The Forgotten Origins of Silicon Valley
Sebastian Mallaby's new book offers a detailed exploration of how US venture capital became the go-to model for commercializing innovations at the technological frontier. But no industry exists in a vacuum, so it is important to consider precisely why this model evolved where and when it did.
- Sebastian Mallaby, The Power Law: Venture Capital and the Making of the New Future, Penguin Press, 2022.
Christophe Lécuyer, Making Silicon Valley: Innovation and the Growth of High Tech, 1930-1970, MIT Press, 2005.
CAMBRIDGE – In his new book The Power Law, Sebastian Mallaby has produced a rich and rewarding account of how Silicon Valley co-evolved with the professional venture capital (VC) industry since the late 1950s. His book complements two other recent works: VC: An American History, by Tom Nicholas of Harvard Business School, and The Code: Silicon Valley and the Remaking of America, by Margaret O’Mara of the University of Washington – both of which I reviewed previously.
Together, Mallaby, Nicholas, and O’Mara offer a comprehensive survey of how capital is mobilized to finance high-risk ventures at the technological frontier, whereas historian Christophe Lécuyer’s Making Silicon Valley, published in 2005, provides the essential “pre-history” by taking the story back to before World War II. Both perspectives are essential to understanding what gave rise to and has sustained the world’s premier hub of technological innovation.
The Power Law is especially valuable for its deep dives into the lives of leading VC funds and the firms that they have created and led. Mallaby gained access to and won the confidence of two generations of VC leaders, and his book is all the more impressive for its (selective but effective) integration of the burgeoning academic literature on VC and entrepreneurship.