the development of this area. The predecessor to the internet, DARPANET, had one of it’s four original nodes here at Stanford. The Bay Area had long been a major site of United States Navy research and technology. NASA and Lockheed are based here. The huge hangar on Moffet Airfield in Mountain View once housed a huge flying cigar. At the moment Google maintains the airfield and the hangar.
Anyway, now Silicon Valley is dominated by software and internet companies. Current notable Silicon Valley companies are Microsoft, Google, Facebook, WhatsApp, LinkedIn, Intel, Tesla, Apple, NetFlix, Adobe, Ebay, Cisco, Symantec, Yahoo, etc. Software and hardware engineers are also called hackers, techies, or tech kids. Hackers usually don’t exploit weaknesses in security systems but are customizing electronics or developing software applications. Hackathons are multiple-day-long events where hackers team up in a contest to develop a software application (an app), or electronic device. A hackerspace, or makerspace, is a place where hackers come together. The Hacker Dojo in Mountain View is one of the bigest hackerspaces in the world with over 500 members. It’s a meeting place for engineers, entrepreneurs, hobbyists, and investors. Daily there are at least three events at the Hacker Dojo. A large number of Silicon Valley start-ups work daily out of the Hacker Dojo as their primary location. Notable Hacker Dojo start-ups from the past are Pinterest and Pebble.
Hackerhouses are houses where people rent a bed for about $800/mo, share the house, and bathroom with about 10 other people. The are often populated by entrepreneurs who want to focus on their start-up and reduce cost of living.
In 1970 venture capital (VC) firms emerged in Silicon Valley. They invest in early start-ups. Now Silicon Valley accounts for one-third of all of the venture capital investment in the United States. Pitching is done by entrepreneurs seeking funding from venture-capital firms. In a 5-10 minute presentation they give arguments to invest in their idea/company. VC funding is often offered in six stages. 1 Seed funding is provided by angel investors (angels) and is to prove an idea. A modern alternative is crowd funding. 2. Start-up funding is for product development stage. 3. Series A round is for early sales and manufacturing stage. 4. Second-Round is for selling products, but not yet turning a profit, 5. Expansion funding is for companies making profit and 6. is called Exit, which means the venture capitalists leave because the company is sold or enters the stock market (going IPO). Sand Hill Road in Menlo Park is notable for its concentration of venture capital companies. However, there is little to see from the street.
Start-up companies may also work from an incubator for the first few stages. Incubators are actually companies that provide start-ups with office space, mentor ship and guidance for a period of 3 to 6 months. Incubators also provide shared administrative services, help with marketing and product development, and sometimes invest $10 to 50 thousand for 5-7% share in the company. YCombinator is a famous tech incubator in Mountain View. At the end of the Incubator period, on Demo Day, the entrepreneurs pitch for further financing and then the start-ups leave the incubator.