Route 128 vs. Silicon Valley: Stop the Noize!

1/14/10Follow @BillAulet

[Updated and corrected, May 9, 2011--see below] We just came back from spending a week with 95 MIT students in Silicon Valley drinking from the West Coast Fire Hose of Entrepreneurship. Our theme was “East meets West: The Unification Study Tour.” For us, the theme worked well. But some of those out west, as well as some back in the east and in the press, preferred to pursue a competitive approach, which I find not only unattractive and destructive but also incorrect.

Most people love a competition with winners and losers where we can track them as they race along. We certainly love our rivalries: Red Sox vs. Yankees, Celtics vs. Lakers, and Patriots vs. Colts (oops—scratch that last one now). Some rappers had their own version of East Coast vs. West Coast. But these sorts of rivalries are not exactly how it works—especially with regard to innovation.

In 1980, Bob Metcalfe (esteemed MIT graduate & co-inventor of the Ethernet) came up with his now-famous Metcalfe’s Law. The essence of his insight is that the value of the network to each user is exponentially related to the number of nodes on the network. So rather than there being a zero-sum game with “competing” innovation ecosystems, in many aspects the opposite is in fact the case, especially in the new digital “flat world.” That is, the success of one area should enhance the success of another.

At MIT, we train our students to be great entrepreneurs globally, not just in Massachusetts. In fact, according to the widely cited report on the economic impact of entrepreneurship at MIT, written by MIT Sloan School of Management professor Ed Roberts and Charles Eesley, MIT alumni start 850-950 companies annually. Of those companies, an estimated 26-28 percent will be started in Massachusetts this year. In addition, an estimated 26-28 percent will be started in California. The punchline of this story is that these are not two competing ecosystems, but really one large, connected-at-the-source entrepreneurial ecosystem.

[Editor's note, May 9, 2011--Due to author error, the original version of the above paragraph stated that MIT alumni start 200-400 companies annually. The figure was changed to 850-950 companies, accurately reflecting the figures in the report by Roberts and Eesley.]

Rather than spend our time and efforts arguing about winners and losers, or us vs. them, we at the MIT Entrepreneurship Center are focused on leveraging Metcalfe’s law through our second principle of operation: “collaboration.” We will spend our time and efforts to build connective tissue between East and West…and other areas, too. There are very interesting things happening outside Route 128 and Silicon Valley that we could all learn from and gain from by working together. So next time someone starts talking about Silicon Valley vs. Route 128 or Boston, ask them to “stop the noize!” We can all gain by a mindset of working together. Let’s spread the love around and innovation will flourish…and then we all win. Leave the score keeping to the sports page.


Bill Aulet is the managing director of the Martin Trust Center for MIT Entrepreneurship and a senior lecturer at the MIT Sloan School of Management. He is also the author of “Disciplined Entrepreneurship: 24 Steps to a Successful Startup”, published by Wiley, which was released in August 2013. Follow @BillAulet

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  • http://www.greenhornconnect.com Jason Evanish

    Great points, but I think that sometimes the discussion is valid and important when you consider it from the perspective of how the existing ecosystem in Boston can be improved.

    Think of it like a baseball team. Would Lester not want to learn from what Beckett is doing to make himself better? If Lester learns from Beckett, the entire team benefits from Lester’s improvement. And as long as it is considered a team (as you suggest), there is much to be gained.

  • Bill Aulet

    Jason,
    Exactly correct Jason. Drive to get better and learn from each other is competitive forces for the good. This has been shown to be why clusters thrive. Boston can improve by learning from California but to have it be one wins and one loses I find a non-useful mental model.
    I also particularly like you suggestion and hope it happens in 2010.
    Bill

  • Marc Older

    I am working with a volunteer group investigating the potential benefits of a Personal Rapid Transit PRT system to interconnect the Boston/Cambridge Education/Medical complex.
    I am wondering if you are aware of any study of “Metcalfe’s Law” that looks at the value of reducing the “friction” in non-electronic networks, because that is what we propose to do with the PRT system.
    Thanks

  • Bill Aulet

    Marc,
    I do not know of any such studied and would not want to speculate too much. I checked with the author of Metcalfe’s law and he did not know of any. There is one other person I am checking with — I actually think this would be an interesting Systems Dynamics problem. If I hear back I will let you know but doubt that there are any that specific. Maybe someone else ou threre knows of one …
    Bill

  • http://www.transnational-research.com Art Madsen, M.Ed.

    Yes, and just as importantly, you can be absolutely sure that Beijing or Nanjing are not criticizing Guangzhou’s or Shanghai’s technological progress in an antagonistic way. It behooves the entire USA, from Rte 128 to Silicon Valley, to work in unison to maintain already slipping primacy…