The Pay-It-Forward Culture

Foreign visitors to Silicon Valley continually mention how willing we are to help, network and connect strangers.  We take it so for granted we never even to bother to talk about it.  It’s the “Pay-It-Forward” culture.

——-

We’re all in this together – The Chips are Down
in 1962 Walker’s Wagon Wheel Bar/Restaurant in Mountain View became the lunch hangout for employees at Fairchild Semiconductor.

When the first spinouts began to leave Fairchild, they discovered that fabricating semiconductors reliably was a black art. At times you’d have the recipe and turn out chips, and the next week something would go wrong, and your fab couldn’t make anything that would work. Engineers in the very small world of silicon and semiconductors would meet at the Wagon Wheel and swap technical problems and solutions with co-workers and competitors.

We’re all in this together – A Computer in every Home
In 1975 a local set of hobbyists with the then crazy idea of a computer in every home formed the Homebrew Computer Club and met in Menlo Park at the Peninsula School then later at the Stanford AI Lab. The goal of the club was: “Give to help others.” Each meeting would begin with people sharing information, getting advice and discussing the latest innovation (one of which was the first computer from Apple.) The club became the center of the emerging personal computer industry.

We’re all in this together – Helping Our Own
Until the 1980’s Chinese and Indian engineers ran into a glass ceiling in large technology companies held back by the belief that “they make great engineers but can’t be the CEO.”  Looking for a chance to run their own show, many of them left and founded startups. They also set up ethnic-centric networks like TIE (The Indus Entrepreneur) and the Chinese Software Professionals Association where they shared information about how the valley worked as well as job and investment opportunities. Over the next two decades, other groups — Russian, Israeli, etc. — followed with their own networks. (Anna Lee Saxenian has written extensively about this.)

We’re all in this together – Mentoring The Next Generation
While the idea of groups (chips, computers, ethnics) helping each other grew, something else happened. The first generation of executives who grew up getting help from others began to offer their advice to younger entrepreneurs. These experienced valley CEOs would take time out of their hectic schedule to have coffee or dinner with young entrepreneurs and asking for nothing in return.

They were the beginning of the Pay-It-Forward culture, the unspoken Valley culture that believes “I was helped when I started out and now it’s my turn to help others.”

By the early 1970’s, even the CEOs of the largest valley companies would take phone calls and meetings with interesting and passionate entrepreneurs. In 1967, when he was 12 years old Steve Jobs called up Bill Hewlett the co-founder of HP.

In 1975, when Jobs was a young unknown, wannabe entrepreneur called the Founder/CEO of Intel, Bob Noyce and asked for advice. Noyce liked the kid, and for the next few years, Noyce met with him and coached him as he founded his first company and went through the highs and lows of a startup that caught fire.

Steve Jobs and Robert Noyce

Bob Noyce took me under his wing, I was young, in my twenties. He was in his early fifties. He tried to give me the lay of the land, give me a perspective that I could only partially understand,” Jobs said, “You can’t really understand what is going on now unless you understand what came before.”

What Are You Waiting For?
Last week in Helsinki Finland at a dinner with a roomful of large company CEO’s, one of them asked, ”What can we do to help build an ecosystem that will foster entrepreneurship?” My guess is they were expecting me talk about investing in startups or corporate partnerships. Instead, I told the Noyce/Jobs story and noted that, as a group, they had a body of knowledge that entrepreneurs and business angels would pay anything to learn. The best investment they could make to help a startup culture in Finland would be to share what they know with the next generation. Even more, this culture could be created by a handful of CEO’s and board members who led by example. I suggested they ought to be the ones to do it.

We’ll see if they do.

——

Over the last half a century in Silicon Valley, the short life cycle of startups reinforced the idea that – the long term relationships that lasted was with a network of people – much larger than those in your current company. Today, in spite of the fact that the valley is crawling with IP lawyers, the tradition of helping and sharing continues. The restaurants and locations may have changed, moving from Rickey’s Garden Cafe, Chez Yvonne, Lion and Compass and Hsi-Nan to Bucks, Coupa Café and Café Borrone, but the notion of competitors getting together and helping each other and experienced business execs offering contacts and advice has continued for the last 50 years.

It’s the “Pay-It-Forward” culture.

Lessons Learned

  • Entrepreneurs in successful clusters build support networks outside of existing companies
  • These networks can be around any area of interest (technology, ethnic groups, etc.)
  • These were mutually beneficial –  you learned and contributed to help others
  • Over time experienced executives “pay-back” the help they got by mentoring others
  • The Pay-It-Forward culture makes the ecosystem smarter

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41 Responses

  1. This is advice any up and coming entrepreneurial community should take at heart. However i am not very sure if the rite amounts of expertise exist in isolated tech communities, maybe Finland and UK have some experience surmounted throughout the successful ventures that have been created there…

    But elsewhere in the world there simply is not enough juice for younger entrepreneurs to drink… One more reason why moving to Silicon Valley makes sense…

  2. One of the essays in Tom Wolfe’s “Hooking up” narrates the journey Robert Noyce made in the beginnings of Silicon Valley, and how the small religious community he came from shaped the values of Intel and Silicon Valley culture to be something very different from east coast business at the time. I found it a very interesting read.

  3. this is so true – so many valley folks have helped out in “meaningful” ways in my startup journey so far (expecting nothing in return.. and i didn’t even know many of them – just reached out for help)… can’t ever thank them enough!! grateful and hoping to pay it forward…

  4. The supportive environment that the pay it forward culture, the embracing and supporting of risk taking is what brought me to the valley and is why I’ve come to realize I will never leave the valley. There really is nowhere else in the world like it and you are correct that it is as much if not more to do with the support system and mentorig environment as it is access to capital and engineering talent-although these act as amplifiers

  5. PIF for sure check out http://www.pifexperience.org to see what we are doing with the pay it forward concept. Thanks for the article man

  6. Excellent point…. and while reading the article, I was struck with an idea for how I can pay it forward, and help others who want to do startups. One of the benefits of this, of course, is that you also learn by mentoring people, and no matter how experienced you are, there are always new things to learn.

    Also, wanted to put in the request that you make an ebook version of your book. I do not have any paper books anymore. Not a single one. I live a nomadic existence and all my possessions fit in a backpack. I’d love to read your book, but I cannot do so until there’s an electronic version. (When you are running a software business and your backpack weighs only 20 pounds total to fit in airline requirements, you have to draw the line. A pound or two for your book would be a %10 increase! This would cost me the entire cover price every time I fly in forced-check-luggage fees.)

    I may be the extreme customer, but if someone scans a PDF of your book and uploads it, I’m gonna download it and mail you a check for $50! How about we cut out the middle man and you make a version for he iBookstore?

  7. Love these stories. Also applies to the streetwear culture in Los Angeles in the last 2 decades. I was a partner in the avante-garde streetwear company, X-Large Clothing. We had a whole network of what we called, “friendly competitors.” Our biggest competitor in Japan was Stussy. When another company was stealing our designs and shipping them to Japan, I called on the Stussy attorney who I had met a few years earlier. They had more experience going after these types of companies. The Stussy CEO said it was okay for him to “moonlight” and represent us as an attorney. We sued this company and won a big settlement which I would not have been able to do without his help. I gave him a third of the settlement. Stussy helped shut down a company that would probably have ripped them off down the line. A win-win-win.

    All our friendly competitors prospered. We sometimes even collaborated on designs together.

    Maybe it is just a west coast thing but I think every company, and every industry would benefit greatly with the friendly competitor attitude.

  8. Steve, I often wonder if you are prescient! This morning, IMF Managing Director, Christine Lagarde, spoke about the state of the global economy. She identified the requirement for governments and industries to shift from postions to common interests; and to work together collaboratively rather than competitively. In essense, she’s talking about “Paying It Forward”. TED has been doing this for years and continues to share information to enable. This is perhaps the most important strategy element for us to develop in business, in community and in ourselves. “Paying It Forward” is no longer a nice thing to do so we feel good – it is reality – it is survival.

  9. I love the Pay It Forward concept and think it is applicable at all levels in an enterprise. Personally, I think have been the recipient of far too little advice in my career. My experience has been that many are consumed by the selfish pursuit of the almighty dollar and winning, they are afraid to empower those junior to them – here to hoping we can change!

  10. Steve:
    I’m a fan and supporter of Venture For America… my old home town of Detroit is at the top of their hit list. I believe that a single successful entrepeneuer with resources can create an incubator and begin building the culture that eventually becomes self-sustaining in terms of spawing new businesses. One man/woman with visioini/resources/persistance can make this happen. May take longer and may require incentives to get the early projects seeded. This kind of PIF process will attrack others. Its leadership and vision and heart. And, in the longer run, it should be a good return on the investment of time and capital.
    Thank you for highlighting this fundamental ingrediant for sustainable success in building new startup communities.

  11. There is great irony in this. Europeans regularly like to refer to the US as “consumer-crazy” or “self-centered” while Europe is “society-centered” or in a “common interest.” Yet ironically your talk to CEOs in Europe required a change in mindset, one that was hard for them to grasp, while it seemed natural to Americans in fiercely competitive Silicon Valley.

    In my decade plus in Wall Street IT, I had my “rabbis”, as did others, and they were often in companies that were direct competitors.

    I think Americans are competitive, and perhaps not in that “genteel European fashion” (which is likely more stereotype than reality), but that is in the *business*. As *individuals*, even as the CEO of one business to a current or future competitor, Americans view that gift of success as one they owe others to pay forward, repay their success with the success of others.

    By the way, the other place I have seen this Pay-It-Forward culture is in Israel. Although Israeli startups have severe challenges in understanding markets and business – as opposed to technology innovation – the idea of helping others because we are all people, struggling for success, even direct competitors, is quite widespread.

  12. This is great, and love that you told the Pay It Forward story when asked about building an ecosystem of entrepreneurs. Helping people out helps on so many different levels, plus the person helping out might learn more than the person looking for advice. Thanks!

  13. [...] it Forward: Silicon Valley helps each other out. [...]

  14. [...] strong human capital, with social capital. Funny timing, but Steve Blank just wrote about the ‘Pay it Forward Culture’ in Silicon Valley and the fact that everyone is willing to help each other, and share ideas (even [...]

  15. [...] it Forward: Silicon Valley helps each other out. [...]

  16. [...] The pay-it-forward culture. Startup guru Steve Blank talks about the importance of why the pay-it-forward culture is what makes Silicon Valley special. I think we are losing some of what he is talking about. [...]

  17. Today’s entrepreneurs are enjoying the most benefits because of entrepreneurs who came before us. And so it will be for the next generation of titans. This is what makes this country great. We stand tall not only by ourselves but because we stand on the shoulders who came before us.

  18. Thankful of the help I’ve received and proud of the help I’ve given.

    And now am proud to be a part of an Indian startup, InMobi, that built a thriving global company on 15 million dollars, and this week announced a whopping 200million dollar round. BTW The founders cut their teeth here in the valley.

  19. Agree completely with the SV helping culture. I would go further and say it’s just considered being impolite to not help someone with advice if asked and you are capable of giving it. Just like not littering the public streets gives a clean environment for all, sharing knowledge with anyone who asks gives entrepreneurs an environment where they can start ambitious ventures even with critical lacks of general business experience. I also think the helping culture involves everyone to everyone, not just older to younger.

  20. I dont think only CEOs are needed. Many of us underestimate our knowledge of areas we think simple. Nokia has massive amount of engineers who know the in’s and out’s of mass production, of designing for scale, the need for process.

    How many startups fail when they scale?

    There is a wealth of information in people everywhere. Now. The question is, how to link people with a need, to those with an answer?

    Could be some problems are solved over a coffee, others could lead to jobs.

    When I look around me at work, its the lack of connections that hold people up, not lack of motivation

  21. [...] explains the “pay it forward culture” of the Valley. I’d urge you to read it and be just as generous sharing your knowledge with others at some of the excellent events we [...]

  22. We can’t have everywhere an SV… even in US that’s impossible… how we can do it?

    There are two approaches in the world on how to fund early stage entrepreneurship… The US way and the European (or Governments way)… The differences are boiling down to two simple things… Source of Assessment and Source of Capital…

    The US way (Steve’s and others) is based on assessment and capital coming from the private sector… whereas in Finland (in Europe), assessment and big part of the funding is being provided from the public sector.

    Both are having pros and cons.

    Recently is being invented a third way…

    Its Participatory Entrepreneurial Assessment and Funding… It’s using the private sector to Assess and Assist, while Funds are coming from the Public sector in full…

    The model is called iDea Framework and it combines the pros of the American way, such as, free will, personal risk factor, market driven triggers and unconstrained entrepreneurial freedom without the use of experts, Angels and VC’s, along with the pros of the European way which is the effort to invest public subsidies on start-ups, without public servants being involved with the assessment and funding of start-ups, while keeping strong Democratic authorization and accountability of the model.

    It’s all about Equal opportunities… Solon the Greek philosopher said, 2500 years ago:

    Giving Equal opportunities to *Unequal People* is equivalently bogus behaviour as of, handling *Unequally*, people.

    Steve’s approach does not fix that fact… neither Finish approach can be as effective as Steve’s in the long run…

    So if we want both to happen, effectiveness and equal opportunities we need a third way.

    iDea Framework: http://bit.ly/mTZbGw

  23. Great article. I like the nomenclature of “pay-it-forward”, because that’s exactly how it is. I’ve been in the area for a year, and I’ve experienced nothing but help and support from other entrepreneurs and engineers. Everyone is willing to help, mainly because they have been a benefactor from the local system. I also appreciate the notes above under the “Helping our own” section. I have co-founded an organization to help support black entrepreneurs in the tech space. The group is called “Black Founders.” And we often get a wide range of reactions due to misunderstanding of the groups purpose. Most people who have an negative reaction, believe the purpose is one of exclusion, but the message is actually quite the opposite. Thank you again for this post.

  24. There was a Strategy + Business article entitled “Manufacturing’s Wake-Up Call”, which discussed locating industries in “high-impact clusters” like Silicon Valley above as a means to maintain a significant presence in the US.

  25. When Shawn Carolan and I moved here from Chicago 10+ years ago – we were the lucky to literally cross paths with Steve at Yosemite. He took us under his wing and he and Alison have been incredible mentors to us since. Their wisdom has been invaluable and has inspired us to “pay-it-forward.”

  26. [...] This extends to sharing among startups. The insular nature of the culture hasn’t yet created a “pay it forward” [...]

  27. [...] Labs and the entrepreneurs, but I’d like to believe that the program graduates will also pay it forward and help other [...]

  28. [...] ran across this piece by Steve Blank on the “Pay it Forward” culture of Silicon Valley. « Why future perfect? The [...]

  29. [...] And most important…. culture I want to finish with the most important factor and that is the mentality of the people. People are positive and have expectations. When they see an opportunity, they are willing to take a risk to make something of that opportunity. Young talents start or join a startup instead of working for a big firm, advisors of startups get paid in stock, investors invest in a many startups because they expect there is a billion dollar hit among them, and people are open because they know: when you do good, you receive good. This mentality is described as the pay it forward culture. [...]

  30. [...] thing to me – and why I feel so at home in the startup world – is that there is a pay-it-forward culture, an ethos that winning is not a zero-sum game, and that we can all learn from each other. [...]

  31. [...] it forward culture: Largely discussed by Steve Blank, it’s all about doing things for the others in advance. Help other fellow entrepreneurs like you [...]

  32. [...] is an  integral part of Silicon Valley. Give before you get, (in the valley we call this the “pay it forward” culture.) Everyone is a mentor, so share your knowledge and give back. Embrace weirdness, describes a [...]

  33. [...] is an  integral part of Silicon Valley. Give before you get, (in the valley we call this the “pay it forward” culture.) Everyone is a mentor, so share your knowledge and give back. Embrace weirdness, describes a [...]

  34. [...] is an  integral part of Silicon Valley. Give before you get, (in the valley we call this the “pay it forward” culture.) Everyone is a mentor, so share your knowledge and give back. Embrace weirdness, describes a [...]

  35. [...] of the great things about being a retired entrepreneur is that I get to give back to the community that helped me. I assembled this collection of free and almost free tools, class syllabi, presentations, books, [...]

  36. [...] of the great things about being a retired entrepreneur is that I get to give back to the community that helped me. I assembled this collection of free and almost free tools, class syllabi, presentations, books, [...]

  37. [...] of the great things about being a retired entrepreneur is that I get to give back to the community that helped me. I assembled this collection of free and almost free tools, class syllabi, presentations, books, [...]

  38. [...] issues I heard about were the things we take for granted:  the lack of knowledge sharing (“pay it forward” isn’t part of the culture,) limited mentoring (few experienced mentors,) and a lack of open [...]

  39. When I was young like 5yrs old my mom worked at Fairchild and my uncle worked at lochkeed and later nasa I was lucky and have been around tech all my life and a brother at HP and cousins at apple and me who just got Projectglass I new the wagonheel my parents ate there pay it forward has been my life great post thanks agian this is for my parents ♥♡♥ )*(

  40. […] World Silicon Valley has a “pay-it-forward” culture where we try to help each other without asking for anything in return. It’s a culture that […]

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