The document summarizes notes from a lecture on Silicon Valley trends. It discusses [1] the "Paypal mafia" and their successful ventures after Paypal, [2] elements that contribute to success in Silicon Valley like mobility and networking, [3] social entrepreneurship areas like microfinance and cooperatives, [4] how social media companies succeed, and [5] green companies and trends in Silicon Valley toward social enterprises and cleantech. Questions from attendees are also summarized around topics like defining social media, reasons for Silicon Valley's success compared to other regions, and impacts of failures and telework.

1. 3.18.11 Tim Clark’s talk notes
Today’s lecture covers a broad range of topics:
• Paypal mafia
a. Paypal – payment system you can use online
b. Mafia – original meaning is organized crime, but here it means a tightly-knit
community that formed from original founding members at paypal
c. All of these people in paypal have moved into many different things
• Important elements of working in silicon valley – being mobile and mixing with
different people
• Mixing models
• Green companies
• Trends
Factpoint – does market research for technology companies -- including Hitachi
Web 2.0 uses content that users are creating.
Cheaper for companies, since use creates the content
Social Entrepreneurship covers many areas:
• Microfinance – kiva/microplace
• Cleantech
• Cooperatives – social sector in japan using organic foods – buyer cooperative, brings
together different buyers
o Old kind of organization
o Seller cooperatives
o (selling raisins – sunmaid)
Question (Seikun): Social media – each social media has to win in the market. How do
they do this?
1. Some are just lucky
2. Some have a great idea which becomes VIRAL – spreads like crazy
• Eg, google
3. Must have very solid technology – if you have millions of users, this can crash the
system
Entrepreneur starts with idea.
The money and people are second.
Question (Kenichi): Definition of social – in social media?
1. Social media is still so new, a clear definition is just being worked out now.
2. Situation is similar to Cloud computing, not too long before, people were not sure
how to define it. Now, people have more of an idea now than they did before
3. Some day soon, people will understand social media better too

2. Use technology
Scalable – start with something small (like a demonstration) and keep going up and up
Business models also need to be scalable.
A few VIA alumni now working in social
Tom Lo – Yahoo to Ebay to Microplace -- is working to make microfinance scalable
Andy Cohen - Success factors (hr software) to Caring.com
• Started from living in bay area, when mother became ill/elderly in Chicago
• Using the web to connect people in same situation that he was in – in need of
information to make a better informed decision
Tom Fricke – Green Mountain Coffee – one of biggest fair trade coffee in the US
• fair trade connects to social enterprise
Recipe for Silicon Valley –
A. Brainpower - start with intellectual capital
• Early contributors were Stanford (Santa Clara, Berkeley too)
B. Venture capital – 3000 Sand Hill Road – bring money to start-ups.
• As 1 in 10 fail, in order for venture capitalists to get wealthy, there needs to be
a BIG return on investment
C. People: innovative, talented, risk-takers
• Technical, marketing, business skills (around finance)
A few Companies that started out of Stanford,
1. HP – one of biggest IT
2. Cisco – originally started running the on-campus network at Stanford – the
technology became available to the commercial field
3. Netscape – first real internet company. Used popular web-browser. Company lasted
6 years. Directly challenged Microsoft… not a good idea. Eventually sold to
America Online.
4. Jerry Yang – grad student at Stanford – started Yahoo
5. No one knew about google for 5 years.
What do these people have in common??
All were born outside of the U.S. and chose to come here to be absorbed into the silicon
valley culture
• Openness to outside talent is important part
Waves of innovation
• Tablet computers, using touchscreen – has been around for 20 years, but
nobody knew how to make it profitable, until apple

3. Question (Lihan) – common point among many of the investors is they are outside the
U.S. People in the U.S. are also very successful, so what is unique about those coming
from elsewhere.
1. Silicon Valley has a Mystique – interests a lot of talented people
Question: Why do so many companies fail?
1. Can be struggling with technology, heavy competition, decline in performance
(people lose interest quickly, start moving to other companies)
Question: Why is silicon valley so successful (compared to boston)
1. Big reason why? Some suggest that it is the weather – easier to live here. Less
diversity in the boston area, more rigid social structure – much more diverse in
California – nobody comes from California.
2. New York – may be cost of living, makes it hard to live there?
Question: Much great rate of failure in business – what do people do after they fail?
1. Try again. Failure is not a disgrace.
2. Learn from the failure
• question to ask – when something does not work, is it because it is a bad idea
or the market was not ready for it?
Paypal mafia – out of paypal – knew each other and went on to start their own successful
companies
Six apart – software behind wordpress
Zynaga – biggest game company
What are trends in silicon valley?
Oracle – has done 40-50 acquisitions in last several years
cloud computing
open source – not selling the code for a profit
Green IT
Web meetings – why are these green? Cut-down on amount of spending on travel
necessary.
Power management software – companies that use a lot of energy – can control the
amount that gets used
Automated systems management – device costs less than people
Digitizing paper processes
Telework – helps make work from home more secure
Helps with electronic work-flow
Question (lihan) – why did you join VIA?
1. Really fascinated by stories that I was hearing about Indonesia.

4. 2. During coldwar, anti-government sentiment at that time was becoming very
strong.
Question (misako) – some negative impact of telework – ie, less face-to-face contact
1. Not necessarily substituting, but is another way to contact people
• Airline called Jet-blue – when you call them, you are contacting them at there
home. This works great for people with children, with disabilities
Question (Kenichi): In U.S., how long does it take for telework to become common?
Silicon Valley goes green and social – how?
Software engineering talent –
Financing from venture capital – doesn’t help all companies (those that are not aiming to
be big and successful, just small and successful)
Entrepreneurial talent
Understanding of politics and government
Global market
Barriers – high costs of living
Increasing competition
Manufacturing (labor cost, supply chain)
Tesla – concern about where they get their supply
Silicon Valley goes social
Hewlett, Packard, Moore Foundations
Google.org – is it csr, or philanthropy, or with regard to energy (may just be for own
savings)
Omidiyar Foundation – does investing and grant funding
Cypress Semiconductor – spun out Sunpower
Applied materials
Lessons from Silicon Valley
Serial entrepreneurs are valuable and pampered – you are much more likely to get
funding once you’ve successfully led a start-up
Really a small community – connections are very important
Doing well (making a lot of money) v doing good (making world better) – sometimes
these two goals are in conflict
Location matters
Question about involvement of government (ken)
1. centers for study of innovation in applied research
2. in energy, may tax breaks and incentives for start-ups in green/clean technology
3. bulk purchase of hybrid vehicles
Question: for cleantech – really needs a system that supports it – is this necessary?

5. 1. Tax credits and investments are mostly federal government.
Questions for ESI participants:
1. Is failing in a social enterprise a negative?
2. Where do you find personal connections for social enterprises?