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Last Updated: Friday, 3 August 2007, 14:25 GMT 15:25 UK
The new wave of Silicon Valley start-ups
Spencer Kelly
By Spencer Kelly
Click presenter

Silicon Valley is the southern part of San Francisco's Bay Area, stretching from the city to San Jose. This is one of the top research and development centres in the world; wherever you look someone is having a good idea.

Behind the scenes of Click's trip to Silicon Valley

According to the Wall Street Journal, half of the 20 most inventive towns in the US are in Silicon Valley.

Nowadays the place is not just about silicon chip makers; all technology is here.

It is a string of satellite towns full of clever people, incredibly successful tech companies, and hopefuls looking to make the big time.

This place was the centre of the dotcom bubble of the mid 90s, when investors were pouring money into anything with a dot in the title. Of course it was also the hardest hit when the bubble burst. For every surviving big player, hundreds went under.

Now the optimism is back, along with the money.

Cash call

Each week there are meetings, networking events and presentations in which hopeful start-ups attempt to garner interest from investors.

The Drobo boxes are selling for $500 a pop
Vincent Lauria, Tech meetup organiser said: "Hi-tech meetups have actually grown phenomenally. We started out pretty small, six people first met up. We met every month and kept growing gradually, bigger and bigger until it hit critical mass and started growing on its own.

"We are now over 1,500 people," he said.

"I try to pick companies that either I feel are on a very good course to do well, or have a really unique idea that nobody else is really touching."

It is often the simple things that take off. Take Data Robotics which makes high capacity home storage systems called Drobo.

Geoff Barrall, Data Robotics boss, said: "Today's storage solutions are all very intensive; you have to move data around, you have to copy files, you have to worry about backing up data.

Close-up of microprocessor, Eyewire

"The Drobo does all of that for you. So once the data is on Drobo it's going to worry about keeping it safe, it's going to worry about letting you add more storage and grow into the future without you having to do anything at all."

Simplifying storage and back-up has tapped into a big market. Data Robotics claims it is selling its $500 (250) boxes faster than it can make them.

Green machines

It is not just computer technology that folks in the valley are working on. Green technology is winning investors too, said Drew Clark from IBM Capital Ventures.

"I think [one of] the major drivers in today's buzz in Silicon valley is clean tech or energy tech or energy 2.0, whatever we are calling it these days," said Mr Clark.

"If you look at venture capital statistics it is now the third highest place that money is going into.

One of the green innovations dreamed up is a highly efficient solar panel.

Solar panels
The curved panels use 1/1000th of the area needed by traditional ones
The panels produced by SolFocus reflect sunlight to a central point to harness the energy.

Unlike flat panels it means the expensive materials used to convert the energy to electricity are concentrated in one place. SolFocus claims to use 1/1000th of the area needed by flat panels, which keeps the manufacturing costs low.

Gary Conley, SolFocus explained: "These cells have efficiency over double that of the best silicon today. We concentrate the sun 500 times on that small amount of cell, hence the 1000th of the amount of material used, or the expensive part.

"When there is no sun, or you can't see the solar disc, our panels produce zero power. They only produce power in bright sunny locations or when the sun is out."

Contracts have already been signed with the Spanish government for a large scale solar farm in Southern Spain.


The other boom area is something called mash-ups which build on the crop of richly interactive websites that are part of that nebulous movement called Web 2.0.

This has given us sites such as RateItAll.com, which lets people express their like or dislike of almost anything, and Like.com, which lets you shop by searching for stuff similar to what you have already bought.

Silicon Valley
San Francisco is the gateway to Silicon Valley
"Mash-ups come from hip hop DJs mashing together sounds to create new sounds," said Mr Clark from IBM.

"Web 2.0 really was fundamentally about the web enabling that kind of thing, but not necessarily music but other kinds of content.

"Google went out there with Google Maps and Google Earth and provided the early mash-ups. So a lot of creative people came together and monetised it.

"They basically said real estate listings are boring, so what if we took the text and the geographical coordinates and mash them up on a map so you can actually look at the house and see where it is.

The next big idea could be very local too. In the age of virtual networks many of us know more about Apple than our next door neighbour. Fatdoor.com aims to tell you more - if you are interested.

Although research suggests that fewer than 1% of tech start-ups will be successful in attracting enough cash, it is not hard to see the potential returns if you pick a winner.

Two people with a couple of computers here in South Park can do a lot of things very quickly, so the risk you have as an investor is to have something unique and differentiate it
Peter Rip, venture capitalist, said: "A lot of the things that I see in web 2.0 are features, they are not really businesses and they are frankly pretty easy to replicate.

"Two people with a couple of computers here in South Park can do a lot of things very quickly, so the risk you have as an investor is to have something unique and differentiate it.

Mr Rip told the story of two developers who had worked on a project for four years before they showed it to him.

"So they had a deep intellectual property and they actually had invented something that wasn't easy to replicate, he said. "That gives them a barrier to go and build a business around it."

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