Back From Silicon Valley 3

The original Chinese version of this article was first published on November 3, 2014. You can find it here.

Silicon Valley is more than just a place; it's a global epicenter of innovation, a name synonymous with ambition and progress. For entrepreneurs worldwide, it embodies the "Silicon Valley Dream"—a beacon of possibility. Each journey to the Valley offers a unique lens through which to observe the fascinating distinctions between Chinese and American cultures, particularly within their respective innovation ecosystems. It has become a cherished personal tradition for me to use the long hours of the return flight to meticulously reflect on the insights and experiences gained, then eagerly share them. With that same passion, I'm thrilled to present "Back from Silicon Valley 3."

1: The Power of Data-Driven Thinking

Upon arriving in San Francisco, our first stop was LinkedIn, the world’s largest professional networking platform, boasting an impressive 350 million users. Our goal was to delve into their big data strategies. What immediately stood out was LinkedIn's foresight: since its inception around 2003, it had a clear vision for a data-driven business and revenue model. By 2010, the platform began offering tailored services to businesses, which quickly led to a significant surge in revenue.

Currently, LinkedIn's diverse income streams include:

• 20% from premium subscriptions for individual users.
• 20% from marketing solutions for businesses.
• A substantial 60% from talent solutions for companies, contributing to an overall revenue of around $2 billion.
• Additionally, a nascent enterprise sales solution has started contributing 1%, with promising prospects for growth.

While a signed NDA prevents me from disclosing specific business details (and detailed articles are available online for those interested), the overarching story here is about the profound impact of data-driven thinking.

LinkedIn's platform is a treasure trove of professional profiles, frequently updated with job changes. This rich dataset allows for the tracking of the latest talent movements across companies. We met with Simon Zhang, the head of LinkedIn’s data department, a truly remarkable individual. Simon was once a neurosurgeon in China before a passion for computers led him to switch careers—a true embodiment of the "You Only Live Once" (YOLO) spirit.

LinkedIn effectively monitors talent migration within Silicon Valley. This naturally leads to a compelling question: Can you accurately gauge a company’s value based solely on its talent inflow and outflow? Simon tackled this by developing a program that calculates companies’ weighted scores within LinkedIn’s system. By combining public market data with individual profiles’ work and educational backgrounds, he derived a "talent weighted score." Analyzing talent movement over time, his method could infer the "potential market value" of various hot tech companies, predictions that were later validated by the market. This innovative approach even accurately predicted the overvaluation of Groupon’s market worth.

In stark contrast to the often diverse and sometimes vague discussions around “big data” in China, Silicon Valley teams like LinkedIn’s demonstrate a much more pragmatic and results-oriented approach. They’ve been quietly working with big data for years, optimizing processes and profiting from their insights without making a fuss. This quiet dedication is an admirable showcase of professionalism and practicality.

2: The Intense Talent Wars of Silicon Valley

My trip included a visit to Dropbox, a standout alumnus of Y Combinator. Naturally, I couldn't miss sampling what's reputed to be San Francisco’s best free lunch—their company cafeteria, which resembles a trendy restaurant with a vibe that suggests long waits. The chef, with an incredible ambition, has even claimed the menu won’t repeat for an entire year! When a colleague, curious about a pasta dish, asked for a review, a Dropbox employee casually responded, "Haven’t tried it before, I’ll find out soon :-)." This encapsulates the laid-back yet high-energy atmosphere.

Our host at Dropbox revealed that many employees previously honed their skills at tech giants like Facebook and Google, with internal referrals playing a crucial role in new hires. A fascinating trend emerges: once a former Facebook employee joins, more tend to follow, creating a powerful network effect.

Naturally, I was curious about the startup incentive schemes prevalent in the Valley. Gaining entry into companies like Facebook, Uber, and Dropbox is notoriously difficult, demanding rigorous exams and assessments. However, the rewards for those who succeed are undeniably alluring.

Consider Facebook’s compensation for new graduates:

• Annual salaries can reach $100,000 to $110,000.
• Exceptional candidates can negotiate a sizable "signing bonus," typically paid out after a year.
• They also receive end-of-year bonuses and stock options.
• Joining graduates could receive stock options valued at approximately $300,000 over four years.

Dropbox, valued at $10 billion at the time, had transitioned from offering stock options to restricted stock units (RSUs). RSUs are often seen as more beneficial because they represent actual shares that vest over time, without the need for an "exercise price." In contrast, stock options require employees to buy shares at a set price, carrying a risk if the company doesn't go public or its valuation falters.

Despite Uber’s staggering valuation of $18 billion, it still offered options, not RSUs, a difference that reportedly led some top engineers to choose Dropbox over Uber. This highlights the nuanced, high-stakes nature of the talent war in Silicon Valley.

LinkedIn's data on talent movement not only suggests a company’s potential market value but also becomes a powerful tool. Startups actively use this information to signal to top engineers and talent, “Join us to be part of the next big thing.” Thus, talent, ever in pursuit of the next challenge and opportunity, flows from yesterday’s established players to tomorrow’s aspiring empires.

This dynamic was underscored when an engineer colleague decided to leave Dropbox for Google, swayed by an irresistible offer. It serves as a potent reminder that for these tech giants, the fight for top talent is a worthy investment. For entrepreneurs, it reaffirms a fundamental truth: talent is the cornerstone of success.

3: The Unwritten Rules: Don’t Copy Me

During a visit to Qihoo 360’s new office in Silicon Valley, I noticed a subtle but impactful detail in the restroom: many places require a key marked “Do not duplicate.” I pondered the effectiveness of such a sign. A friend explained that most people, upon seeing the sign, wouldn't attempt to copy the key. Furthermore, even if someone tried, a locksmith would likely refuse to duplicate it due to their established policy. This creates a positive feedback loop: rule-breakers don’t succeed, and eventually, they cease attempting to circumvent the rules.

This anecdote, simple as it may seem, perfectly exemplifies the American spirit of honoring agreements and the inherent trust built into the system.

It made me reflect on life sciences and social behavior studies. Just as cellular replication ensures the continuation of life, lower animals utilize “imitation” for the transmission of skills and social roles. Imitation is an innate animal instinct, a fundamental mechanism for learning and survival.

Ideally, we hope that good social behaviors are imitated and propagated. However, the reality is that negative behaviors can spread just as quickly. Consider the chaotic boarding of a bus. If you grew up in a society where orderly queues are the norm, you might initially feel frustrated and eventually be forced to adapt to chaotic boarding behaviors if you find yourself in a place where queues are consistently ignored. This is a classic example of the "broken windows theory" in economics and sociology, where signs of minor disorder can encourage more serious antisocial behavior.

Conversely, someone accustomed to chaotic boarding might quickly adopt orderly queuing when they encounter it in a different social environment. This demonstrates that social environments profoundly influence individual behavior and that societal progress requires time to take root. If individuals are well-educated and self-aware, they can resist replicating uncivil behaviors, thereby setting new standards and accelerating the advancement of civilization. As the saying goes: Civility starts with me!

4: Hackers and Painters: The Art of Creation

Do you understand this formula? PR(A) = (1-d) + d * (PR(T1)/C(T1) + ... + PR(Tn)/C(Tn)) It’s the core algorithm behind Google’s search engine. A doctoral student at MIT in Boston once marveled at how Larry Page and his supervisor simply added a crucial part to an existing algorithm, completely revolutionizing the technology that founded Google and, in doing so, transformed the global internet industry.

The thing is, everyone knows ‘the paper window breaks at a touch,’ but often, we can’t even find the window. In the tech world, those rare individuals who find and break through this “paper window” are what we call "hackers."

During Silicon Valley’s hottest startup incubation period, Paul Graham of Y Combinator penned a seminal book titled “Hackers & Painters.” In it, he eloquently argues that hackers, much like painters, architects, and writers, are fundamentally creators and, by extension, artists. He conveys that the true essence of a hacker lies in creation, not merely in coding. Many successful hackers who’ve breached highly secure systems, from government networks to banks, have done so not through technical prowess alone, but through creative thinking to pinpoint vulnerabilities.

Creative thinking is, indeed, an art, and all great artists possess their unique ways of thinking.

Higher beings exist to create. Even the very DNA within our cells makes occasional "mistakes" during replication, leading to mutations, which are the fundamental drivers of the evolutionary process. Over millions of years, these continuous mutations have led to the incredibly diverse life forms we see today, including self-aware humans.

Genetic mutation is nature’s way of ‘trial and error,’ and through this continuous cycle of ‘trial and error,’ creation truly happens. Those who push creativity to its absolute limits are known as inventors and artists—and yes, hackers are artists too.

Silicon Valley is teeming with technically brilliant individuals who might appear awkward and earnest, often more interested in world-changing ideals than mere monetary gain. They might seem shy, but beneath that exterior burns a passionate and inventive spirit.

These are the entrepreneurs I admire most: kind, pure-hearted, and driven by a genuine desire to change the world. They might not be gifted orators like Jack Ma, but they possess an artist’s fiery, inventive heart, often hidden beneath a timid demeanor. This, truly, is the heart of hacker culture in Silicon Valley.

5: The Open Source and Crowdsourcing Revolution

On my flight to the U.S., I watched a compelling TED talk titled “Open-Source Cancer Research” by Dr. Jay Bradner. His lab made a groundbreaking discovery: a molecule, JQ1, capable of stopping cancer cells from proliferating endlessly by making them “forget” their identity. Rather than patenting JQ1, his team made a bold decision—they published their findings and openly shared samples with 40 other labs globally. This collaborative approach rapidly led to significant progress and invaluable feedback, dramatically accelerating the research.

This represents a promising new direction for open-source cancer research. By adopting open-source and crowdsourcing strategies, advancements in biomedical science can accelerate exponentially, ultimately benefiting humanity and saving countless lives.

For centuries, life sciences and cutting-edge medical technologies have largely been confined within pharmaceutical company labs, with commercialization dictated by market dynamics. Often, if an existing, less effective product remained profitable, a new, superior, and cheaper alternative might be intentionally delayed or even suppressed from reaching the market. Business decisions, in such cases, could sometimes contradict human decency and morality, with legality being the primary concern over broader ethical considerations.

However, the open-source and crowdsourcing revolution that began in computing and the internet is now profoundly influencing medicine and biotechnology. Academia is leading this transformative change, prioritizing scientific breakthroughs, life-saving treatments, and universal accessibility over traditional commercialization and profit maximization. Far from stifling competition, open-source and crowdsourcing have demonstrably accelerated research and development through global laboratory collaboration.

With the help of open-source and crowdsourcing, Dr. Bradner’s lab’s JQ1 molecule has effectively made midline carcinoma cells “forget” their cancerous nature, halting their replication. It is not a stretch to believe that, with an open and sharing mindset, all cancers can be conquered if we view humanity and our planet with a broader, more collaborative perspective.

During a visit to Tesla, I witnessed a powerful symbol of this new era. The once patent-filled “patent wall” was stripped bare, replaced with a screenshot from the grammatically incorrect Japanese game Zero Wing, featuring its famous dialogue:

"CATS: All your base are belong to us."

...altered ingeniously to:

"OEMS: All our patent are belong to you."

On June 12th, Elon Musk himself penned a blog post articulating this philosophy:

"Tesla cars are created to advance sustainable transportation. It would be contrary to our goal to inhibit others with our patents. Tesla will not initiate patent lawsuits against anyone who, in good faith, uses our technology."

Elon Musk, whom I deeply respect as an entrepreneur and tech geek, aligns his actions with his blog’s message, signaling a future of more open and fair business practices. While patents historically protect inventors’ interests and incentivize innovation, they can also paradoxically hinder others’ creativity—a model that is now due for change. As open-source, crowdsourcing, and the open internet mindset permeate all industries, I firmly believe this new era is quietly upon us.

Great minds are often heralds of a new era; they are more than entrepreneurs, scientists, or thinkers—they are doers who transform the world, true leaders.

6: The Spirit of Freedom at UC Berkeley

At UC Berkeley, a vibrant hub of academic freedom, their motto “Fiat Lux” or “Let there be light” truly encapsulates the spirit of freedom that pervades the campus. It’s renowned as perhaps the freest university in the world, with a deep and abiding respect for individual will and expression.

The campus gained global prominence during the Vietnam War era, with the 1964 Free Speech Movement marking the beginning of its enduring legacy in civil rights, women’s rights, LGBTQ rights, and various minority group movements. Berkeley is also widely recognized as the birthplace of hippie culture, further cementing its reputation for unconventional thought and social activism.

A fascinating aspect of Berkeley's academic environment is that students, with a professor’s endorsement, can create and even teach their own courses. For instance, an "Introduction to Consulting" class saw 200 applicants, though only 32 could be accommodated due to space limitations. Another student offered a unique course: playing the carillon atop the campus’s iconic bell tower.

Another quirky and unique tradition is the “Naked Run” during the final week of exams, where hundreds of students participate—a testament to the campus's uninhibited spirit. While I only have a vague photo to show for it, both Stanford and Harvard have their own versions of this tradition.

Berkeley’s chancellor, quite uniquely, often requires personal security, likely a reflection of the intensely free-spirited and sometimes unpredictable student body.

Despite any concerns about the potential for too much freedom, Berkeley consistently excels academically. It ranks sixth globally for Nobel laureates and first for Turing Award winners, with strong performances in the Fields Medal as well. Notably, Nobel laureates here don’t receive a cash prize but are honored with a coveted lifelong parking spot, highlighting the premium value of parking on campus.

Berkeley isn’t solely focused on STEM; it also excels in the humanities and social sciences. Notables like Federal Reserve Chair Janet Yellen are alumni, and the Haas School of Business often ranks above Harvard’s. Its political science and public policy departments are also highly regarded. The school has produced IT luminaries such as:

• Gordon Moore (co-founder of Intel)
• Masayoshi Son (founder of SoftBank)
• Eric Schmidt (former CEO of Google)
• Steve Wozniak (Apple co-founder)
• Cher Wang (HTC founder)
• The youngest academician in China, Dr. Deng Zhonghan.

Berkeley truly stands as a beacon of both intellectual rigor and unwavering freedom.

7: Dreams and Action: The Google "Jolly Good Fellow"

Meng, widely known as Chade-Meng Tan, is one of Google’s first 100 engineers. Renowned for his tradition of taking photos with visiting celebrities, his office wall—affectionately dubbed “Meng’s Wall”—is filled with these snapshots, making it a staple attraction at Google headquarters. His casual business card, famously reading “Good Jolly Fellow,” perfectly reflects Google’s culture where employees are encouraged to choose their own titles.

Meng is not just Google’s “jolly good fellow”; he is also the author of “Search Inside Yourself,” a book on emotional intelligence that has been hailed as Silicon Valley’s most popular EQ course. His influence extends globally, having graced the cover of The New York Times twice and delivered speeches at prestigious venues like the White House and TED Talks. Making a significant shift from software engineering to Google’s People Development team, he now focuses on personal growth and has been described as a “soulful engineer” dedicated to enlightening minds and fostering world peace through initiatives like Google’s internal meditation courses.

Meng’s ultimate goal is to contribute profoundly to humanity, aspiring to achieve peace and inner balance worldwide. Through his actions and initiatives, he hopes to do something truly worthy of the Nobel Peace Prize. His journey beautifully illustrates that the fundamental difference between ordinary people and extraordinary visionaries like him is not merely the size of their dreams, but the decisive, consistent steps they take to realize them. He reminds us that action is the bridge between aspiration and achievement.

8: Unity of Knowledge and Action: East Meets West in Boston

My thrilling trip to Silicon Valley left me hungry for more, so I jetted six hours from the West to the East Coast to visit the long-admired MIT and Harvard in Boston. Locals affectionately call Boston a “Small big city” due to its modest size despite its big-city status, with world-famous institutions like Harvard and MIT located in Cambridge to the north, across the lovely Charles River. An early morning run there was pure joy, offering serene views of the city's intellectual heartland.

Harvard originally began as Cambridge College in 1636, named after Cambridge in England, where many of its founders, including John Harvard, were educated. Harvard University officially opened in 1638 with nine students. After John Harvard, an alumnus of Emmanuel College at Cambridge University in England, passed away in 1638, he left half his estate and his library to the school. The famous statue of John Harvard on campus isn’t actually him, as no images of him exist; it was modeled after a handsome student of the time, leading to its nickname: "the statue of three lies."

During an evening with MIT-CHIEF (MIT Chinese Entrepreneurship Forum), I shared insights with Chinese postgraduates, PhD students, and entrepreneurs, and learned about MIT’s motto “Mind and Hand.” This motto resonates deeply with the Confucian principle of “unity of knowledge and action.” Compared to MIT’s hands-on, practical approach, Harvard’s motto emphasizes truth and the pursuit of knowledge. This fundamental difference reflects in the types of graduates they produce: Harvard alumni often lean towards academia and research, while MIT’s are heavily involved in entrepreneurship and practical projects that bring ideas to life.

MIT’s Media Lab is an elite space with projects extending far beyond conventional “media,” delving into high-tech fields like Affective Computing and Synthetic Neurobiology. Despite the Lab’s undeniably innovative atmosphere, local investors wisely warn against getting too caught up in its hype, emphasizing the need for practical application.

During dinner with students from both Harvard and MIT, I noticed the notable dominance of Tsinghua University alumni—a testament to its significant presence in top U.S. universities. Our new Silicon Valley investment, “Hesei Technology,” was founded by a talented team from Tsinghua and Stanford, intending to revolutionize atmospheric quality detection with lasers.

I gained a firsthand understanding of MIT’s hacker culture, characterized by its pragmatic and solution-oriented approach, especially through the use of new technologies to assist large companies. Unlike the free-wheeling, often consumer-focused investors of the Bay Area, Boston’s investors typically prefer enterprise-facing startups, a preference evident in the prevalence of such projects at Bolt, a local hardware incubator and accelerator.

Lastly, I had the pleasure of getting to know Dheera, an MIT star known for his extraordinary hacks, impressive photography skills (showcased on his blog, Dheera.net), and for cycling from Beijing to Suzhou without GPS—a remarkable feat. Despite receiving enticing offers from companies like Facebook and Dropbox, Dheera chose to forge his own path, and he’s now partnered with another impressive MIT PhD, Li Rui, on a promising app project. These individuals embody the spirit of ingenuity and independent action that defines MIT.

9: Embrace Your True Self: The Philosophy of Burning Man

Each of us possesses an innate spirituality, a source of profound creativity that, in childhood, we expressed freely and with boundless imagination, living authentically, joyfully, and with love.

As we mature, societal, cultural, and customary constraints, particularly the fear of others’ perceptions, subtly inhibit our true self-expression. This often leads us to abandon our innermost desires and live for “others” in a constant state of busy distraction, losing touch with our authentic selves.

Nietzsche famously described three spiritual transformations:

1. The camel, which bears burdens and carries the weight of duties.
2. The lion, who fights for independence and challenges established values.
3. The child, existing in a pure state of “being,” fully present and enjoying the moment, free from the past and future.

Most of us find ourselves either as camels or lions, striving and struggling. However, a growing number of Silicon Valley entrepreneurs are actively striving for the child’s state, fully embracing the “You Only Live Once” (YOLO) mantra.

The Burning Man Festival, which began in the 1980s on America’s West Coast, serves as a vibrant playground for hippies, artists, and innovators to unleash their creativity, embrace the present, and live out their “child” phase through an immersive “art festival.”

Each summer, artists from around the globe converge in Nevada's Black Rock Desert to construct a temporary circular city for this seven-day experimental art festival. The event is surprisingly well-supported with medical facilities and strict security. Innovators, hippies, yuppies, artists, entrepreneurs, and soul searchers worldwide fiercely compete online for tickets to this unique, utopian event.

At Burning Man, participants, known as Burners, engage in non-commercial creativity and immerse themselves in a kaleidoscopic world of colorful costumes, quirky architecture, innovative talks, and ubiquitous performances. It’s a vast, unrestricted, real-life laboratory combining flamboyant art and cutting-edge technology, often described as a renaissance of “hippie geeks.” Despite the scarcity of water, electricity, and even air quality due to the desert dust, the festival is rich in sunshine, laughter, and even more eccentric Burners.

There, everyone sheds their societal masks and reverts to a child-like state, with hugs and kisses often replacing formal greetings, fostering a close-knit, supportive community free from the judgments and constraints of the “outside” world.

Steve Brown, a director of Burning Man’s promotional videos, insightfully noted that true innovation requires fearlessness and indifference to failure and public opinion—qualities that likely explain why so many Silicon Valley entrepreneurs are drawn to the festival.

Notably, Google’s founders, who selected Eric Schmidt as CEO partly due to his experience at Burning Man, and other tech icons like the founders of Tesla and Facebook, are regular attendees, seeking inspiration in the desert’s freedom and unrestrained creativity.

Elemoon’s founder, Jing Zhou, reflecting on her 2014 Burning Man experience, said, “It’s a place where you face yourself and stay true to your heart,” a simple yet profound reflection on life’s deeper meaning.

After a week, this pop-up city vanishes, including the giant human effigies symbolic of the event. Everyone leaves the desert precisely as they found it, reflecting a powerful return from the colorful facade to life's pristine, essential nature.

P.S. Catherine from Sina Finance North America, the first Chinese journalist to cover Burning Man, is returning for her second year. Amidst the desert storms, Catherine and her friends will bravely capture the festival's unique beauty, with their stories and videos soon to be shared with Chinese netizens through her series and my WeChat public account (wanglijie1979).

About the Author:

Leo Wang Entrepreneurship, Investment, Cultivation Founder of PreAngel Fund