The New York Times recently argued that, when it comes to creating innovative technology, geography matters -- and that Silicon Valley is still the place to be for anybody with start-up ambitions.
Give birth to an information-technology idea in Silicon Valley and the chances of success seem vastly higher than when it is done in another ZIP code.
This is a topic close to my heart, as a few years ago I wrote and directed a documentary called In Search of the Valley, whereby I traveled to Silicon Valley and -- over the course of a month -- visited and talked to many of the valley's luminaries to ask the very question of: what makes the Valley so conducive to producing innovation, compared with other parts of America and the world?
That's not to say that tech innovation can't in fact come from anywhere -- it frequently does!. The internet allows ideas to be shared easily and more quickly (wherever they might originate) and for people to collaborate over time and space, like never before.
However, Silicon Valley still has at least one thing in abundance, compared with other innovation hot-spots around the world: the much needed cash, or to be more specific, Venture Capital and the connections that enable money to flow from one new company to another.
About one-quarter of all venture investment in the United States goes to Silicon Valley enterprises. And, according to a new report from Joint Venture: Silicon Valley Network, a regional business group, the percentage has risen, to 27 percent in 2005 from 21 percent in 2000.
I was therefore delighted to be contacted by Brad Cohen of GroupScope, to tell me about their product LinkSViewer.com –- a web-based visual networking tool for exploring capital relationships in Silicon Valley. By pulling in data from the Link Silicon Valley database, the application allows users to create a 'relational map' between management teams, outside board members, investors, and companies in the Bay area.
To demonstrate the software, Brad started by creating a map showing the capital relationships surrounding the big three social networking sites based in the Valley: Facebook, Friendster, and LinkedIn.
The map reveals that, for example, the VC firm, Sequoia Capital, invested in both Friendster and LinkedIn -- two of the earliest social networking sites to originate from the Valley.
I also noted from the map, that one individual, Reid Hoffman, plays a key role in all three social networking sites, and lots of other companies in the social web space; either as an investor or in a management or advisory role. Hoffman was a founding board member of PayPal, and was Exec. VP at the time of acquisition, and is also a co-founder and current Chairman of LinkedIn.
Update: More discussion over at Slashdot.
If you are a company about to launch an exciting new social web service or product and would like me to take a look, get in touch.