From Silicon Valley to Subang Jaya

 

As I sit in a popular cafe in Palo Alto, the home of Stanford University and the heart of Silicon Valley, I can’t help but reminisce about all the good memories I have of this scintillating area where I used to work.

But it’s not the Silicon Valley I started my career in anymore; not the Silicon Valley I first fell in love with. The tech upstarts of the past that found their footing here – Apple, Google, Facebook, Twitter, Uber, AirBnB, Tesla and the like – are now behemoths.

The stories of their founders and early employees struggling to make ends meet while working on something that they were passionate about seems but a distant memory of the past. Now they’re the fat cats – the facilitators and often the controllers of our digital lives, and more recently even the self-assigned moral arbiters of truths.

They have immense power and incredibly deep pockets, which they have used in equal measure to provide absolutely fantastic services which we would be hard-pressed to live without, and at the same time, squelch their competition – by either launching a competing product or merely acquiring them.

What used to seem like the resistance at the fringe is now the mainstream. Apple started by demonising IBM, the tech giant of the past. But now, Apple is multiple times larger than IBM ever was.

But where are today’s upstarts? Where is the company that is demonising Apple and is gunning to be an order of magnitude bigger than it? I don’t see it in the valley. No, the valley is decaying. It’s tech dominance stands in stark contrast to the pandemic of homelessness gripping it. It’s a collection of gentrified, expensive, yet crime-ridden neighbourhoods that seem increasingly broken and dysfunctional.

I doubt anyone would be able to name a Silicon Valley startup that has shaken up the tech world in the past five years. They can’t. Because there aren’t any.

Instead, something else is happening. Power is becoming decentralised, specifically the power that tech companies in Silicon Valley yield. This is bad news for Silicon Valley but great news for everyone else.

Power has a tendency to concentrate, according to the Pareto Principle. It’s not a function of “corrupt capitalism” or bad actors, but merely the natural order of things. This is why we need a periodic renewal – an upending of the old by the new. It’ll be a chaotic process but one that needs to happen from time to time to rejuvenate and breathe new life into an ossified system.

This exact thing is happening now. It’s a slow process but it is certainly happening. This process is causing people who would otherwise immediately think of moving to the valley to think of going somewhere else.

We need to get them from Silicon Valley to Subang Jaya. Well, not Subang Jaya per se but to Malaysia. I apologise for the clickbaity title, I just couldn’t pass up the opportunity to alliterate (and to do it in classic Silicon Valley fashion at that – by apologising after the fact, instead of seeking permission earlier).

Here are some ways we can do this, based on my experience in Silicon Valley:

1. Ride the technological wave of the future

Silicon Valley didn’t rely on natural resources or being a port city to grow into the powerhouse it is. It relied on its ability to both create and ride the technological wave of the future.

It did this primarily by realising the power of the internet and developing the software economy that is needed to power it. Literally every Silicon Valley tech giant does this. Even Tesla, the electric carmaker, is a software-focused company, which is why many refer to its cars as smartphones on wheels.

However, one of the reasons I think Silicon Valley will slowly lose prominence over time is because it has largely missed the boat when it comes to one of the two major technological waves of the future – blockchain technology.

However, it did nail the other wave – artificial intelligence – which has led to its continued hegemony in the field.

Malaysia can and should develop both its blockchain technology and artificial intelligence capabilities. To do this, the next step would be crucial.

2. Set up a future-focused university/curriculum

Stanford University and the University of California-Berkeley are the intellectual batteries that power Silicon Valley. They are the best and fourth best US universities when it comes to computer science, respectively.

They have had a decades-long focus on computer science, which has birthed some of the best computer scientists the world has seen, who have gone on to power the innovations coming out of the conveniently proximal Silicon Valley companies.

To emulate this, select Malaysian universities should institute a future-focused curriculum that concentrates on developing and building upon the technologies of the future. This would invariably include both artificial intelligence and blockchain technology.

Very few universities in Malaysia offer degrees in artificial intelligence and a degree in blockchain technology is entirely unheard of. However, if we are to become leaders in these budding industries, it’s about time we started integrating them into our curriculum. Even if we don’t offer complete degrees in them immediately, we should at the very least start with specialisations and gradually build up to offering them as degrees in their own right.

3. Open up access to risk-friendly venture capitalists and angel investors

One of the biggest gripes I’ve heard about the Malaysian startup ecosystem is the lack of venture funding. Money is the lifeblood that sustains entrepreneurs and allows them to take the risks necessary to create potential disruptors. Without a healthy amount of it flowing into the ecosystem, startups will flounder or simply migrate to a more nurturing market.

The highest profile instance of this was, of course, Khazanah’s failure (or maybe refusal) to see Grab’s massive potential and not investing in the promising startup even though Grab had applied to it for funding. Realising the golden opportunity, Singapore’s Temasek swooped in and invested US$10 million (RM41 million) in the startup. The rest, as they say, is history.

This is an area that Silicon Valley reigns supreme in. Its venture capital ecosystem is second to none. Over the many decades of its tech dominance, it has produced many investing giants such as Andreeson Horowitz (A16Z), Kleiner Perkins, Khosla Ventures, Sequoia Capital, Draper, Fisher and Jurvetson.

To make Malaysian venture capital more toothy, two approaches can be taken. One, Malaysian VC firms should set up partnerships with their Silicon Valley counterparts and send their people to get trained in the ways of the best venture capitalists in the world. This knowledge transfer will be pivotal in ensuring we don’t miss the next Grab.

And two, these Silicon Valley venture firms should be invited to set up a regional base in Malaysia. Southeast Asia is quickly becoming a tech powerhouse (just look at the number of tech unicorns in Singapore and Indonesia) and it would be in our best interest to ensure they also nurture local talent here. We should provide them with generous tax breaks and the facilities necessary to ensure that they are successful here.

4. Build technologies that scale

Products and services that originated from Silicon Valley were scalable. They could be used by anyone and from anywhere in the world. They were not limited by geography, local customs or preferences.

An iPhone is just as useful in the US as it is in Zimbabwe. You can google for information in Malaysia just as you can in Nepal. You can use Facebook in the UK just as you can in Uruguay. There are AirBnBs in the Swiss alps just as there are on the beaches of Bali. A Tesla can be driven in Palo Alto, just as it can be driven in Penang.

Similarly, Malaysian startups always need to look at developing products and services that scale globally, or at the very least, regionally. Malaysia is just too small a market with too tiny a population to be able to sustain a disruptive product or service in the long-term. They can and should develop a beachhead here but they need to eventually be able to spread their wings beyond our borders. - FMT

The writer can be contacted at kathirgugan@protonmail.com.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.