Tuesday, February 2, 2010

Evolution of the Silicon Valley

When I arrived in the Silicon Valley, it was the center of the universe for anything connected to silicon. Engineers, scientists, and researchers at the many think tanks were outbraining the Russians and inventing so many new technologies that still today young entrepreneurs are trolling expired patents and old papers to create new products. Some think tanks like Fairchild, SRI, and Xerox PARC generated cascading start-ups, because invention was much faster than business creation.

Parts of the Valley, like Sunnyvale, were mostly orchards. For example, when Dave Packard had a new crop on his orchard on Page Mill Road, his secretary Margaret would put a brown bag full of fruit for sale at the coffee station where engineers picked up the free doughnuts every morning.

Successful entrepreneurs had expansive houses in Atherton, Woodside, or Los Altos Hills. Palo Alto was a quaint city with a Woolworth on University Avenue and mostly inhabitated by technologists and executives at high tech companies. Houses were typically 1500 to 2000 square foot Eichlers or squarish ranch houses, with a little Accord in the driveway, and costing almost a decade's worth of salary.

Today the technologists are largely gone, replaced by investment bankers and lawyers. Technology is more lucrative as the object of patent litigation, often by nonpracticing entities, as elucidated in a recent PriceWaterhouseCoopers study.

Patent case filings and grants

Fortunately for executives, land in Palo Alto has become much more affordable, just a few months worth of their compensation. Therefore, contemporary needs of entertainment space for wine cellars, movie theaters, media rooms, gyms, nanny suites, etc. can be met by building 4 story houses (two underground and two above ground), because the house to parcel ratio requirement can easily be met by buying two or more adjacent lots and consolidating them.

Now that the technologists are gone, what is happening to Photonics West, one of the largest conferences in the Silicon Valley with over 15,000 attendees? Well, EI has been priced out of the Valley and will be held at the Hyatt Regency San Francisco Airport Hotel next year.

Photonics West already was in San Francisco this year. As EI came to a close, we were wondering what impact it would make to the local hotels, with this January event leaving San Jose after 20 years. I was walking with Mary and John McCann towards the Fairmont Hotel, where we were to discuss with Alessandro Rizzi what we learned from the Dark Side of Color session. We figured this former noisy Photonics West headquarters must be very quiet now.

Wrong we were! The place was full of furry animals.

Alessandro Rizzi, Carinna Parraman, Mary McCann, and a Furry

Eventually, there is no impact to the local economy for us techies leaving. Photonics West has been replaced by FurCon as the annual conference in the third week of January. In the picture above: Alessandro Rizzi, Carinna Parraman and Mary McCann with a Furry in the Fairmont lobby.

For the report on the local news, click here. Food for thought.