
A Non-Local Revolution - ph0rque
http://www.aaronsw.com/weblog/nonlocal
======
mattmaroon
People make the mistake of looking at "internet companies" as a type of
business (like clothing store in a mall) rather than any number of types of
businesses using a common delivery service. It's no more useful to lump
together every company that uses the internet to deliver/sell a service or
product to customers than it is to do the same with every company that mails
things via UPS.

If you define startup as anyone making money in a scalable fashion over the
net, there are tens of thousands of them scattered all over the globe,
including dudes who sell stuff on ebay, dudes who buy Adsense links to market
affiliate products, etc.

~~~
pg
Like any non-mathematical word, "startup" isn't precisely defined, but common
usage requires the company to be more scalable than most dudes selling stuff
on eBay.

If you want to see what the degree of clustering is, the way to do it is to
set some threshold and draw dots on a map for everyone over it. Tech IPOs are
one such threshold; founders in the Forbes 400 is another; if you draw these
maps and you find the dots are evenly scattered, you've got a counterexample.

~~~
webwright
As an exercise in research outsourcing, I found a list of 2008 technology
acquisitions and paid some random person on Mahalo Answers $30 to research
where those companies were when they got bought. I'm going to drop them on a
Google Map, but I was quite surprised at how global they really were.

I'm also going to do it for 2007 (what's another $30?).

Here's the 2008 list. Once I do it for 2007, I'll map it out. Out of 106, 81
of them were outside of the Valley. There might be a few more, as I don't
recognize all of the towns clustered around the valley. It would be
interesting to plot exit events over time-- I'd guess that we're trending
towards LESS clustering rather than more.

Moniker - Pompano Beach, Florida, United States Bodybuilding.com - MERIDIAN,
Idaho, United States CleverSet - Seattle, Washington, United States
Anywhere.FM - San Francisco, CA, United States Audible - 160 employees split
between its headquarters in Newark, NJ and an office in London, UK. Maven
Networks - Boston, MA, United States FoxyTunes - Israel Vehix- Salt Lake City,
UT, United States HotOrNot - San Francisco, CA, United States Compete -
London, UK BlogDigger - Washington, D.C., United States Auctomatic - San
Francisco, CA, United States BeInSync - Tel Aviv, Israel Prospero -
Burlington, MA, United States Social Platform - Los Angeles, CA, United States
Pluck - Austin, TX, United States Bebo - San Francisco, CA, United States Sway
- Middleton, WI, United States buy.at - London, UK YaData - Tel Aviv, Israel
Weblistic - Fremont, CA, United States XIV - Tel Aviv, Israel Apertio -
Bristol, UK Onaro - Boston, MA, United States MySQL - Uppsala, Sweden
Trolltech - Oslo, Norway Fraud Sciences - Tel Aviv, Israel E-Dialog -
Lexington, MA, United States MessageOne - Austin, Texas, United States
G-Technology - Santa Ana, CA, United States Danger - Palo Alto, CA, United
States Caligari - Mountain View, CA, United States Twhirl - Germany Pageflakes
- San Francisco, CA, United States Sphere - San Francisco, CA, United States
Farecast - Seattle, WA, United States Activeweave - San Francisco, CA, United
States Fleaflicker - Tenafly, NJ, United States Expensr - San Francisco, CA,
United States gBox - Cupertino, CA, United States MeeVee - Burlingame, CA,
United States Inquisitor - Sunnyvale, CA, United States Cnet - San Francisco,
CA, United States Ars Technica - Chicago, Illinois, United States StarBrand
Media - Los Angeles, California, United States M:Metrics - Seattle, WA, United
States Celebrity Baby Blog - New York, NY Snapvine - Seattle, WA, United
States SwapDrive - Washington, D.C., United States Hostopia.com - Mississauga,
ON, Canada Imity - Copenhagen, Denmark Rupture - San Francisco, CA, United
States ZYB - Copenhagen, Denmark StarNet Interactive - Tel Aviv, Israel Plazes
- Berlin, Germany Adify - San Bruno, CA, United States Personifi - Fort Worth,
TX, United States Navic Networks - Waltham, MA, United States Gracenote-
Emeryville, CA, United States Simple Star - San Francisco, CA, United States
Diligent - Framingham, MA, United States EDS - Plano, TX Hands-On Mobile Korea
- San Francisco, CA, United States B-hive Networks - Herzliya, Israel OpenAir
- Boston, MA, United States Let It Wave - Paris, France Practique Associates -
Bracknell, UK MusicGremlin - New York, NY, United States Skywire - Las Vegas,
NV, United States Symbian - N./A Alltel - Little Rock, Ark, United States
Helio - Los Angeles, CA, United States Iomega - San Diego, CA, United States
Powerset - San Francisco, CA, United States Weather Channel - Atlanta,
Georgia, United States HaloScan - N/A Imagekind - Seattle, WA, United States
Truemors - Palo Alto, CA, United States ContentNextMedia - Santa Monica, CA,
United States PodTech - Palo Alto, CA, United States jkOnTheRun - Houston, TX,
United States Omnisio - Atherton, CA, United States AbeBooks - Victoria,
Canada DailyCandy - New York, New York Blogcritics - San Francisco, CA, United
States Ciao (Greenfield Online) - Connecticutm, MA, United States social.im -
San Francisco, CA, United States Peerflix - Palo Alto, CA, United States
Napster - Los Angeles, CA, United States YoVille - N/A PartnerUp - Shoreview,
MN, United States Socialthing! - Boulder, CA, United States ZAO Begun -
Moscow, Russia Pure Networks - Seattle, WA, United States Jabber - Denver, CO,
United States Ribbit - Mountain View, CA, United States PostPath - Mountain
View, CA, United States Lefthand Networks - Boulder, CO, United States Bitwine
- Tenafly, New Jersey, United States Bill Me Later - Omaha, Nebraska, United
States DBA - Denmark Polldaddy - Sligo, Ireland JungleDisk - Atlanta, GA,
United States Wayport - Austin, Texas RuTube - Moscow, Russia Clickpass - San
Francisco, CA, United States Revolution Health - Brooklyn, NY, United States
socialmedian - New York, NY, United States AdEngage - Los Angeles, CA, United
States acerno - New York and San Francisco based. Lookery - San Francisco, CA,
United States Centennial - Wall, NJ, United States

~~~
robg
I think you've reinforced pg's point - 24/106 (~20%) is a huge effect as
compared, like you've done, to every other place on the planet. Basically,
from this data, if you're a tech company and want to eventually get acquired
would you rather choose a 1 in 5 chance or, based on a quick guess at second-
best - NY area (7 in 106) or MA area (8 in 106), a 1 in ~15 chance?

Great idea. I'd love to see 2007 as well.

~~~
jdale27
"N% of startups acquired were located in city X" does not mean "startups
located in city X have an N% chance of being acquired".

~~~
robg
Take the data at face value (irrespective of whether it's the right data).
More deals are going to SV and by a significant margin. You can parse
causality any way you'd like (funding, connections, etc.) but that's a
correlational point in the Valley's favor. Given everything else we know about
the region, we don't have to work hard to see the effect.

More problematic, the data doesn't show N% because we don't know the
denominator. It could be that SV is terribly inefficient at exits relative to
a place like Austin or Israel. Still, the magnitudes are so different it
doesn't really matter one way or another.

------
andreyf
_commercializing whatever new discoveries the boffins throw off is as
straightforward as building a new airport_

Is he being facetious? I've never built a new airport, but I can't imagine it
being straightforward.

~~~
pg
You don't have to solve novel problems. If the People's Republic of Whatever
wants an international airport, all they have to do is hire one of the big
international engineering firms, and they'll build them an industry standard
airport. Commercializing a new drug appears to be similar in the sense that
you can fly in a bunch of outside experts to take you from initial discovery
to drug company.

------
davidw
Since it's short, I'll repost my comment from his site here, because I'm
interested in this for my own purposes (business idea):

> At first they made the salsa in their kitchen and sold jars through their
> bedroom window

Is that legal?

... and since it probably isn't, I wonder how one _would_ go about doing a
canned food business.

~~~
nolanbrown23
If they had known it was illegal, do you suppose they would have done it? If
they wouldn't have, then there would be one less salsa company and the jobs
for that company never would have been created.

The people who living in fear of something being illegal, use it as a crutch
to never do anything. It's far easier and economical to just do whatever you
need to do, so long as no one or nothing is being harmed in the process.
Following the rules is expensive and pointless when you're small.

~~~
davidw
I'm just curious about the food industry, I don't want to get into some debate
about people's philosophy of government. I'd be interested to hear if anyone
actually knows something of what it takes to sell canned food.

> so long as no one or nothing is being harmed in the process.

Ever had a case of food poisoning? I had a Subway sandwich once, where I think
the mayo had been left outside in the Arizona sun, and _boy_ was that a mess
for the next 24 hours. Whether you support regulations or not, food is
something people need to be careful with.

~~~
nkurz
> I'd be interested to hear if anyone actually knows something of what it
> takes to sell canned food.

I recently had a friend who was starting a business selling 'canned' jars of
BBQ sauce. At least here in California, the answer is that there wasn't a
feasible way to do it legally in the commercial kitchen we were sharing. His
solution was to outsource production to a large facility that was already
certified for production.

------
steadicat
I think he's missing the fact that even non-tech startups can benefit from
being in the Valley.

In fact, I'd say most of the things startups need to thrive are not technology
specific: many daring investors, a large pool of potential hires primed to
work for equity, marketing/sales/legal advice and motivation and moral support
from being around other entrepreneurs.

------
biohacker42
pg's article has been on my mind since yesterday. And I keep thinking how most
jobs are in fact created by small and medium sized businesses. And startups
really are just small businesses.

~~~
tokenadult
I like pg's reply above that a start-up is a SCALABLE small business. I'm
still learning how to run a start-up. I've been running a small business for
most of my working life.

~~~
biohacker42
That is a very good point. Ironically enough I was first hire at a
biotechnology startup which turned out be a small business. It stayed in
business but it failed to scale.

