People have been proclaiming the death of silicon valley since the late 80s, when tech IPOs peaked in 1983, and the video game crash of 1983. But then silicon valley produced several more innovative booms - PC, internet, social, and mobile, making the local economy 1 trillion dollars and surpassing its cousin, LA economy. Whereas LA economy stagnated after the 90s after aerospace and manufacturing moved out, silicon valley kept its dynamism, innovativeness, and of course venture capital.

There are several hard-to-replicate formulas for silicon valley

1.) Money likes to stay in silicon valley: Other money is in silicon valley. Stanford, Berkeley, and Santa Clara university. Existing networks. Beautiful weather (26c today in san jose), low humidity. Gorgeous landscape. Great wine and michelin restaurants. World class cuisines in American, Japanese, French, Italian, Indian, Chinese, Vietnamese in Bay Area. Many activities to do year round. Beaches, mountains, coastlines, deserts, and forests. Vibrant immigrations. Good infrastructure. Close proximity to Seattle, Las Vegas, Hawaii, and Los Angeles.

2.) Talents are already in silicon valley, and their million dollar houses are in silicon valley. Easy to interview with various companies when they are all near where you work and live. Safe neighborhoods. Engineers that you can meet one another in meetups. Existing networks.

3.) California is the 5th largest economy in the world. And Silicon Valley is the fastest growing economy within it. Lack of regulations to start a startup, raise money, sell to other states in US, which is the largest economy in the world and has the largest consumer market in the world - 1/3 of the world's consuming power. the next closest consumer market that shares the same language and culture is Japan at 1/3 of US's size. And US economy is fast growing, whereas Japan and China are stagnating.

4.) Inherited knowledge is in Silicon Valley. How to bootstrap better. How to invest better. How to run teams better. How to produce software better. How to innovate faster. Everyone knows a little bit of the piece of the puzzle, and have been practicing it for 40 years.