Guns, Germs, and Silicon Valley?

Yesterday I finished reading Guns, Germs, and Steel by Jared Diamond, and in the final hour of reading something sparked my attention:

Throughout history and despite relatively uniform intelligence across all of humankind, Diamond argues that widespread innovation had been limited to only certain countries in particular geographical contexts. He goes on to mention that innovation (as seen in those countries) was driven by the presence of higher population densities, close proximity to a number of neighbouring countries, and higher degrees of competitiveness between countries.

Naturally, I wondered, could this concept explain why so much technology innovation has led to an abundance of successful tech companies in the Bay Area, and to a lesser but still significant extent, the Greater Boston Area? On the flip-side, could this concept also explain why so many technology companies created in other regions have higher failure rates?

According to Diamond, innovation is driven by population densities of sorts. The Bay Area has one of the richest selections of successful and pioneering IT/internet/mobile technology entrepreneurs on the planet. As far as competitiveness, the US is the epidemy of a Capitalist nation, and competition is as fierce domestically as it is internationally (if not more fierce).

Note: As far as the Bay Area goes, I believe it remains at the apex of innovation due to its abundance of human capital, sharing of know-how, entrepreneurial culture, access to world-class research facilities/universities and venture capital financing. However, I do buy into the fact that proximate competition can help to turn good ideas into great ideas when the developers of the ideas have the ability to see and innovate on top of other very good ideas very quickly.

Although I don’t have the time and/or resources to explore this in further detail, I find this to be an interesting theoretical discussion about how a local geography can evolve in such a way that promotes rapid innovation in a particular niche. If you have an opinion on the matter, I invite you to please share it below.

Business and Military Strategy

I have been reading the book Guns, Germs, and Steel by Jared Diamond, and it has inspired a concept/theory on developing competitive online and mobile businesses that I am going to pursue further in my work with our portfolio companies.

At one point in the book, Diamond discusses the invent and adoption of guns by a number of countries. At the time, guns were the most powerful weapon. Countries that failed to adopt and manufacture guns for military use (the reason did not matter, whether cultural, tactical or lack of know-how), eventually succumbed to their neighbors or other invading troops in possession of such advanced weaponry.
A parallel can be drawn to online or mobile businesses in today’s world that have a product, but are not leveraging the necessary tools (or “weaponry”) to compete aggressively. Consider a small, vulnerable startup without “guns” taking-on larger industry giants with “guns.” The startup needs to get on level footing before any shift in market share or significant user adoption takes place. Another way to view this is to ensure your product has at least the same level of core functionality as your most significant competitors, and then innovate on top of that base. Note: There are obvious exceptions and I am being general in my statement.
Right now, there is an unprecedented number of free tools that allow business to increase the virality, social interaction, visibility and overall stickiness and competitiveness of a product or service. These can and should be leveraged to topple giants.
Virality and Social Interaction: I am referring to the use of Facebook Connect and Twitter/OAuth to increase social interaction, sharing of links, and recommendations to a user’s social network. The websites that have adopted the use of Facebook Connect have seen massive increases in hits to their website; laggards and late-adopters are suffering, and those who adopted early are reaping the benefit. Use Facebook Connect. Virality can be spread many other ways; remember content is still king — create a company/product blog and start a Twitter feed to inform your followers about industry trends and product updates; also make sure to address any concerns that users voice about your product. By using Twitter, companies can stop bad press before it starts, which could save startups one of their nine lives so to speak.
Stickiness: Give users a reason to return to your website or mobile application. Can you think of way to demonstrate continuous value to users of your site? If you can, you may enjoy more frequent visits from users. A user’s return could be influenced by social pressures (responding to a request driven/initiated by a friend), self-interest (check alert / view an update), curiosity and general need. Make use of different technologies to stay in touch with users, according to the preferences they like — allow them to select options including email, SMS (may be costly), Facebook, Twitter or through other widgets that may integrate with iGoogle or other portals.
I am going to continue to develop this theory. The next book on my reading list is Art of War by Sun Tzu; I hope that will be a good catalyst for a good follow-up post.
As always, I invite you all to contribute your thoughts below. Can you draw any other parallels between military strategies and business?