The Silicon Valley Caravan: What Sets the Tech Upstarts Apart?

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Recently, Boston College professors Gerald C. Kane and John Gallaugher toured San Francisco Bay Area technology companies. They visited a total of twenty-four companies, ranging from large, established technology giants to late-stage and mid-stage startups to various venture capital financed companies.

Kane had taken part in the same tour four years earlier, while Gallaugher does this trip roughly twice a year.  Kane, was amazed by how much things keep changing in Silicon Valley, especially when compared to the rate of change at most established companies.  As the authors wrote “If you visited most traditional businesses four years ago, they would likely be fairly recognizable when you returned today.  In contrast, the Silicon Valley environment is noticeably different.  This relative pace of change between West Coast tech companies and more traditional ones suggests a potentially ever-widening gap between digitally driven companies and the rest.”

So, what’s different from four years ago?

One notable shift was in the maturation and expansion of the current digital giants. In 2013, Facebook’s dominance was open to question — profits were down, and mobile revenue was nearly nonexistent.  Today, Facebook’s revenues are up over 500 percent, with the bulk of them coming from mobile.  The “move fast and break things” company has matured to “move fast with stable infrastructure.”  And Google isn’t even “Google” anymore — it’s Alphabet, a company with a fast-growing cloud business, moonshot innovation from self-driving cars to life science, and a company-defining focus shift that pins its future to leadership in AI and machine learning.

Smaller companies were also notably different.  Many have adapted their business model significantly as the technological environment evolves. For example, mobile payments company Square Inc. has moved beyond credit card processing to provide an entire suite of small business tools.  Likewise, WePay Inc. has shifted from a group payments model to a B2B, marketplace-focused model that helps platforms such as GoFundMe and Care.com process payments.  Even companies that Kane had written off as dead, such as gaming company Zynga Inc., are...

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