LinkedIn founder Reid Hoffman explains why Silicon Valley is still the center of tech

Eric Johnson
LinkedIn founder Reid Hoffman
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For years, cities around the world have tried to dethrone Silicon Valley as the best place to be a tech entrepreneur. But LinkedIn founder and Greylock Partners venture capitalist Reid Hoffman says the key to the Valley's staying power often goes overlooked.

"When you listen to people talk about what the 'secret of Silicon Valley' is, they always give you the startup story," Hoffman said on the latest episode of "Recode Decode," hosted by Kara Swisher. "'Technologists, inventors, tech companies, tech universities, put 'em in a soup, lightning strikes, network emerges.' Actually, that exists in many places in the world now."

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The real secret is not startups, Hoffman argued, but "scale-ups." The area's resources enable founders to build companies up to a global scale very quickly, a concept Hoffman is discussing on his own podcast, "Masters of Scale," and will explore in an upcoming book called "Blitzscaling." And yes, he knows that that title calls to mind Germany's blitzkriegs during World War II.

"I could try to be coy and say, 'Well, it's like blitz in sports!'" Hoffman joked. "But actually, the intellectual parallels to blitzkrieg are too close: The innovation of moving super-fast to accomplish something decisive within a war. Here, it's decisive within a market."

"Part of the innovation that has been developed over decades in Silicon Valley is ... [saying] 'Let's assemble a bunch of resources,'" he added. "Everything from capital to talent to knowledge to help them get to global market very fast. That's part of the reason why ... there's 4-4.5 million people in Silicon Valley and yet the majority of the $100-billion-plus tech companies within the English world are made here."

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However, being in the center of tech doesn't mean the Valley's inventors can get away with anything, Hoffman noted. He recently made headlines for proposing a "decency pledge" for venture capitalists as tech execs and VCs such as Binary Capital's Justin Caldbeck have been exposed as serial sexual harassers.

On the new podcast, he also said the tech industry is "grow[ing] up some" as it weighs the impact of its work on the rest of the world. Whether in politics or entrepreneurship, Hoffman said he subscribes to the "Spider-Man" line, "With great power comes great responsibility."

"Let's still build as fast as we can, but let's also engage in dialogue, hear people's concerns — not presume that because we can build it, we know exactly how it should be built," he said. "But [let's] make sure that we're paying attention to the constituencies of people that want to be part of the future."

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This article originally appeared on Recode.

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