Startup Hotbed Inferiority Complex(avc.com)
avc.com
Startup Hotbed Inferiority Complex
http://www.avc.com/a_vc/2009/07/startup-hotbed-inferiority-complex.html
15 comments
A very smart guy says "ignore everybody" to be creative. Maybe that's harder when there are more people around a lot like you, but not quite. http://www.changethis.com/6.HowToBeCreative
Sounds good in principle, but if you look at the matter empirically, very creative people almost invariably cluster in hubs. Empirically you seem to lose more from being in a backwater than you gain.
Those hubs can be online. Hugh is always on Twitter and often in the bay area.
Currently I don't run a startup nor do I work for a startup(I know, what am I doing on hacker news!), but this is something I think about a lot.
I live in Ottawa, Ontario, Canada which has a fairly lively technology community and what seems to be a growing startup community and it always gets me to wondering whether the Silicon Valley thing is just hype or whether it really is the place to be.
The main thing I always consider in this(especially when i consider possibly starting my own startup) is whether it is hype or not. Maybe it becomes a self fulfilling prophecy that Silicon Valley will always be king if all the best talent moves to silicon valley to start or work with new startups.
I live in Ottawa, Ontario, Canada which has a fairly lively technology community and what seems to be a growing startup community and it always gets me to wondering whether the Silicon Valley thing is just hype or whether it really is the place to be.
The main thing I always consider in this(especially when i consider possibly starting my own startup) is whether it is hype or not. Maybe it becomes a self fulfilling prophecy that Silicon Valley will always be king if all the best talent moves to silicon valley to start or work with new startups.
The web is a great leveler, but when it comes to securing funding (in a later stage of your project) it really helps if you are in the neighbourhood of potential investors.
Other than that if you're self funded and you have a project that has a clear business driver making money from the start then it might actually be an advantage to not be in an expensive area.
First of all your retention of employees will be higher, second your cost of living and your salaries and expenses will be lower.
Other than that if you're self funded and you have a project that has a clear business driver making money from the start then it might actually be an advantage to not be in an expensive area.
First of all your retention of employees will be higher, second your cost of living and your salaries and expenses will be lower.
Working in an area like silicon valley you have a much greater chance of working for a startup. But to start one and build it into a business is possible anywhere.
But working for that startup is great experience and you see and learn what it takes to be successful.
But working for that startup is great experience and you see and learn what it takes to be successful.
Sure, a lot of successful tech companies come out of Silicon Valley, but there's a disproportionate amount of tech companies in Silicon Valley to begin with. It's certainly not obvious that the success rate is any higher there.
You could use the same argument to "prove" that the hub of any industry is not a particularly good place to do that kind of work. By the same reasoning, LA is not a particularly good place to make movies, or New York to run a hedge fund.
When Steve Jobs and Steve Wozniak were working on their Apple I, Apple II in garage, the hottest computer company then were in Boston like DEC.
Of course both Jobs and Wozniak were lucky to get an angel investor, Mike Markkula, due to Intel's wealth from its IPO.
So the important parts are those:
1. You are good enough.
2. you can meet someone who is rich enough, understands the process of starting a tech company,is willing to risk his/her fortune to help you out while taking a good windfall later, if you are really good.
It is easier in SV. But there are all those people in start up hotbeds. I guess the problem is where and how to meet them. But as we all know. Rich people hates people come forward to ask for money without showing something interesting first.
Of course both Jobs and Wozniak were lucky to get an angel investor, Mike Markkula, due to Intel's wealth from its IPO.
So the important parts are those:
1. You are good enough.
2. you can meet someone who is rich enough, understands the process of starting a tech company,is willing to risk his/her fortune to help you out while taking a good windfall later, if you are really good.
It is easier in SV. But there are all those people in start up hotbeds. I guess the problem is where and how to meet them. But as we all know. Rich people hates people come forward to ask for money without showing something interesting first.
Here's how I've always looked at it. It's retarded to think a startup cannot succeed anywhere. You can do ALL the things you need from the middle of Iowa, and still kill it. Here's what you're NOT given in Iowa? All the opportunities and resources you COULD have. By being in Silicon Valley, you have the maximum amount of opportunity and resources to succeed. Think of it like playing a video game: sure you could win with the basic pistol they give you, but it's probably best to face the game boss with a rocket launcher.
The other main question is scaling a company. If you're doing the typical venture back startup thing, then scaling is a huge issue. You need access to capital and talent to the point you can grow the company from 3=>30=>300 people. That's hard to do, especially on the engineering side outside of most startup hotbeds. If you're in a crappy city for a startup, think right now if you could go recruit 50 of the brightest engineers in the next 18 months there.
So in short a) you don't need to be in the valley to succeed, at least in the short term b) the valley can give you the maximum opportunities c) think about how the current city you're in can help you scale the startup when (or if) it needs to grow heavily, but don't think about it too soon.
The other main question is scaling a company. If you're doing the typical venture back startup thing, then scaling is a huge issue. You need access to capital and talent to the point you can grow the company from 3=>30=>300 people. That's hard to do, especially on the engineering side outside of most startup hotbeds. If you're in a crappy city for a startup, think right now if you could go recruit 50 of the brightest engineers in the next 18 months there.
So in short a) you don't need to be in the valley to succeed, at least in the short term b) the valley can give you the maximum opportunities c) think about how the current city you're in can help you scale the startup when (or if) it needs to grow heavily, but don't think about it too soon.
This whole subject seems to circle around here fairly often and it seems like there's not a clear cut answer. There are some advantages to Silicon Valley and some disadvantages. But at the end of the day you just need to build the right project with the right team. Get those two right and the rest is gravy.
Ok so what is Fred saying here? Defending generalizations by specific examples is fairly pointless. He almost confirmed the argument by citing examples!
"Deep down inside, every entrepreneur working outside of the bay area worries that they are not as competitive and will not be as successful because they are not in Silicon Valley" well, if it is indeed easier to meet people in the Bay Area and to meet other entrepreneurs, then sure you are at a disadvantage being elsewhere. Doesn't mean you won't get anywhere, just means you'll need a different plan.
Generalizations will always have counter-examples and I think it's very silly to take them to heart as I believe Fred did.
"Deep down inside, every entrepreneur working outside of the bay area worries that they are not as competitive and will not be as successful because they are not in Silicon Valley" well, if it is indeed easier to meet people in the Bay Area and to meet other entrepreneurs, then sure you are at a disadvantage being elsewhere. Doesn't mean you won't get anywhere, just means you'll need a different plan.
Generalizations will always have counter-examples and I think it's very silly to take them to heart as I believe Fred did.
This is quite interesting given the "London startup scene is dead, world revolves around Silicon Valley" post by Paul Carr from today too. What gives? You can succeed anywhere; some parts of it may be easier in the Valley, but it's not the only place successful businesses are growing by any means.
I think it all depends on people's personality type. Extrovert will be more successful when he lives in a startup hotbed.
Introvert doesn't need anybody, he can live anywhere he likes.
I've never heard anyone who used this expression offer any evidence or argument to back it up, and this post is no exception.
Till a few months ago I used to live half the time in the Valley and half the time in Boston. I never noticed Boston startups getting any creative boost from not being in the Valley. If anything, it was the opposite: they tended to be constrained by lack of confidence, and by the conservatism of the local investors.