# 22 – The (no BS) truth about Silicon Valley – Start of Season 2

In episode 22, we begin the second season of Tech Deciphered, by deep diving into what Silicon Valley is, what made us (and others) move here, its unabridged mythology and whether there is really an exodus (or not) going on. This episode is the beginning of a trilogy that is an ode to our love and hate relationship with the region. Navigation: Intro (01:34) Section 1: What (exactly) is Silicon Valley? (02:23) Section 2: What brought us (and others) to Silicon Valley? (32:15) Conclusion (46:09) Our co-hosts: Bertrand Schmitt, Tech Entrepreneur, business angel, advisor to startups and VC funds, co-founder at App Annie, @bschmitt Nuno Goncalves Pedro, Investor, co-Founder and Managing Partner of Strive Capital, @ngpedro Our show:   Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news. Subscribe To Our Podcast Intro (01:34)Nuno: Welcome to season two of Tech Deciphered. Today, because we like to do really long episodes, we will start our trilogy on Silicon Valley. This episode will focus on what Silicon Valley actually is. We'll go into the geography of Silicon Valley, the origins of Silicon Valley, the development of Silicon Valley. Then we will also talk about what brought us here, what brought Bertrand and myself to Silicon Valley.  In the next few episodes, we will go into the mythology and reality of Silicon Valley as well as other areas of love and hate , and we will finalize with Silicon Valley in transition. Is it a mindset? Is there an Exodus? Is there a no exodus?Bertrand: Thank you Nuno, good to be here with you today.  How are you?Nuno: I'm well, so let's start with what is Silicon Valley? Section 1 - What (exactly) is Silicon Valley?Today we start with what is Silicon Valley? And one could say Silicon Valley is a state of mind, but it's actually a region of the world with a long history behind it. Bertrand do you want to guide us a little bit through the long history of Silicon Valley and where we're at?Bertrand: Yeah, sure. So as you say, it's a long history, but that depends by which standard? Nuno: For someone from France and Portugal probably not very long, but yes.Bertrand: Or ChinaNuno: Long from a US perspective, I guess. Bertrand: It's one of these places where you don't have much standing that is more than a hundred years old, and one could argue, it might be because of earthquakes. But not just, I would say the modern California is probably and Northern California is probably 150 years old, started with the Gold rush.And maybe before I go to the gold rush, obviously California was  in some ways discovered by the Europeans  500 years ago Nuno if we go back  to the origins of California and Northern California, and it was a spaniard, a Portuguese?   Nuno: We will not have that discussion. And obviously it's not questioned whether it was discovered, it was here, and there were native people here and then.  The Spanish conquistadores arrived. There is some argumentation whether Cabrillo  was actually Portuguese or Spanish, but he was definitely working for the Spaniards.So we'll let them do that. We'll let the Spanish people get that.Bertrand: Yes.  So California  was interspersed by a lot of missions and that connected the main roads. Actually historically the main road in Silicon Valley, El Camino Real, Nuno you want to say what it means.Nuno: Yeah, the Royal way. So it was a way that was put there to connect the different missions. And it was the Royal way because the Spaniards were here at the service of obviously the monarchy in Spain. And that's why it was called the Royal way or Camino Real. So now, you know.  Bertrand: And so, that's for me interesting part of Silicon Valley to think that you are on the Royal way most of the time when you are going from city to city. And actually California became American after a fight between  some different powers from Mexico to Russia to France Nuno: Having in the first five minutes should avoid creating a geopolitical clash. So yes, there were people here and then there were other people here and then there was some wars and we don't have a view, we will have no judgment, we will just shut up.Bertrand: No judgment. And  so that was around 150 years ago. What happens then what started to accelerate very quickly after California became part of the US and one of the latest state was the gold rush. And actually  California is called the Golden state. Golden, not because of the sunrise, but because of the gold.  That's what started it all in the sense that's what started to bring people to California. California had native people, as you said, but ultimately not so many. And that's when started that big rush of people coming to California. And for me, that's an interesting story to remember, that in a way California was started with the gold rush, a true gold rush, but we are still even today in the middle of a gold rush with tech companies. So there has been a mindset for now 150 years of coming here, trying to establish something new, trying to build wealth and trying to do it quickly if possible.And people from all over the country or from all over the world coming here. When you think about it, people from all over the place from Europeans, Asian were coming already for that gold rush or at least were promised land of opportunities.Nuno: And one important aspect is obviously the building of the railway connection to the rest of the United States. And so the importance of not just looking for gold here, but also the importance of creating an infrastructure that connected in some ways, the country from one end to the other was pretty vital.And thus, we had all these different workers and, it was the notion of going West. That's where the opportunity was, where the new riches was the land was. And obviously ideally the gold was right. There was always this object at the end of the day of which was more valuable than everything else.But in some ways it does characterize the mindset, this notion of opportunity that we take a little bit for granted, of the American dream. It's actually very, probably best edified at the two edges of the coast, New York and here. And in some ways San Francisco was that. San Francisco was the polar center in many ways of that gold rush and that development.Bertrand: Yes.  and so after that, what we have seen is California being first farmland you had on some part, gold rush then you had farmlands, huge lands. One uUof the biggest estate was the one from Mr. Stanford, who ultimately gave some land to Stanford University.   Nuno: And being an alum of Stanford, I have to represent that this gentleman was a railway tycoon. So there's some argumentation on how he actually made his money, but the most edifying piece of it is, the fact that they decide to build the university and decided to create and give away the land and give his resources to it, and structure the land in a very special way.I don't know if you know this Bertrand but the land of Stanford really cannot be sold. So there's stuff today that is in Palo Alto that is actually owned by Stanford and it's really long-term leases, but it can't be sold. So it's not like the university can get rid of land just to pay for stuff. They actually can only lease it really over long periods of time.So very interesting you know how someone made their money out of this, literally this gold rush or this going West build of infrastructure and then decide, okay, I'm going to give it back and I'm going to build something that's bigger than me. And it will withstand the test of time and it has shockingly enough.Bertrand: Definitely has. Is one of the better names thanks to that act.  From there we got the development of the aerospace defense industry, as well as semiconductor and measurement industries. And it started probably just right before world war two.The late 1930s that we saw that growth in these technical science industries.Nuno: Yeah and actually the beginning of the 20th century, there was already quite a lot of things going on because of Navy and the presence of trying to communicate and doing transpacific communications, obviously Marconi had already done the transatlantic connection on the other side.So there was already a little bit of an impetus to have the military involved. And if we look at California in general, not just the Bay area there are still military bases in California, obviously San Diego having very significant native presence. And in some ways, a lot of people, when they talk about Silicon Valley, they always talk about later Silicon Valley.They don't talk about the beginning of Silicon Valley, which as you mentioned, rightfully so was really fueled a lot by defense contracts, the aerospace, the Lockheed Martins, et cetera of the world that were really building things that were infrastructurally very important in terms of the defense or the perceived defense of the United States.And then with the war and world war two in particular, that became pretty vital to the development of the American economy.Bertrand: And then in a way the Silicon Valley we all know  was really started with HP. Stanford alums  setting up shop close by. Building their first measurement tools and step by step developing quickly the business thanks to the war initially. And basically they also started this myth of the garage we might talk more about that. The business was started in a garage in Silicon Valley. And sadly so HP is not, at least HP enterprise is not headquartered anymore  in Silicon Valley. Nuno: They sold their measurement unit effectively. So Agilent was sold some time ago. It was spun off some time ago.Bertrand: Yeah I was talking about the more recent spinoff from HP enterprise ....