5 Reasons to Move Your Startup Out of Silicon Valley(gigaom.com)
gigaom.com
5 Reasons to Move Your Startup Out of Silicon Valley
http://gigaom.com/2008/09/10/5-reasons-to-move-your-startup-out-of-silicon-valley/
36 comments
I'm not really sure what you're getting at with your retort.
1. The claim was that in crappier weather people tend to stay in and work instead of lounging about in the sun. That's not to say that this is true, but simply stating that SV has good weather is missing the point.
2. Just because there are lots of people in the Valley to recruit doesn't mean they are automatically better than workers from elsewhere. The ease at which you can fill your company with seemingly qualified people is not tied with how good of a product of how successful a company will be. The article makes a good point about ship jumping and spiking salaries.
3. Your again confusing quantity with quality. You'll still be groveling to get a chance to present at any of the top level VC's in SV and since there are a lot more presentations being made, the chances that they've seen same idea you're trying to present three times already that week means you'll still likely have to settle with the bottom of the VC pile. That is unless you have a good idea and a good presentation in which case top VC's in Boston, Tel Aviv or any other place would be just as happy to have you. This is all besides the fact that plenty of successful startups bootstrapped themselves to success.
4. A startup does not need to 'Exit' in order to be successful. Not all startups have the goal of hoping that Google/MS/Yahoo/Ebay will one day look down pick them as the prettiest girl at the dance, some startups want to be the ones doing the picking and plenty are fine just making decent money doing something they love. A narrow focus of an Exit only strategy puts many startups in an early grave despite good chances of becoming successful in other ways.
5. Good board members can be found just about anywhere on the planet and with teleconferencing technology as it is now, being located in the same city as every board member is not necessary and actually might be a hindrance. Besides that, I'm not quite sure what three other bubbles happened in SV other than the Dot Com one?
There are plenty of good reasons to startup in SV, but that don't make it the only place where a startup can be successful.
1. The claim was that in crappier weather people tend to stay in and work instead of lounging about in the sun. That's not to say that this is true, but simply stating that SV has good weather is missing the point.
2. Just because there are lots of people in the Valley to recruit doesn't mean they are automatically better than workers from elsewhere. The ease at which you can fill your company with seemingly qualified people is not tied with how good of a product of how successful a company will be. The article makes a good point about ship jumping and spiking salaries.
3. Your again confusing quantity with quality. You'll still be groveling to get a chance to present at any of the top level VC's in SV and since there are a lot more presentations being made, the chances that they've seen same idea you're trying to present three times already that week means you'll still likely have to settle with the bottom of the VC pile. That is unless you have a good idea and a good presentation in which case top VC's in Boston, Tel Aviv or any other place would be just as happy to have you. This is all besides the fact that plenty of successful startups bootstrapped themselves to success.
4. A startup does not need to 'Exit' in order to be successful. Not all startups have the goal of hoping that Google/MS/Yahoo/Ebay will one day look down pick them as the prettiest girl at the dance, some startups want to be the ones doing the picking and plenty are fine just making decent money doing something they love. A narrow focus of an Exit only strategy puts many startups in an early grave despite good chances of becoming successful in other ways.
5. Good board members can be found just about anywhere on the planet and with teleconferencing technology as it is now, being located in the same city as every board member is not necessary and actually might be a hindrance. Besides that, I'm not quite sure what three other bubbles happened in SV other than the Dot Com one?
There are plenty of good reasons to startup in SV, but that don't make it the only place where a startup can be successful.
I love these kinds of retorts-to-the retorts. Let's start.
1. Yeah, he didn't miss the point though. Better weather means people take good weather for granted, and don't get all gah-gah about it. The keep working, even on sunny days. Californians on the beach? Sure, there are a few, but mostly in the dreams of people who don't live here.
2. The claim was that there are lots of better people. You're right, they aren't automatically better (did he say that?). But there certainly are a lot of great ones, who didn't get that way automatically, but did so with training and experience and exposure.
3. More options is generally not a bad thing. Someone even won a Nobel prize for showing that to be true. Who are we to argue with a Nobel prize winner?
4. Exit is an option. Again, options are good. Where did the guy say you "need" an exit to be successful? I missed that part. Oh, and speaking of prettiest girls at the dance, in Silicon Valley, well, actually, never mind, but trust me, it is just a nice part of the country.
5. Again, I missed the part where she/he said it is the "only" place where a startup can be successful. Good board members can be found anywhere, but they can be found here more often, in greater numbers, through more contacts, with a greater diversity of interests. And teleconferencing works here, too!
6. It's in the Bay Area, which is actually kind of OK in terms of attracting people. Hope the link works. To be fair, it's not a picture of Silicon Valley proper, but of the Bay Area, of which Silicon Valley is a part:
http://flickr.com/photos/22779657@N00/1697466173/sizes/l/in/...
1. Yeah, he didn't miss the point though. Better weather means people take good weather for granted, and don't get all gah-gah about it. The keep working, even on sunny days. Californians on the beach? Sure, there are a few, but mostly in the dreams of people who don't live here.
2. The claim was that there are lots of better people. You're right, they aren't automatically better (did he say that?). But there certainly are a lot of great ones, who didn't get that way automatically, but did so with training and experience and exposure.
3. More options is generally not a bad thing. Someone even won a Nobel prize for showing that to be true. Who are we to argue with a Nobel prize winner?
4. Exit is an option. Again, options are good. Where did the guy say you "need" an exit to be successful? I missed that part. Oh, and speaking of prettiest girls at the dance, in Silicon Valley, well, actually, never mind, but trust me, it is just a nice part of the country.
5. Again, I missed the part where she/he said it is the "only" place where a startup can be successful. Good board members can be found anywhere, but they can be found here more often, in greater numbers, through more contacts, with a greater diversity of interests. And teleconferencing works here, too!
6. It's in the Bay Area, which is actually kind of OK in terms of attracting people. Hope the link works. To be fair, it's not a picture of Silicon Valley proper, but of the Bay Area, of which Silicon Valley is a part:
http://flickr.com/photos/22779657@N00/1697466173/sizes/l/in/...
4. Companies in Boston exit plenty of times too. Equallogic just got bought by Dell for $1.4B. Avici went public; my friend's dad was a cofounder there, and cashed out his stock in 2000 right before the market tanked. Akamai is also public. Avid is public. CCBN was bought for $50M by Thompson Financial. My math teacher started a company and got bought out for a few decamillions after 3-4 years.
You just don't hear about the acquisitions & IPOs because they aren't consumer Internet companies. They happen though, and they're for just as much money - or sometimes more - than their SV equivalents.
You just don't hear about the acquisitions & IPOs because they aren't consumer Internet companies. They happen though, and they're for just as much money - or sometimes more - than their SV equivalents.
6) You won't get caught in the bubble - 95% of Internet users have never heard of Google docs, even fewer have tried it.
Once Google feels comfortable enough with Docs that they put a little link to it on Google.com below the search box (like they did with Chrome for example), what do you think that percentage will be after a few months?
I've seen this argument for why Chrome is going to be a big deal and I don't buy it. Some subset of people click on links and use/buy things just because they are there. The rest of the world does it to solve a problem (real or perceived).
How many ways has MS encouraged upgrading to IE7, yet STILL 50% of salesforce.com users are using IE6. From 2001. For them (or the people with the authority to upgrade), the browser just simply isn't broken enough to warrant the pain of upgrading.
Exactly how much does MS-Office have to suck before people shift to Google Docs? A lot more than it does now.
How many ways has MS encouraged upgrading to IE7, yet STILL 50% of salesforce.com users are using IE6. From 2001. For them (or the people with the authority to upgrade), the browser just simply isn't broken enough to warrant the pain of upgrading.
Exactly how much does MS-Office have to suck before people shift to Google Docs? A lot more than it does now.
Some subset of people click on links and use/buy things just because they are there. The rest of the world does it to solve a problem
Do you have data to back this up? My anecdotal experience with every person I know from my grandma to my niece to my girlfriend suggests exactly the opposite behavior.
The rest of the world clicks on links and uses/buys things just because they are there, and some smaller subset of people do it to solve a problem. ;-)
Do you have data to back this up? My anecdotal experience with every person I know from my grandma to my niece to my girlfriend suggests exactly the opposite behavior.
The rest of the world clicks on links and uses/buys things just because they are there, and some smaller subset of people do it to solve a problem. ;-)
I think the data from Microsoft's effort to get people to upgrade to ie7 over the last few years is pretty compelling. IE6 seems to be holding on-- presumably because most people don't really see it as broken or needing dramatic improvement.
IE6:IE7 :: MS Office:GDocs is not the best analogy. Lots of people stick with IE6 rather than go to IE7(or FF or Chrome or..) because, for what they do, IE6 is 'ok'. I'll hazard a guess that lots of average web users don't even care about tabs leave alone CSS implementation details. And so, IE6 is 'ok'.
One could argue that MS Office 'sucks' just by costing more than GDocs which is free. If Google wasn't so opaque about what their plan for GDocs is... maybe they should go at it more whole-heartedly and promote it and then see what happens.
One could argue that MS Office 'sucks' just by costing more than GDocs which is free. If Google wasn't so opaque about what their plan for GDocs is... maybe they should go at it more whole-heartedly and promote it and then see what happens.
Heh-- Office does cost, tho I think MS does a stellar job of hiding it. Of course, they are trading one "suck" for another. Web based Office efforts are pretty freakin' painful, IMO.
I agree. I think that a lot of the people using IE6 are in corporate environments and they can't upgrade until senior management make the decision. When they do upgrade, I reckon the majority won't be to Chrome, but to IE7, as there will be too many corporate Intranet apps that will "just work" on IE7 but take extra time to get functioning on Chrome or Firefox. The risk and cost will be too high for them to change.
As I commented on that post, Atlanta is now a city to consider. A flurry of tech events and startup community activities have grown in the last year. For the past 2-3 weeks I've attended 3 or so tech events each week. Things like "Open Coffee", Tweetups, Web Entrepreneurs meetings, Ruby Users Group, Startup Dinner..
Atlanta is not a city to consider.
I started to write an argument, but then I found someone already wrote it for me: http://blog.jeffhaynie.us/whats-wrong-with-the-atlanta-start...
Some other observations about non-The-Bay-Area places:
A: You don't have immediate access to important companies. The huge companies are largely open out here (minus Apple). You can go to a meetup, talk to people from Yahoo and Google about improvements to their products within reason then see your change show up fairly soon.
B: You don't have a large concentration of brilliant people. By large I don't mean a campus, but rather a 50 mile stretch of smart people working on projects and products the rest of the world consumes daily.
C: Your startup dinner doesn't cost $90 per person: http://startup2startup.com/
You can have all the YouTube meetups and ATDC events you want, but the next Google isn't going to decide "hey, let's base ourselves in Atlanta."
(Also, a Tweetup, Stammy? Really? Tweetup?)
I started to write an argument, but then I found someone already wrote it for me: http://blog.jeffhaynie.us/whats-wrong-with-the-atlanta-start...
Some other observations about non-The-Bay-Area places:
A: You don't have immediate access to important companies. The huge companies are largely open out here (minus Apple). You can go to a meetup, talk to people from Yahoo and Google about improvements to their products within reason then see your change show up fairly soon.
B: You don't have a large concentration of brilliant people. By large I don't mean a campus, but rather a 50 mile stretch of smart people working on projects and products the rest of the world consumes daily.
C: Your startup dinner doesn't cost $90 per person: http://startup2startup.com/
You can have all the YouTube meetups and ATDC events you want, but the next Google isn't going to decide "hey, let's base ourselves in Atlanta."
(Also, a Tweetup, Stammy? Really? Tweetup?)
Ah yeah that's Jeff's post. That caused some noise here, things are changing for the better after that post.
Don't hate on tweetups. Drinking beer with tech nerds is what it's all about right? I mean, what do you do after work?
Don't hate on tweetups. Drinking beer with tech nerds is what it's all about right? I mean, what do you do after work?
Gratuitous cutesy terminology bothers me. As for what I do after work, I signed an NDA with myself so I can't talk about it.
But, Atlanta still can't compare to out here. You mention "things are changing for the better after that post," but one post can't change an entire region's attitudes and expectations about startups. Any change you've seen is a result of a localized echo chamber effect.
If you hang out with the right 20 people, change appears to be happening. The systemic issues of the region not understanding startups or being technologically inclined enough isn't fixable in any reasonable timeframe.
Of course, none of this matters if you go ahead and be successful anyway.
But, Atlanta still can't compare to out here. You mention "things are changing for the better after that post," but one post can't change an entire region's attitudes and expectations about startups. Any change you've seen is a result of a localized echo chamber effect.
If you hang out with the right 20 people, change appears to be happening. The systemic issues of the region not understanding startups or being technologically inclined enough isn't fixable in any reasonable timeframe.
Of course, none of this matters if you go ahead and be successful anyway.
Ignoring the conversation at hand, the reason why I'm going to stay in Atlanta for the next few years: For an affordable rent price I have a badass apt in the middle of the city in a highrise with a concierge and locked gates and assigned parking spot included for free.. I would never, ever be able to have even half those amenities if i moved to the valley. SV is for me, but when I have real money.
6. It's much cheaper to live here in Boston than in San Francisco.
That being said, I have been to SF a few times, I love it, and we plan to move there once we are making enough money that it doesn't have a significant impact on our bottom line.
That being said, I have been to SF a few times, I love it, and we plan to move there once we are making enough money that it doesn't have a significant impact on our bottom line.
It's much cheaper to live here in Boston than in San Francisco.
It is? I've lived in both Cambridge and SF and I thought the rental prices in the city were about the same. My apartment in San Francisco is cheaper than my apartment in Cambridge.
Maybe it is cheaper to buy in Cambridge/Boston?
It definitely seems cheaper to buy a place in Boston's burbs than it is in Silicon Valley, Marin, the Peninsula or the East Bay. A friend bought a gigantic McMansion out by Concord for $600K. A house that size 15 miles out of SF or San Jose would be $2-10 million depending on the town.
It is? I've lived in both Cambridge and SF and I thought the rental prices in the city were about the same. My apartment in San Francisco is cheaper than my apartment in Cambridge.
Maybe it is cheaper to buy in Cambridge/Boston?
It definitely seems cheaper to buy a place in Boston's burbs than it is in Silicon Valley, Marin, the Peninsula or the East Bay. A friend bought a gigantic McMansion out by Concord for $600K. A house that size 15 miles out of SF or San Jose would be $2-10 million depending on the town.
> A friend bought a gigantic McMansion out by Concord for $600K
Can't do that anymore. Everything in Concord is over a million now. Same with Lexington & Carlisle. Bedford still has a few in the $600K range (our next-door neighbors bought their house for $615K, and the house across the street sold for $630K), but the bulk of the houses here are over a million too.
I'm amazed by the home price appreciation here. When I was a kid, in elementary & middle school, a cheap house was $60K, a pretty decent one was $200K, and you were rich if you had one that cost $400K. Now, $400K is the minimum to get anything in town, a decent house is $600K, and a McMansion is about $1.3M.
Can't do that anymore. Everything in Concord is over a million now. Same with Lexington & Carlisle. Bedford still has a few in the $600K range (our next-door neighbors bought their house for $615K, and the house across the street sold for $630K), but the bulk of the houses here are over a million too.
I'm amazed by the home price appreciation here. When I was a kid, in elementary & middle school, a cheap house was $60K, a pretty decent one was $200K, and you were rich if you had one that cost $400K. Now, $400K is the minimum to get anything in town, a decent house is $600K, and a McMansion is about $1.3M.
So Boston hasn't started to get pwned yet?
I can't till the housing market reverts to normal prices and all the people who drove it up get shredded. Manhattan has been slow to come around, but when it does, I'm expecting pure beauty.
I can't till the housing market reverts to normal prices and all the people who drove it up get shredded. Manhattan has been slow to come around, but when it does, I'm expecting pure beauty.
It has. That $630K price is down from $990K at the height of the bubble. Concord houses were about $2-3M in late 2005 and early 2006.
Our all in burn rate is roughly 3k per month in the Boston area. All else equal, in SF it'd be close to double that.
The resources spent moving a company from CA to Boston would probably dwarf the savings. Perhaps he meant "5 Reasons To Start Your Startup Outside Of The Valley".
Having lived in SF and moved away, I find it near painful to go back. People really do get caught up in the tech bubble there and have trouble connecting with the rest of the world.
Having lived in SF and moved away, I find it near painful to go back. People really do get caught up in the tech bubble there and have trouble connecting with the rest of the world.
I can certainly agree with the first statement here.
"... All tech startups need just a few ingredients to germinate: sophisticated money; first-rate technology universities; and a few template successes ..."
True.
At a local perlmongers meet some years ago Brent Chapman of Majordomo fame http://en.wikipedia.org/wiki/Majordomo_(software) "who wrote this as his first Perl hack", talked about how there is nothing stopping you creating a Startup anywhere but in SV things just happen a lot faster due to the concentration of knowledge, facilities and people.
Another thing he commented on. Debugging some obscure bit of code and talking about it while eating out there's a greater chance the staff are aware of a potential solution. New York has out of work actors working in Coffee shops. SV has developers. So areas that are outside major Startup clusters this could effect your success.
True.
At a local perlmongers meet some years ago Brent Chapman of Majordomo fame http://en.wikipedia.org/wiki/Majordomo_(software) "who wrote this as his first Perl hack", talked about how there is nothing stopping you creating a Startup anywhere but in SV things just happen a lot faster due to the concentration of knowledge, facilities and people.
Another thing he commented on. Debugging some obscure bit of code and talking about it while eating out there's a greater chance the staff are aware of a potential solution. New York has out of work actors working in Coffee shops. SV has developers. So areas that are outside major Startup clusters this could effect your success.
[deleted]
>> 2.You can recruit better outside the fishbowl.
I agree with this from experience!
I agree with this from experience!
I wonder how many of the TC50 companies are in the valley (I'm too lazy to count right now)
6. You want to fail.
6. You must always be on guard about avoiding "group think". It's so easy to get caught up in talking about and doing the exact same failing approach as so many others. Other parts of the country won't afford you the luxury of developing another facebook app or firefox plugin. You'll need a better business plan and maybe even some customers and revenue.
You don't want to be a frog boiled alive because you never noticed that the water was getting hotter while you plugged away without any sanity checks.
You don't want to be a frog boiled alive because you never noticed that the water was getting hotter while you plugged away without any sanity checks.
[deleted]
1: The weather is great and winter is a place on the Nevada/California border you go visit. People don't translate frustration with shitty weather into frustration at work.
2: There is not better place to recruit than the valley. End. Of. Story.
3: More VCs and better options if you decide to cut out the maze bullshit and just head for the goal. You won't spend your time groveling for intros to the few Boston VCs who do not have their heads firmly wedged up their ass.
4: Exit is an option. Unlike Boston, companies in the valley occasionally get bought.
5: There are academics available as board members and even (gasp) real net-savvy business execs who have been through three or four bubbles and can provide you with more than an ivory-tower viewpoint.