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Business

Two Silicon Valleys

Silicon Valley's movers and shakers mingle at the Battery, an exclusive private social club in San Francisco's financial district.

SILICON VALLEY -- The enormous vitality of Silicon Valley as an ecosystem of technological innovation is a magnet for people from all over the world. To tap into its power to create game-changing ideas and products, some governments have launched programs to help entrepreneurs build crucial networks of contacts in the world's leading startup hub.

     Silicon Valley is a vibrant, cosmopolitan community of entrepreneurs where the young and ambitious from all over the world compete to create the next Apple or Google.

     An immigrant comes to live in Silicon Valley every 30 minutes, and a third of its population is now made up of people born in foreign countries like Mexico, China, and India. Indians, in particular, have built a high-profile presence in the area, highlighted by a large-scale event to welcome Indian Prime Minister Narendra Modi on Sept. 27 in San Jose. Indian residents in Silicon Valley who filled the 18,000-seat SAP Center in the city chanted "Modi, Modi" when the premier took the stage.

     There is good reason for the enthusiastic welcome the local Indian community gave Modi, who became the first Indian leader to visit the West Coast in more than 30 years. Some Indian-born tech moguls, including the chief executives of Microsoft and Google, have boosted the country's international technological stature.

     In a move to capitalize on the huge potential of this startup promised land, Singapore's government in January launched a program to provide offices, funds and advice for entrepreneurs in San Francisco. In addition to supporting Singaporean startups, the program also targets U.S. startups seeking to expand into Asia.

     The Canadian government has secured seats in several shared offices for startups to offer a three-month program to help Canadian entrepreneurs build contacts among compatriots in Silicon Valley.

     Katherine Hague, who took part in the program, says the network of contacts she built back then helped her to expand her business into Silicon Valley before selling it later.

     In a rather belated move, the Japanese government has rolled out a project to help 200 small Japanese businesses and startups expand into the area over the next five years. The project has been created under the initiative of Prime Minister Shinzo Abe, who at the end of April became the first incumbent Japanese prime minister to visit Silicon Valley.

Invitation only

Despite its open, multicultural atmosphere, however, Silicon Valley has its social hierarchy, and the town's top movers and shakers tend to mingle only in highly exclusive social clubs.    

     One such club, "The Battery" in San Francisco's financial district, is a four-story building housing a luxurious lounge, restaurant, sports gym and hotel rooms, where membership is strictly by invitation only. The most important membership criterion is not the number of assets but the number of contacts.

     Many of the some 2,000 members are investors and entrepreneurs who know the most important and powerful people in Silicon Valley.

     "You cannot encounter really good deals unless you are in the inner circles," says an investor who is a member at the Battery. The club is where such deals are quietly discussed and sealed.

     There are also events reserved exclusively for the Silicon Valley elite, such as totally off-the-record conferences for invited guests only held at resorts in Hawaii and Mexico and parties thrown by cash-flush venture capitalists at their own homes.

     These represent the hidden side of Silicon Valley, where only a small number of selected people trade the most valuable information.

     Access to the top table brings a wealth of opportunity, but for the vast majority these elite circles remain a closed shop in a land where "who you know" matters much more than "what you know".

     Japanese, especially large Japanese companies, have not been making sufficient efforts to get connected with such powerful insiders, according to Daniel Okimoto, professor emeritus at Stanford University, who has been observing Japan's relationships with Silicon Valley for years.

     As advice to entrepreneurs struggling to establish a foothold in this complicated breeding ground of high-tech startups, the Battery club insider says, "There are two Silicon Valleys." 

Nikkei staff writers Yuichiro Kanematsu and Mamiko Fujita contributed to this article.

 

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