How the West Kicked Butt

Rohit Khare (
Fri, 29 Aug 1997 15:30:16 -0400

EXCELLENT series o' articles in the current ASAP:

How the West Kicked Butt

pulling away. Why?

Historians will be correct to record the years 1971 and 1972 as the Great
Westward Shift. That's when it became hardwired that California and the
West would begin to outperform the rest of the United States economically.
A big hint was dropped in late 1971 when Intel ran an ad in Electronic News
announcing the 4004, the world's first microprocessor. George Gilder
rightly claims that the most consequential product in the second half of
the 20th century, ahead of jet aircraft, is the microprocessor.=20

A few months later, two venture capital firms sprouted up in Northern
California to make investments in young companies whose products were based
on the microprocessor. Both were whelped from chips. Don Valentine of
Sequoia Capital had been a sales vice president at Fairchild Semiconductor
in the 1960s. His office was next door to Gordon Moore's. Nearer yet to the
big bang was Eugene Kleiner of Kleiner Perkins (now Kleiner Perkins
Caufield & Byers). He was a Fairchild cofounder.=20

Chips, venture more ingredient remained to light capitalism's
greatest fire=97an infrastructure geared for speed and risk. That, too, was
glimpsed in the early 1970s, albeit on a different playing field. In the
1971 Rose Bowl, Stanford shocked heavily favored Ohio State. Stanford took
risks with the forward pass, fake punts, and the reverse. Woody Hayes's
Buckeyes stayed on the ground. When the clock expired, Stanford had won.=20

The fast-gunning West is still winning. In the following pages we explain
why.=A0 =A0

There is a truly staggering chart about CA's dominance over MA:

Venture Capital's Top Deal Spots =20

1990 =20
Rank State Deals $ Raised=20
1 CA 302 $800M=20
2 MA 78 179=20
3 TX 32 90=20
4 MD 19 46=20
5 WA 16 32=20

1993 =20
Rank State Deals $ Raised=20
1 CA 365 $1,073M=20
2 MA 105 297=20
3 PA 29 81=20
4 CO 19 71=20
5 TX 24 59=20

1996 =20
Rank State Deals $ Raised=20
1 CA 642 $2,877M=20
2 MA 225 797=20
3 WA 45 305=20
4 CO 45 227=20
5 TX 56 221=20

Source: Technologic Partners=20


You'll Hate This Column, but What the Heck

By Rich Karlgaard

HEY THERE, NEW YORKERS! Dying inside your August sauna wools?...Is the
sweat gathering like dew at the small of your back, wetting your $240
Turnbull & Asser shirt?...Are those Super 150s silk-lined trousers of yours
stuck to the cab seat?=20

I am aw-w-w-w-fully sorry, man. Really.=20

But another Eastern city and another sad story. It was past
10:30 one night in Boston when I collapsed onto my hotel bed and phoned
room service. "One large Coke and a hamburger, please, and make it rare,
good fellow."=20

Sorry, said the room service man=97cannot do.=20

Cannot do? It didn't stop there. Next came...The E. Coli Sermon. For five
minutes I got a lecture on the perditions=97perditions!=97of undercooked mea=
This was followed by hymns to the Bay State and to the heroism of its
bureaucrats...wonks throwing themselves on live E. coli bacteria...just to
save me! Could I appreciate that?=20

Snigger all you want. But stories like these count in business reporting.
When one sees a CEO frittering away the shareholders' money on carved wood
paneling, one gets suspicious. An ear for P.R. false notes, an eye for
marketing whim-whams, a nose for executive terror=97these are the tools of a
good reporter.=20

Some night when you find yourself in a Boston hotel room, on the horn with
a fabulous twerp who is lecturing you about E. coli...and not just
that...but about your own pathetic inability to weigh risks and
rewards...all the warning lights in your brain will blast on. I hope. In my
brain they did. I started to worry about Boston. Something bad was
happening here. Nanny-state spirochetes must be fouling the Charles River.
Mind you, a reverence for starched collars in authority has always gone
down like free beer in Boston. Yet, here was a new twist. Hotel flunkies
had become agents of the state.=20

Or is it new? Troll your imagination a bit=97hmmm, maybe not so new. The
collapse of the minicomputer industry...the disappearance of Apollo
Computer...the near death of Wang Laboratories...the paralysis of Lotus
Development...the agonistes of Jim Manzi...the anorexia of Digital
Equipment... the stampede of venture capital to the West. A ton of bad=

True, but can one honestly tie it all to bad hamburger service in a hotel?=

I claim you can. What ties the two together is a spirit (or lack of one)
that trusts (or doesn't) ordinary people to make smart choices. The West
has the spirit. The East doesn't. Curiously, the East had it 221 years ago
when it declared its independence from another nanny state. No longer.=20

The East's retreat into Thou-Shalt-Not-ism seems to be picking up speed as
the West overtakes it economically. Broadcast TV, Congress, the Federal
Reserve, talk shows with flatulent combatants, stock exchanges based on a
physical location, retail giants...these are spent forces in today's
burgeoning cybereconomy. The East isn't dumb. It senses these changes. It
just loathes them! It is beginning to resemble fusty old England in its
postcolonial confusions. Whither the empire, and all that. So its angry
denizens board the shuttle to Washington and lobby fiercely. Stop the world!=

True story: Three years ago, at a private party at New York's public
library on Fifth Avenue and 40th Street, I sat next to a government
lobbyist for AT&T. George Gilder rose to speak about the future of public
libraries in the dawning age of a high-bandwidth Net. The lobbyist listened
to George, scowled, shook her head, took notes. She leaned over to me. She
said: "Gilder doesn't get it. America is not ready for all this bandwidth."=

Darn that Steve Forbes. He won't let his employees short stocks. Too bad.
That night in New York, the lobbyist from AT&T uttered the clearest short
signal you will ever hear. She said America was not ready for high
bandwidth. What she meant, of course, was that AT&T itself was not ready to
deliver high bandwidth to Americans. So the phone giant would do what it
had to do: buy time. Lobby government to slow things down. Take the low anything to cripple those fast-gunning entrepreneurs who had the
audacity to think that ordinary Americans might actually want
high-bandwidth connections.=20

By the way, the short signal was dead accurate. AT&T has wobbled and sunk
during a bull run.=20

DRAMs, EPROMs, EEPROMs, microprocessors, personal computers, GUIs,
PostScript, desktop publishing, desktop video, hubs, bridges, routers,
Ethernet, Ethernet switches, Web browsers, Java, ActiveX, push...from these
technologies I count a trillion dollars or two in recently minted market
cap. None of it originated from east of the Rockies. Where were you,
fellas? Hello?=20

Hint: Liberate your entrepreneurs, trust your customers, and then get out
of the way.=A0 =A0=20


Resilience vs. Anticipation

By Virginia I. Postrel

The West is resilient and can roll with the shocks. The East copes through
anticipation, the static planning that assumes perfect foresight.

Everybody has theories about what makes Silicon Valley special, and most of
the theories are right: It's the density, the competition, the constant
chatter about business plans over tables at Il Fornaio in Palo Alto. It's
the universities, Stanford and Berkeley, world-class research institutions
that nonetheless nurture the practical. It's the money, the greatest
concentration of venture capital the world has ever seen. It's the
diversity, the immigrants from everywhere, the best and most brilliant
spilling out of Oracle's food pavilions to eat burgers, curry, and sushi in
the California sun.=20
The California sun.=20

Eventually, all the theories wind up there, at the one thing that makes
Silicon Valley unlike Boston, or Austin, or Seattle, the one thing they can
never hope to copy: It's the weather.=20

The weather in the valley is perfect. Not temperate, not tolerable, not
good. Perfect. Month after month after month of sunny days, with just
enough breeze and humidity to keep your skin happy. Prelapsarian weather,
the stuff of utopian dreams.=20

People from elsewhere think Californians are crazy=97or terminally
superficial=97to go on and on about the weather. That's because it has to be
lived to be believed, or appreciated.=20

Zero-point-zero inches, read the four-month rain report in the local paper
when Bart Kalkstein moved to the valley from Philadelphia in 1995. Before
then he'd never understood why his Princeton roommates, Bay Area natives,
wouldn't shut up about the weather. "When they told me it doesn't rain," he
says, "I had thought it doesn't rain that often=97you probably only get a
couple of nights here and there a week. But, literally, it doesn't rain."
Now product director of Sterling Software's desktop integration division,
Kalkstein, 27, grew up in Massachusetts. He never imagined such a thing.
"The weather is by far the most important" influence on local culture, he
says, the key to its energy and a magnet for youth.=20

I believe him. In 1986 I came to California from Boston, a city that
proclaims itself "the Hub of the universe" yet seems eternally hunkered
down, hemmed in by clouds, darkness, and narrow streets. Recalling
elementary school history lessons as I trudged to work against a below-zero
windchill, I used to wonder how any Pilgrims survived that first winter. I
was sick half the time, and sleepy the rest. California made me happy,
well, and energetic. I could work twice as hard with half the effort. If
you want to know why the valley has supplanted Boston=97which also has
brains, money, and a proud technological and business heritage=97as the Hub
of the high tech universe, you can't ignore the weather.=20

"There's nothing more depressing than being in East Cambridge on a rainy,
cold spring day, looking out at the river and having the wind blowing. It's
just generally nasty. It doesn't inspire you," recalls Tom Henry, now
president and CEO of, an Internet provider of financial-market
information based in Mountain View, California. "Out here, the sky's
crystal clear. It makes a huge difference. No matter how bad your day is,
if you look out the window and it's sunny, it's pretty hard to stay down
for too long."=20

Silicon Valley's perfect weather means you don't need backup plans, just in
case it rains. It means you don't resent spending a beautiful day inside at
work, because tomorrow and tomorrow and tomorrow will be just as gorgeous.
It means you have more energy, sapped neither by sleep-inducing clouds nor
enervating heat and humidity. It means fewer days dragging into the office
with a brain dulled by allergies and winter colds. It means you have more

BUT AGAINST THE BEAUTIFUL BLUE SKIES of the valley sprawl its tawny hills,
their curves clearly visible beneath a bare wisp of foliage. In the dry
landscape of the West, the earth is not camouflaged by trees and vines and
underbrush. In the valley, the ground itself is omnipresent.=20

And, as everyone knows, it is also unstable.=20

On October 1, 1987, as I was about to step into my morning shower, my
apartment began to shake=97just as it had once shaken when the Boston T went
by, rising on aboveground tracks to cross the Charles River. But this
apartment was in West Los Angeles, where, I realized in an adrenaline
spurt, there is no train. The shaking clocked in at a magnitude 5.9.=20

Two years later, while Bay Area residents eagerly awaited the beginning of
a World Series game between the Oakland A's and the San Francisco Giants,
the earth beneath them convulsed in a 7.1 quake. The Oakland-San Francisco
Bay Bridge buckled, sending a 50-foot top span crashing through the level
below. A mile-long, double-deck section of Interstate 880 collapsed,
crushing more than 100 vehicles and killing 42 people.=20

Every year on Yom Kippur, Jews recall the people of an ancient, unstable
region of the Middle East, for whom it was prayed that "their houses not
become their graves." The prayer occurs in a relatively obscure part of the
service, a section many people skip. But in California, they pay attention.
To live in earthquake country is to know, way back in the back of your
mind, that your house, your car, your office could=97at any moment=97become
your grave. All your worldly goods could crumble in an instant. That, too,
makes Silicon Valley special.=20

"My wife and I honeymooned in San Francisco," says Art Hutchinson, a
technology-management consultant with Northeast Consulting Resources in
Boston. "We'd love to live there=97except for earthquakes. We're willing to
put up with months and months of regular pain, sort of do our penance in
the dark and cold, shoveling snow on April 1 in a freak blizzard. But the
risk of one great whomp and you're flattened on the 880? No....That feels
very parallel to the risk profile that people think about in business. If
you're willing to move there, you've already accepted a certain subliminal
level of risk."=20

Boston's winter is a natural disaster, but its predictability changes
everything. As Hutchinson suggests, New Englanders know winter is coming.
Bad weather is annoying but easy to plan for: You build snow days into the
school year, buy a car with four-wheel drive, get used to scraping ice and
shoveling snow. You make sure you have a coat, hat, and gloves. Snow, says
Hutchinson, is no big deal: "You just put on boots." Life has a regular

Good weather plus earthquakes creates an utterly different environment. On
a day-to-day basis, you can concentrate on your goals, with no need for
contingency plans. Your softball game, your picnic, your wedding won't be
rained out. But everything could change in an instant. You can't anticipate
earthquakes, can't plan for them, can't even predict when and where they'll
strike. Instead of providing the certainty of seasons, nature promises a
future of random shocks. All you can do is develop general coping skills
and resources. There is nothing familiar about the aftermath of an
earthquake, and no one survives it alone.=20

IN HIS 1988 BOOK, SEARCHING FOR SAFETY, the late UC-Berkeley political
scientist Aaron Wildavsky laid out two alternatives for dealing with risk:
anticipation, the static planning that aspires to perfect foresight, and
resilience, the dynamic response that relies on having many margins of
adjustment: "Anticipation is a mode of control by a central mind; efforts
are made to predict and prevent potential dangers before damage is done.
Forbidding the sale of certain medical drugs is an anticipatory measure.
Resilience is the capacity to cope with unanticipated dangers after they
have become manifest, learning to bounce back. An innovative biomedical
industry that creates new drugs for new diseases is a resilient
device....Anticipation seeks to preserve stability: the less fluctuation,
the better. Resilience accommodates variability; one may not do so well in
good times but learn to persist in the bad."=20

Here, then, is the basic difference between the valley and the Hub: Viewing
the world as predictable and itself as the center of the universe, Boston
has encouraged strategies of anticipation. People try to imagine everything
that might go wrong and fix it in advance. But in Silicon Valley, there are
no certainties. The future is open and subject to upheaval. Resilience is
the strategy of choice. People do the best they can at the moment, deal
with problems as they arise, and develop networks to help them out.=20

The positive side of anticipation is that it encourages imagination and
deep thought, the stuff of intellectual life. And it is good at eliminating
known risks. It can build confidence, appropriate in a city whose leading
business manages the life savings of America's middle class. "Just look at
the name: Fidelity," says Hutchinson. "Rock solid, New England." Building
Fidelity Investments meant not just hiring good fund managers but getting
customers to trust impersonal computers, phones, and customer-service
systems as they'd once trusted the neighborhood banker. Anticipation makes
such systems reliable.=20

But anticipation doesn't work when the world changes rapidly, and in
unexpected ways. It encourages two types of error: hubristic central
planning and overcaution. To find the former, there is no better source
than old copies of the Harvard Business Review, where industrial policy
gurus once plied their trade. "Most experts believe that without deep
changes in both industry behavior and government policy, U.S.
microelectronics will be reduced to permanent, decisive inferiority within
ten years," wrote Massachusetts Institute of Technology's Charles H.
Ferguson in a famous 1988 article. Who were the experts? "A wide number of
university researchers and senior personnel of my acquaintance in the U.S.
Defense Department, the CIA, the National Security Agency, the National
Science Foundation, and most major U.S. semiconductor, computer, and
electronic capital equipment producers. My conclusion, after meetings with
groups in the U.S. Defense Science Board, the White House Science Council,
and others, is that only economists moved by the invisible hand have failed
to apprehend the problem." Ferguson and his mandarin contacts anticipated
disaster and demanded industrial policy because their imaginations failed
them. They didn't envision an industry driven not by DRAM making but by
microprocessors, software, and networks.=20

To anticipate is to worry: Mandarins worry and propose dramatic plans to
fight their fears. Regular businessfolks worry and fail to act. Consider
the eternal bug fight. Anticipation says you should try to get all the bugs
out of a product before launching it: zero tolerance for error. When's Tom Henry talks to his old colleagues at BayBanks in Boston
(now merged to form BankBoston), he can hardly believe what they tell him:
"They're still trying to get out home banking=97and this is 15 years later.
Holy smokes! In what other business could you wait 15 years to get a
service out?" But no one wants to make a mistake.=20

Kimbo Mundy, now president and CEO of Bidder's Edge, a Wellesley,
Massachusetts, startup developing a Web-based venue to provide information,
tools, services, and contacts to the online auction market, spent 121/2
years at Interleaf, first in Cambridge, then in Waltham. He is proud of the
work he and his colleagues did there, solving difficult programming
problems. His intellectual side considers the Silicon Valley approach to
software superficial. But, from a practical point of view, it makes sense.
"Being a little bit more superficial, slapping something out there just to
get it done and be able to make noise about it is actually the way you
should develop software," he says. "The hardest thing is to just get the
customers' attention in the first place. Once you get their attention=97as
long as you haven't pissed them off=97you can then do release after release
and, like Microsoft, by the time you get to release 3, you actually have a

Indeed, trying to identify and anticipate every bug=97and to make the
programming as elegant as possible=97undercut Interleaf's technical
achievement by limiting its market. "We had a product that was the best
electronic publishing product that could be had in the mid-'80s," recalls
Mundy. "It did things that the intellectuals of the time, like Brian Reid
who did Scribe [a text editing system] at [Carnegie Mellon University],
said couldn't be done. We were a WYSIWYG system with all sorts of fancy
formatting. And we sat on that product for a year cranking bugs out of
it....That was right about the time that Frame Technology came out and
started to eat our lunch."=20

news and research from a bunch of different partners and delivers it
through still others, as well as through its own site. For its part, provides one-stop shopping and a software-based editorial filter,
organizing and selecting content with the habits of "serious investors" in

"Our vision is you build a fabric of partnerships and it's a lot more
resilient to changes in the business," says Henry. "On the East Coast,
there's still the perception=97the dying perception=97that, 'Well, we can do=
all on our own. We'll just keep adding the people and we'll develop those
core competencies.'" A web of partners provides more "sources of field
intelligence" to spot changes in the marketplace. Partners from different
industry backgrounds and corporate cultures offer a diversity of
perspectives and ideas for responding to new situations. It's also far less
painful to drop a failing partner than deal with a floundering division.
For new brands like, partnerships also offer a way to build
credibility quickly.=20

When exactly partnerships make for resilient companies is a deep question,
one that goes to a very basic puzzle for economists: Why are there firms?
Why doesn't Tom Henry just operate and contract for everything?
Clearly some integration is useful, and under some circumstances it may
even make for corporate resilience. A century ago, meatpacking innovators
Swift and Armour used vertical integration to build the resilience to face
uncertainties of weather, animal sickness, transportation breakdowns, and
other shocks.=20

There's no question, however, that over the past few decades Silicon
Valley's open systems have proved more resilient than the old proprietary
boxes. Venture capitalist Paul Koontz of Foundation Capital in Menlo Park
points to Sun as the model: It started with off-the-shelf components and a
public domain operating system, and it developed networking standards that
allowed computers from many different manufacturers to swap files. "What a
wild concept in the computer business back in the early days," says Koontz.
But, he notes, "it was very comfortable for companies out here to think
that way."=20

The contrast between Sun and Apollo Computer, its onetime rival in the
workstation market, comes up again and again in these discussions. Apollo,
which was based in Chelmsford, Massachusetts, built a traditional
proprietary system and an equally traditional corporate culture. In a 1987
Wall Street Journal feature, Apollo chairman Thomas Vanderslice dismissed
Sun's playful atmosphere with a contemptuous clich=E9: "In this country,
everything loose rolls to the West Coast."=20

While Sun was slashing prices and going after every market that would have
it, Apollo took a more cautious approach. "I'd like to consider ourselves
good businessmen," Apollo president Roland Pampel told High Technology
Business in 1987. "If we're going to go into a market, I'd hope that we
would know how we're going to support it." Such careful anticipation had
already made Apollo vulnerable to shocks, however: A 1984 slowdown in the
semiconductor business, its base market, sent it scrambling to develop new
customers=97at the very time Sun was making inroads with its cheaper,
Unix-based machines. Eventually, Apollo, too, had to cut prices and adopt
Unix. But it still wound up in a downward spiral and was eventually
acquired by Hewlett-Packard. In a rapidly changing technology environment,
Apollo was never able to turn its desired "image of solid, long-term
reliability," as the Journal summarized its 1987 strategy, into something
for which customers would pay a premium.=20

Sun's initial strategy of off-the-shelf components, by contrast, allowed it
to quickly incorporate technical advances, rapidly improving its
price/performance ratio in its early days. And, echoing Wildavsky's notion
that resilience "accommodates variability; one may not do so well in good
times but learn to persist in the bad," CEO Scott McNealy emphasizes that
the company's use of open interfaces gives other companies a stake in its
success. Sun foregoes a chance to control the whole market=97the ultimate
goal of a strategy of anticipation=97in exchange for spreading the risk and,
of course, the reward.=20

Resilience, however, is less a guarantee of corporate success than it is a
way of reducing the risk for individual careers and the regional economy. A
strategy of resilience means not that companies won't fail but that
resources=97including human resources=97are more likely to move to better us=
more quickly, with less trauma. Indeed, the willingness to abandon losing
projects is fundamental. The idea is to adjust quickly, on a small scale,
rather than all at once: to be like grass bending before the wind, then
springing back, rather than a solid oak that comes crashing down in a
storm. In a resilient economy, employees have choices, and they move around.=

JOB-HOPPING IS INEVITABLY what Easterners single out as Silicon Valley's
most distinctive cultural trait. Employees there, notes Foundation
Capital's Koontz, offer companies "transient loyalty": "When people are
engaged with a company, they are passionately committed to it=97as opposed t=
obligingly committed, as one might have been in a 30-year career at IBM."
Inspired, they put their lives on hold and focus all their energies on
their work. "Having said that," Koontz cautions, "people have demonstrated
an ability to magically lose that loyalty on very short notice and go and
rev up an equally passionate commitment to somebody else." For the valley's
mobile professionals, employment is another partnership in a resilient
network of relationships. It isn't a lifetime commitment on either side.=20

The valley of perfect skies and unstable ground does not inspire thoughts
of permanence. Blending intense ambition and constant upheaval, it has
created a carpe diem culture of transitory greatness: You achieve today
because everything could change tomorrow. Boston is also a stimulating
intellectual environment and still produces a steady stream of startups.
But the regional culture of anticipation means technologists and
entrepreneurs must struggle between its two extremes: too much control and
too little closure. Hutchinson, the Boston technology-management
consultant, draws the contrast between the hierarchy of Harvard=97"a pecking
order with a capital P"=97and the openness of high tech ventures, such as
Digital Equipment, that sprang from the MIT culture. That culture, he
notes, is to say, "Everybody's interesting. Every thing is interesting.
Every possibility is interesting. Let's discuss things. Let's have more
conversations. Let's debate stuff. Because it's just interesting. Oh, we
need to turn out a product. Gosh." That pure, impractical culture of
visionary play may generate wonderful ideas, but someone else must turn
them into realities.=20

Kimbo Mundy of Bidder's Edge illustrates the difference between the coasts
with two technological heroes: Tim Berners-Lee, now at MIT, who invented
the underlying structures of the World Wide Web, and Marc Andreessen, now
in Silicon Valley, who created the good-enough integration of text and
graphics that made it take off. Each migrated to the appropriate cultural
milieu. "On the East Coast," says Mundy, "it's the building of the thing
that's most important. And on the West Coast, the sharing of it is
relatively more important. Getting things out to the light of day seems
more important there."=20

Once they hit the light, no one can anticipate just where innovations will
lead=97or whether they will in fact succeed. It is by trusting the search,
permitting experiments whose results no one can know, that we allow
advances to occur. In a 1979 paper, Wildavsky prefigured his discussion of
anticipation and resilience with a meditation on the sources of progress.
It depends, he suggested, on spontaneity and serendipity, on discoveries no
one can predict or foresee: "Incessant search by many minds...produces more
(and more valuable) knowledge than the attempt to program the paths to
discovery by a single one....Not only markets rely on spontaneity; science
and democracy do as well....Looking back over past performance, adherents
of free science, politics, and markets argue that on average their results
are better than alternatives, but they cannot say what these will be....The
strength of spontaneity, its ability to seek out serendipity, is also its
shortcoming=97exactly what it will do, as well as precisely how it will do
it, cannot be specified in advance."=20

Nowadays it seems that every place wants to be like Silicon Valley=97to
discover its secrets and copy them. Here, then, is a secret that can be
copied, even in places with lousy weather and stable ground: Don't ask for
answers in advance. Don't try to create a life without surprises. Trust
serendipity.=A0 =A0=20

Virginia I. Postrel ( is the editor of Reason. She is
writing a book, The Future and Its Enemies, to be published by The Free
Press. Her previous Forbes ASAP columns are available on Reason's Web site


The answer is obvious to anyone who has ever lived in New York,
particularly Manhattan Island. Life in New York is a formidable mix of
sheer drudgery, mortal combat, small victories, serious disasters, stress,
mess, duress, constant strategizing, artful dodging, shucking and jiving,
running late, running scared, gearing up, screwing up, scheduling and
rescheduling, noise, crowds, and on occasions, fire and brimstone. Living
in New York, in other words, is hard work, about 20 hours a day (if you
count the police, ambulance, and fire sirens, street scuffles, and car
alarms that play hell with a night's sleep). Some part of a day is official
work, but everything else is work, too.=20

Even New York's great pleasures are work: getting dinner reservations or
theater tickets, fighting the crowds for a little viewing space at the art
museums, even taking a quiet stroll in Central Park (watch that kamikaze
rollerblader!). I can remember forsaking a summer weekend at my house on
Long Island=97when the bluefish were running=97because just thinking about t=
traffic on the Long Island Expressway exhausted me. New Yorkers compete for
everything, from a cup of coffee to top spot after a corporate coup d'=E9tat=
As a result, they're usually tired to one degree or another, and they
assume (so as not to be too deeply depressed) that it's because they work
so hard.=20

Meanwhile, out in lotusland, Californians live a life that is almost
criminally easy. Leaving out such dramatic events as floods, fires,
earthquakes and riots, and chronic annoyances such as traffic jams, the
days pass by in sunny splendor. I live in the middle of a major city, yet I
row on an almost empty lake every morning, walk my dogs through a beautiful
ravine in the evening, and ride a motorcycle all year long. I don't have a
house in the country because I don't need one; escape isn't critical when
there's nothing to escape from.=20

Competition for bits and pieces of the good life is not so intense here, so
stress is low. The downside is that Californians are irony-deprived, hence
not as funny as New Yorkers. But the upside is that life does not exact
such a toll. When I came to the West Coast, I discovered I'd won back the
energy used to maintain the 2-inch impenetrable force field New Yorkers
need to hold the maddening crowd at bay. This energy, and the energy
produced by relaxation and pleasure, can be put into work. (Leaving behind
the dozen colds picked up during winter rides on the downtown IRT hasn't
been a bad thing, either.) When I'm on the phone to people in the East, I
make sure to sound edgy and tired, lest my general good mood cause them to
regret hearing from me.=20

Like most New Yorkers, I loved the city, even when it was reducing me to a
tapped-out type-A personality. The fact that New York dished out constant
punishment actually made me proud to be a survivor; I couldn't believe that
anyone who didn't overcome daily drubbings could judge himself worthy=97the
"if you can make it here, you can make it anywhere" rationale. Though I
thought I was some kind of lean, mean working machine in Manhattan, I
actually get more done in California. So do thousands and thousands of
others. Just check the numbers. =A0 =A0=20

Owen Edwards is a contributing editor for Forbes ASAP and a contributing
writer for GQ. He was executive editor of American Photographer, managing
editor of Cosmopolitan, and founding editor of Parenting.


What MIT Learned from Stanford

By Eric W. Pfeiffer

IN 1986, JERRY YANG made the short trip from his home in San Jose,
California, to Stanford University where he was enrolled as an
undergraduate. At first he thought he might study liberal arts. "I had
fantasized about becoming a history or econ major," he says. Yang, however,
quickly became caught in the "entrepreneurial lore" of the place, a place
where electrical engineers are almost expected to go on and start their own
companies. By the 1990s, liberal arts was long gone, and Yang had founded
Yahoo, the successful Internet directory.=20
Yang and Yahoo's ties to Stanford are not unusual. In fact, it is almost
impossible to name a leading-edge company in Silicon Valley that isn't
closely associated with Stanford: $4.1 billion Cisco Systems, $2.9 billion
Silicon Graphics, and $7.1 billion Sun Microsystems were all started by
Stanford professors or administrators. Such new kids on the block as
Netscape Communications and Rambus also have close ties to the university.=

To draw up a similar list of companies that have come from the hallowed
halls of the East's best engineering school, Massachusetts Institute of
Technology, is not possible. (A 1996 study from BankBoston tried to do just
this by linking such powerhouses as HP and Intel to the school. By all
accounts, however, these companies have much closer ties to Stanford.)=20

MIT's runner-up role in promoting entrepreneurship was never supposed to
be. In 1861 William Barton Rogers founded MIT as a place to "respect the
dignity of useful work." Early on it had close ties to industrialists such
as Thomas Edison and Alexander Graham Bell. Long before Stanford became a
player, MIT had an established track record of turning research into
practical applications. Even MIT Professor Vannevar Bush, founder of what
became Raytheon, taught the father of Silicon Valley, Fred Terman, how and
why to establish close ties to industry.=20

MIT's and Stanford's different attitudes toward entrepreneurism can be
traced to Terman, an MIT graduate himself. When Terman became an electrical
engineering professor at Stanford in the 1920s, he almost immediately set
about blowing open the doors to the ivory tower. He had to=97his engineering
graduates needed local jobs, and that meant attracting companies to the=

Terman was the one who introduced the key founders of Varian Associates,
now a $1.6 billion company, which did groundbreaking work in radar and
microwave technology. Terman also brought two of his students together,
William Hewlett and David Packard, who later started HP in a Palo Alto
garage. Terman even encouraged William Shockley, co-inventor of the
transistor, to come to Palo Alto. (He joined Stanford's faculty in 1963.)
Without a Terman, MIT remained supportive of entrepreneurship, but did
little to actively foster it.=20

Stanford, on the other hand, did. It created a licensing office that was a
marketer, not just a straight patent office. The office actively pursued
discoveries, then marketed them to interested companies and collected
royalties. MIT liked what it saw and wanted to change. "We were doing
licensing very, very badly," says Lita Nelsen, director of MIT's technology
licensing office. The office borrowed Niels Reimers, the brains behind the
marketing model at Stanford, while he was on a year sabbatical. The result?
Twenty million dollars in royalties last year, but still a far cry from
Stanford's $43 million.=20

Likewise MIT's Sloan Business School is taking a lesson from Stanford's
business school, which has long offered classes and programs on
entrepreneurship. "I was tired of telling graduates interested in
entrepreneurism we didn't have anything for them," says MIT business
professor Edward Roberts, who started the Entrepreneurship Center at the
Sloan School in 1994.=20

Such institutional changes, says MIT's Lita Nelsen, quickly multiply. "You
can see a culture change," she says. =A0 =A0

Rohit Khare /// MCI Internet Architecture (BOS) ///
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