The dark side of Silicon Valley and Bangalore

London: Since the dot.com era, governments and businesses have been trying to clone Silicon Valley, attempting to recreate that special magic that has given rise to so many world-changing businesses. But focusing on creating tech hubs might turn out to be detrimental in the long run, creating bubbles that distort reality and start-ups that have unrealistic business models and implausible products.

I n a column for VentureBeat , Rocky Agrawal explores one of the the problems with the Silicon Valley model: There are too many smart people in one place, which means entrepreneurs have an unrealistic view of how the world works. He opens with the example of Uber, a taxi company that used elastic pricing for its hires on New Year’s Eve but relied on customers to do the maths on its regular hire rate to figure out what the current rate would be.

Although Uber claims to have tested price elasticity on New Year’s Eve, what they really tested was the ability of drunk people to comprehend a bad user interface. If they had truly tested price elasticity, there should have been no complaints about the surge pricing because the people who paid 6x the normal rate would have been satisfied with their decision.

I hear similar tone-deafness when it comes to things like screen size, compute power and connectivity. We Silicon Valley types are sitting at 24" monitors with the latest hardware connected to 20 Mbps pipes designing products that are used by people with five-year-old computers at DSL speeds or worse. Not everyone has the desire (or the money) to upgrade their computer or phone every year. I see many products that while beautiful and elegant in the right environment, wouldn’t work well in many homes.

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But it’s not just start-ups that lose their way in the Silicon Bubble. Recent redesigns by Google, for example, have led me to wonder if they have actually tested their new Gmail, GCal and GDocs interfaces with real users, people who don’t live, eat and breathe technology. Whilst I can reverse-engineer a logic to the move from words to icons for the buttons in Gmail - I can see how it might make life easier by reducing the amount of translation required to localise the product for dozens, if not hundreds of languages - that doesn’t make it any more usable. An elegant solution to a technical problem doesn’t necessarily make for an elegant user experience .

There’s no doubt that San Francisco and the Valley are tucked away in their own little world where there’s free and fast wifi on every street corner, coffee shops are happy to let developers camp out on their couches in return for a couple of low-fat decaf lattes, and you can brainstorm database architecture with your neighbours. But that’s not how everyone else experiences the world.

The same problem is brewing here in the UK with the government’s focus on the drably named East London Tech City , which, we are told, stretches from Old Street to Stratford. The Old Street Roundabout had already earnt the nickname ‘Silicon Roundabout’ for the London start-up scene that has flourished there over the last five years. Companies like Dopplr, Last.fm, TweetDeck and Moo began there and the area has become a magnet for British tech entrepreneurs.

In fact, the area became so well known for tech business that the British government co-opted it: Prime Minister David Cameron announced in 2010 that there would be government investment into the area to help encourage growth. The initiative has attracted promises of investment from Cisco, Facebook, Google, Intel and Vodafone and participation from Imperial College London, Loughborough University and University College London. And BT are rolling out superfast broadband across the area.

I can see how valuable is can be for entrepreneurs to be surrounded by their peers, able to meet for lunch or coffee whenever they need to discuss an idea or get help solving a problem. But London is already an insular, self-obsessed place with both a media and a government that struggles to cope with understanding life outside of the M25 motorway which encircles the city like a noose. We need our tech entrepreneurs to be rooted in reality, understanding and experiencing life the way that the majority of people do so that they can solve the problems that the majority of people have.

My concern with tech hubs like Tech City, Silicon Valley or Bangalore is that they create a fantasy world where the bytes flow like water and the average user on the street is actually a fellow entrepreneur. It is imperative that, whilst trying to stimulate the tech sector, governments and entrepreneurs remember to keep themselves focused on the world of normal people, living in normal towns with normal broadband speeds and computer gear that is, normally, a couple of years old. Otherwise we’ll end up with a lot of innovation that simply doesn’t work outside of the tech bubble in which it is born.