Despite the pandemic-era decentralization of tech, some truths only got stronger—proximity still shapes opportunity, and San Francisco remains a gravity well for venture.
As i dug further into how the whole financing works i realised that they are not really funding Innovation (which is the traditional way) BUT literally creating new industrial ecosystems That becomes unbeatable. The BOE example comes to mind. Before the LCD plants came to being local manufactures (Hisense, Midea & Gree) were mandated to source their panels from BOE. instantly giving the company demand from day 1. Because of this then you have coalesce of new companies wanting to benefit from this. BUT the Govt still mandated BOE to Invest its profits in the Ecosystem research; instantly creating new patents and new firms being born. I think that's why it goes longer and the fact that their money is more patient. you can check it here: https://open.substack.com/pub/chinain5/p/the-death-of-risk-capital-how-hefeis?r=4w27ll&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Hefei City in China is now viewed as the Silicon Valley of China and currently their funds out perform Silicon Valley by 92%
The fact that the Government also acts as a financer helps BUT I wonder how long this will last
I always wonder how much government financing and support lasts before an ecosystem needs to thrive on its own.
As i dug further into how the whole financing works i realised that they are not really funding Innovation (which is the traditional way) BUT literally creating new industrial ecosystems That becomes unbeatable. The BOE example comes to mind. Before the LCD plants came to being local manufactures (Hisense, Midea & Gree) were mandated to source their panels from BOE. instantly giving the company demand from day 1. Because of this then you have coalesce of new companies wanting to benefit from this. BUT the Govt still mandated BOE to Invest its profits in the Ecosystem research; instantly creating new patents and new firms being born. I think that's why it goes longer and the fact that their money is more patient. you can check it here: https://open.substack.com/pub/chinain5/p/the-death-of-risk-capital-how-hefeis?r=4w27ll&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Ok, you’ve convinced me to take another hard look at SF again 😆
or at least travel there a bit more to keep those ties.
Excellent points, Earnest.
The question is, how do you increase the surface area of opportunity and ability to play repeat games?
You don't HAVE to be here, but being in SF helps considerably.
Three reasons why:
1. Silicon Valley startups received 57% of all US venture funding in 2024
2. The concentration of talent that is building in key fields like AI is unparalleled
3. The culture is still way more open and tolerant of failure (not holding winning lottery tickets) than anywhere else.