From: acquiredfm
Silicon Valley, traditionally a geographical hub, is undergoing a significant shift, evolving from a physical location to a “state of mind” [02:33:01]. This decentralization is enabling a new era where technology and innovation can thrive across the United States and beyond.
The Shifting Landscape
Historically, Silicon Valley was a place where those aspiring to build a career in technology felt compelled to relocate [05:29:59]. However, the COVID-19 pandemic acted as a catalyst, demonstrating that founders and innovators no longer need to be physically present in San Francisco to succeed [05:20:01].
This shift has profound implications:
- End of Brain Drain: For decades, states experienced a “brain drain” as ambitious individuals moved to major tech hubs like San Francisco and New York [05:10:52]. The ability to build from anywhere allows talent to remain in or return to their hometowns [05:28:56].
- Democratization of Tech: This movement leads to a “democratization of tech” across the country, spurring new companies in second and third-tier cities, and even smaller towns [05:43:08].
- Online Relationships: The pandemic normalized and accelerated the trend of building relationships online, showing that investors and founders can connect and collaborate virtually [05:57:00].
Founders from Anywhere
The emergence of the “American Dynamism” thesis, championed by Andreessen Horowitz, highlights companies that support the national interest across various sectors, including education, housing, and infrastructure [00:08:30]. These companies are often built by “atypical founders” who are not necessarily engineers [02:40:02]. They might be former teachers or procurement officers from the Department of Defense, empowered by accessible tools to build companies without needing deep technical infrastructure knowledge [02:51:04].
Catherine Boyle, a General Partner at Andreessen Horowitz, notes that her personal experience reflects this shift, as she now invests from Miami, Florida [01:07:39].
Case Study: Flock Safety
An example of this trend is Flock Safety, a Y Combinator company based in Atlanta [05:57:55]. Founded by Garrett Langley, the company developed small license plate reader cameras to help eliminate crime [05:40:54]. These cameras, initially sold to homeowners’ associations, gained traction by helping solve dangerous crimes and eventually led to police departments across the country contacting them [05:54:03]. This demonstrates how a large company addressing civic needs can be built outside traditional tech hubs [05:55:25].
Case Study: Hadrian
Hadrian, another company in Andreessen Horowitz’s portfolio, is building automated machine shops for aerospace and defense manufacturing in Los Angeles [00:59:08]. The founder, Chris Power, realized the need to build new, automated machine shops from scratch, as existing ones were difficult to modernize [01:00:26]. This company is not only addressing critical manufacturing needs but also upskilling American workers for a new generation of machinists [01:00:38].
Impact on the American Dream
This decentralization fosters a “small business revolution” [01:05:08]. Tools like Substack or Shopify allow individuals to build new types of businesses, leveraging enabling technology [01:05:04]. The availability of capital and the ability to build a company anywhere means more people can participate in the startup revolution [01:05:56].
[!INFO] “Nothing is not a tech business anymore.” [01:06:51]
The decentralization combats the previous concentration of talent in a few hubs, which was detrimental to the rest of the country [01:07:29]. This new trend allows people to “dissociate where they live from where they work” [01:07:57], leading to a more widespread American Dream of building and achieving success [01:12:25]. The ability to build, innovate, and achieve financial success is not a finite resource in this ecosystem [01:05:33].
“People come here and they actually build things and the incentives driving how things are built it’s a system that actually works and encourages growth and encourages creation.” [01:15:16]
This renewed focus on building and creation, especially in sectors that haven’t been deeply touched by software, represents the next phase of innovation, moving beyond the high-margin software-as-a-service (SaaS) businesses that dominated the last decade [01:18:35]. The goal is for every venture capital firm to recognize the “extraordinary opportunity” in this category, transforming it into a standard practice akin to consumer or enterprise investing [01:17:11].