Honestly, that sounds like a good thing to me. I find SV startup culture to be degenerate, but it does sound nice to have a large amount of job opportunity in tech industries around.
Putting a large tech investment in a region that values conservative workplace culture honestly sounds perfect to me. I like my cube farm :)
Eh, sort of. As an east-coast resident who has worked for both tech startups as well as large companies, (currently one of the large SV companies), I will say I still view SV as a very different vibe than any work culture I regularly experience here. Anecdotally, my colleagues - past and present - would agree.
SV would be the ideal. I've lived there, loved it, and found a huge melting pot of talent. But tech has to be grown everywhere - there are VC's everywhere, angels everywhere, talent everywhere. It still takes the right people with the right progression of ideas...anywhere.
..alex.
It'll certainly be interesting to watch. I'd like to move to SV, but it's not really practical for me for a variety of reasons. So I'll keep plugging away out here; I don't really need investors (yet), but the idea of having so much technical talent in one place is really what makes Silicon Valley so unique in the world.
If we assume that the premise here is correct (there is some amount of exodus of technical talent from SV), isn't it still a good thing? My impression is that the result of having all the major tech companies located in one region is the development of a tech cultural bubble. The current tech industry has a hard time understanding and relating to the rest of the country/world. Wouldn't we all be better off if they spread out a bit such that they could better represent the entirety of the world?
Well SV is one of the only places where they have these wheelbarrows full of millions of dollars to throw at tech companies, so I would think that location is pretty important if you're interested in VC funding.
I agree with PG and MA and many others that a startup, especially a good one, has a much better shot in a startup hub.
Both the SV infrastructure and mentality value those that build great technology. While it is true that there exist other pockets of this (NYC, Boston, Austin, etc).
SV is not a pocket, it's the entirety of the community and that has massive value.
I've lived in Silicon Valley and did not like it at all. The population density is really high, the rudeness coefficient is really high as well. Everyone I knew was on anti-depressants just because the environment was so tough.
Contrast that with berlin-- a much more healthy lifestyle can be had there, at a lot less cost (both financial and emotional).
The one thing silicon valley has going for it is sand hill road. But I think venture capital is a lot less important now than it used to be-- at least it should be.
Getting a bunch of people who want to create startups together in a geographic area will attract the money eventually.
What countries support this idea? (I'd live in Berlin right now if german immigration wasn't a bear.)
SV isn't the best fit for a lot of startups. It really shouldn't be the default location for all startups especially since there are different options that offer different things (NYC, Denver/Boulder, Austin etc).
The Bay Area has 3 things that set it apart from anywhere else and startups that really need this have no other real choice:
Investors who are willing to invest super early
Lots of top tier engineers
An extremely optimistic culture
Investors- Our startup did fundraising on both east/west coast. Valuations, investor quality and potential help was relatively the same, but those in the the Bay Area were completely fine in investing in a pre-rev idea. That was, and still is inconceivable outside. A NYC fund flatly told us they will do no investments until we reach 50k MRR. That wasn't a requirement at SV and we got the initial seed funding as a result.
We do something very tech heavy and quite at the forefront in our field. We need really good engineers and most these types of specialists currently are employed at a Google or Facebook etc. In theory they should be super expensive and impossible to dislodge from these tech giants but what I find is that these super smart people get bored after a few years. They know their worth and that there will always be high paying jobs for them, but they can be persuaded to join a startup on a lot lower salary because they get a lot of freedom and ability to make a difference. A lot of the people that complain about expensive demanding engineers in SV are basically a bunch of PMs or salespeople who want a CTO to build a front end app. If you actually have interesting tech, finding engineers at a discount is quite feasible.
The last thing is about culture. It's like the YC interview day. We spent the entire day before and after the interview (and snuck in again the next) because the other teams you meet- the optimism and energy is infectious. It's the same feeling the morning of a marathon where you're worried it's too cold and wet, but the instant you see the crowd, everything feels right.
If you're doing something that counter-intuitive, and changes existing thinking, then culture is essential. Most startups, even in the accelerators, are ops businesses. They utilize tech, but business not tech is their key driver. There's nothing wrong with being that kind of startup, but if that is the case, then the Bay Area isn't a good a fit which is what this article says. Your customers aren't there, it's expensive, and there are other options. But if you do have a early crazy idea that is based around a key piece of tech, the Bay Area is still the best choice by far.
SV is the giant sucking sound of the tech industry. More often than not a startup will be founded in a place like New York, Chicago or Boston and then move to SV to try to get VC funding. I think it has very little to do with the ‘culture of innovation’ and more to do with rich white guys willing to splash around money in seemingly longshot businesses. I guess maybe that is what innovation is all about.
In my mind, there is a difference between a tech scene and a startup scene. To me, where I live near Provo, UT is a tech scene. Almost everyone under 40 works for a tech company, some large ones like Adobe or Novell, and many small companies. Most of the small companies are stable. We are not high growth, we are solid small companies making a few million a year for a small group of employees, and have been around for more than 5 or even 10 years. We are not full of VCs. We are full of smart entrepreneurs who quietly work hard and make good livings. We do have a local university, which routinely graduates new people starting new companies.
To me, that is a tech scene.
I see no way that VCs and rapid growth / rapid failing companies would be better than this for the local community. If people want that scene, SV has it, and seems to enjoy it. Fine, more power to y'all. I just see no reason to try to reproduce it.
I agree with your general argument about NYC. SV isn't only where you get "people doing startups for the sake of startups" (although it has that). It is more technology focused and less "all business" like NYC.
Yeah, I've seen that phenomena too - there are an awful lot of people that think moving to Silicon Valley will magically make their startup successful, instead of it just being one of the first steps in a long, long journey.
The nice thing about SV is that there are folks here that actually work on tough technical problems and have the skill to match - Googlers, Yahooglers, Microsofties, researchers at Stanford and Berkeley, etc. Not to mention all the repeat entrepreneurs who have money to invest and are looking for their second big idea. It can sometimes be hard to convince these people to found a startup (well, hard to convince the tech company employees...the repeat entrepreneurs will jump on anything with a reasonable chance of success), but there's talent here.
It's uniquely SV only for those who spend all their life in SV. Go to NYC, go to LA, go to London, go to Tokyo, and you will find very ambitious and driven people working hard on their acting/band/fashion label/non profit/etc. Those people also tend to be way more open about the forms creativity other than their own takes, whereas the SV techie entrepreneurs tend to think that anything other than changing the world with a billion dollar startup is a waste of time.
Which is why on a personal level, after about a decade in SV, I'm very much looking forward to leaving soon, having realized that ambition, fulfilment, and impact can be realized in ways other than yet another iOS or rails app, and am getting tired of the monoculture.
Basing an impression of a region/culture on a movie is just as irrational as basing that impression on a single hackathon.
It makes sense that many of the engineers and companies in SV will be highly accessible to a talented engineer. Engineers like people like themselves, and companies are still looking for top-tier talent.
The question is whether you'll ever be one of the people who makes enough money to make a career in SV worthwhile. Yes, you read a lot about the engineers who succeed there. But that's giving you selection bias.
There are a lot of engineers who fight against the cost of living and grueling work hours, burn out, and leave without making as much as they would have in a different city.
Regardless of where you fall on the spectrum (burnout to Zuckerberg), chances are nearly that you'll be anywhere close to the Zuckerberg end of the spectrum. Starting your own company is a great way to lose a lot of money (yours and others'), and it's delusional to think of them otherwise. It's delusional to gamble on your own talent when talent and meritocracy aren't what make successful startups, and it's delusional to invest vital amounts of time and money in something with a 0.5% chance of success.
That said, if you have a financial safety net, can survive the repeated failures, and don't feel like you can do anything else, starting a company might still be for you.
Well, part of the "do it in the Valley" advocacy is social or VC-oriented. All those alpha geeks in one place make a lot of connections, work together, recommend each other, go to similar events during rare non-work hours, and some even hire each other or found 2nd startups with partners they met working for their previous employer. For me, it's easy to grant the truth of this because the history of how these startups began is public record. I'd rather not try to deny that such connections have great value.
I tend to take a more romantic view, one that says that it doesn't matter so much if you don't live in SV or Cambridge, MA even if the current metrics show that your startup will be more successful in those places.
I wonder whether SV/Cambridge will lose a little pull since VC has dried up a lot. Also, buying a home is going to get a lot cheaper in rural places. Of course, not all cheap places are equal, but what if it truly, really didn't matter where you located? There's crucial things to research like infrastructure, high speed network capability, the reliability of the public utilities. The Midwest US could be a great place to found a startup.
It seems to me the desire to reach ramen profitability by operating cheaply can outweigh the cachet of advice and networking in the meatspace.
I know SV is the center of the current tech boom, but one of the things this time around is the startup economy is much larger and more wide spread. There seems to be many more startups outside of the traditional centers which is good.
While I agree with you that things are different this time, I still suspect that there is a fair bit of growth acceleration coming from startup dollars being recycled back through the startup economy.
I strongly disagree that the high cost of living is beneficial for startups. Keep in mind the very term Silicon Valley comes from chip companies (Fairchild, Intel, etc.) who came to SV because it was cheap, open farm land. There isn't a business in the world that doesn't want to optimize on costs.
Take a look at a modern SV company now: Apple. It creates lots of jobs in SV, but far more in China.
SV succeeds in spite of the costs, not because of them.
This is yet another reason why startups should avoid Silicon Valley. Years ago, the investment climate in SV really was different than elsewhere but that has now changed. Not only are there tech VCs and Angels in other US cities, but they are found throughout the world. You might still have concentrations in particular places, for instance in Canada most action is in Vancouver, Waterloo and Toronto, but that is a far cry from the days when SV was the only place.
Best place to start a new company is where you are right now. That is what Atlassian did and when it made sense for them to be in a different place, they just moved. Second best place is any city where there is a concentration of tech industry but that could be in Vancouver, Berlin, Moscow (Skolkovo) or London (Old Street). You have a choice.
And if your business is growing and beginning to have a local impact, and you are senior management there, then you really should start thinking about how you can improve the local area for everyone, which is a traditional activity of larger successful companies. Spend money on civic projects. If you need better bus service, lobby for it rather than sidestepping the competition. Politics is a different game from business and if you fail to recognize that and act appropriately, then you deserve the brickbats that will be thrown at you.
I'm reminded of when IBM was the big bad boy, and Microsoft was the cool new upstart. Then Microsoft became the bad boy and Google was the cool new upstart. From the sound of things, Google is now sliding into bad boy territory.
I strongly agree. Nonetheless, many places aspire to be a second Silicon Valley, and it's certainly worthwhile pointing out how close or far away they are from that goal. In particular, those behind Station F probably want their project to develop in a SF/US-like direction.
It would be interesting to see if there can be a third way - an attractive location for startups with a culture that is open to entrepreneurship without being overly obsessed with quick unicorn money and without being entirely dominated by startups and VCs?
Putting a large tech investment in a region that values conservative workplace culture honestly sounds perfect to me. I like my cube farm :)
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