Two Key Factors that Makes Silicon Valley Such Fertile Ground for Startups

The most important legal factor is the California State ban on Non Compete Law:

    … a very special law was enacted in California in 1872. The law in question declared null and void any contract between a business owner and employee if said contract in any way restricted the employee’s freedom to change employers, even if that meant joining the former employer’s competition.

    In other words, any previously signed agreements—for example, an employee contract signed upon hiring—that could in any way limit the employee’s right to freely choose his or her place of work were deemed unenforceable in this 1872 law. More specifically, those clauses that were in conflict with this law were deemed unenforceable.

    This law was initially ratified in 1872 as part of California’s Civil Code. It is now listed under California Code – Section 16600, also known as CAL. BPC. CODE § 16600, and reads:

      Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.

    As a result of this cascade of direct and indirect consequences from the application of this law in Silicon Valley, today a number of generally operating U.S. legal standards, including some of the most important, are practically blocked (“de facto” canceled). Read more: From the Gold Mines of El Dorado to the “Golden” Startups of Silicon Valley

    The above California law was recently tested during the Hewlett-Packard special experimental research: NDA Experiment Set up by Mark Hurd.

The most important among Silicon Valley startups motivation factors is the “not afraid to fail” attitude:

    Perhaps one of the first practical application of this attitude was formulated about 22 centuries ago.

      “A mistake in choosing the right way of actions should be punished less than omission”
      ~ Roman army, 200 BC


    Two thousands years later people still continue to look for some of the alternative approaches that can bring the positive results as well:

    See also, a bit more detailed description of the same phenomenon:

      “Our results indicated that the frequency of omission increases when punishment is possible. We conclude that people choose omissions to avoid condemnation and that the omission effect is best understood not as a bias, but as a strategy”.
      ~ The Omission Strategy. Peter DeScioli, Brandeis University, Departments of Psychology and Economics

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