Silicon Valley started 75 years ago when Bill Hewlett and Dave Packard built an audio oscillator in a garage in Palo Alto. Since that time, the central California region has grown into the tech capital of the world, but according to 650 Labs’ Mark Zawacki, there has been a shift. Now that technology has become an integral part of nearly every single industry, Silicon Valley is now the “industry disruption capital of the world.”
Zawacki has noticed this shift since the ’90s boom. “It’s been selling the world the technology stack,” says Zawacki. “An example of that is Larry Ellison. He is effectively an arms merchant. He sells every bank in the world the same stack. Go into any airport in the world, and there is a big red-and-white ad that says Oracle runs on 49 of the world’s 50 largest banks. But the idea that Silicon Valley is the high tech capital of the world is both a dangerous and a dated mindset.”
Zawacki says that Silicon Valley has moved into its next phase. “What we think has happened is that software is seeping into all these industries, and it has shifted from the high tech capital, to the industry-disruption capital of the world.” It’s no longer just an enclave of software and hardware companies; Silicon Valley is now home to dozens of industries that have second homes in central California, to integrate the region’s innovation and new technology into every aspect of their businesses.
If Silicon Valley at one time functioned as simply an “arms merchant,” selling software and hardware to the world, today it functions more on the mercenary level. In keeping with the military analogy, Zawacki explains the difference. While the arms merchant simply provides tools, the mercenary builds a professional elite army, incents it to win, equips them professionally and puts them on a battlefield, where the mission is to take land – or in this case, market share. “An example is iTunes,” relates Zawacki. “When Apple created iTunes, it didn’t go to EMI Music and ask them to license their database. That’s the old Larry Ellison model. Instead, it put iTunes on the battlefield, and changed the shape of the music industry single-handedly.”
High tech is no longer just a separate industry, separate from manufacturing, retail, healthcare and every other industry in the world. It has become an enabler, and that is the heart of Zawacki’s argument: The information layer in every single industry is getting thicker over time.
To help companies across all industries make better use of that information layer, Zawacki’s 650 Labs has launched a “Pop-up Innovation Lab,” a two- to eight-week “disruptive innovation boot camp” located in the heart of Silicon Valley. With this program, 650 Labs will help multinationals from all over the world tap into that special type of innovation for which Silicon Valley is best known.
Every industry needs to have a foot in the technology world, and today even the most labor-intensive manufacturer is technology-driven. And while many are establishing permanent offices in the region, 650 Labs’ Pop-up Innovation Lab gives those companies that don’t have a physical presence an inside look into what really makes Silicon Valley so innovative. A major tech ecosystem has been brewing there since 1939, and Zawacki notes that the “network effect and scale” is what makes this region so important. “It’s a corollary to Metcalfe’s Law, where each new node you add to the network, adds value. Each new company that sets up here, by default, is not setting up somewhere else. So with every single automotive manufacturer that now has a presence in Silicon Valley, that’s not a physical presence in another location. We have ten industry clusters that have formed here, and some are large and viable.”
The Pop-Up Innovation Lab is more than a field trip. “We’re telling the teams, don’t come here to sightsee and be awestruck and amazed. Come here to work on a real business problem with executive or board-level visibility. This is reserved for ambitious companies that want to crack the code on a meaningful problem, and get a new perspective that they wouldn’t be getting working on it from headquarters.”