

Startups, you don’t need to be in Silicon Valley - ryancarson
http://ryancarson.com/post/47618850291/startups-you-dont-need-to-be-in-silicon-valley

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minimax
He is mischaracterizing Paul Graham's argument. The argument pg makes is that
if all other things are held equal, your chances of success are higher in
Silicon Valley than they are in other cities, which is not the same thing as
saying that Silicon Valley is the only place you can do a startup.

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RyanZAG
It's fairly common to do this. When someone says 'X is harder unless Y' and
people accept it, then soon everyone doing X must do Y as well. When the
pendulum swings far enough towards Y, people start doing Not-Y and succeed,
pulling the pendulum back.

Basically, Paul Graham's argument about being in a startup hub was so clear
cut a few years ago that everyone doing a startup moved to SV. Now with SV
overcrowded with startups all trying to get the same investments and
publicity, it might actually be easier to start a startup outside of the hub
where there is far less competition for finance and talent.

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saosebastiao
I'm very convinced of Paul Graham's take on this, in that there are positive
network effects to locating near people and organizations like yours.

That being said, I agree with the author...but only because I'm starting to
think that the toxicity level of SV culture is starting to outweigh its
positive network benefits of talent. SV startups are completely overrun by a
TechCrunch mentality of hype-machine backed, poorly conceived products...and
if you aren't funded you are dead. Some startups may thrive in that culture,
but far from all will.

I would argue that you should locate where you get the benefit of colocation
of focused talent, rather than colocation of focused intent. In other words,
if you are a cruise vacation startup, you need to be in Miami, not Cupertino.
And if you are a media startup, you need to be in Los Angeles or New York, not
Mountain View.

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malachismith
Actually.... I would argue that the "TechCrunch / HackerNews" mentality (as
you describe it) is more common OUTSIDE of the Bay Area than it is within it.

In the Bay Area you are surrounded by real world examples of success and
failure, and enough of each so that you can actually derive repeatable
lessons. Outside the Bay Area there is the tendency to believe that if it's
written about on one of these sites it's gospel.

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diego
So he has one data point, therefore generalizes for everyone. That takes away
credibility from the article. Sure, you don't need to be in Silicon Valley.
All you need is luck :)

I've seen many startups benefit greatly from moving to Silicon Valley
(including my own). Sure, you don't need to be in Silicon Valley. However, it
does help tremendously for many types of companies.

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mindcrime
_So he has one data point, therefore generalizes for everyone. That takes away
credibility from the article. Sure, you don't need to be in Silicon Valley.
All you need is luck_

Are you saying you _don't_ need luck if you locate to Silicon Valley???

Anyway, as for the "generalizing to everyone" bit... IF the opposing argument
was actually that you _must_ be in Silicon Valley to be successful, then even
one opposing datapoint invalidates that argument. I'm not sure that actually
is pg's argument though, but nonetheless, every successful startup that exists
outside of SV serves to demonstrate that you certainly can be successful
starting in other places.

 _Sure, you don't need to be in Silicon Valley. However, it does help
tremendously for many types of companies._

I'm guessing it can also hurt for some types as well. If you're doing
something fashion related, for example, you might be better served to be in
NYC, London or even LA.

Beyond that, the higher cost of living, increased competition for technical
talent, etc., could be reasons a given startup would be better off not being
in the valley.

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w1ntermute
Come on, you're getting pedantic. Hacker News and its participants should be
better than that.

> Are you saying you don't need luck if you locate to Silicon Valley???

He's saying you're less dependent on luck for success if you're in SV. The
mean of the "success" probability distribution is shifted towards the right.

> IF the opposing argument was actually that you must be in Silicon Valley to
> be successful, then even one opposing datapoint invalidates that argument.

Nobody reasonable is saying you MUST be in the Valley. They're saying it makes
it considerably easier than being anywhere else on the planet.

> If you're doing something fashion related, for example, you might be better
> served to be in NYC, London or even LA.

Again, we're speaking about all tech startups in general. Nobody is saying
there aren't occasional exceptions.

> Beyond that, the higher cost of living, increased competition for technical
> talent, etc., could be reasons a given startup would be better off not being
> in the valley.

The higher cost of living is not a reason to definitely not be in the Valley
(though it can be a factor). You can learn to live frugally if being an
entrepreneur is that important to you. And the Valley _is_ the best place for
technical talent (among other things important to startups).

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mindcrime
_The higher cost of living is not a reason to definitely not be in the Valley
(though it can be a factor). You can learn to live frugally if being an
entrepreneur is that important to you. And the Valley is the best place for
technical talent (among other things important to startups)._

Sure, although there is a (very big) open question about "how much" being in
the valley shifts the probability distribution towards "success". It would
also be interesting to understand more about exactly which types of startups
benefit most from being in the valley, versus being somewhere else.

Actually, the bigger issue might not be any of this... it might be "assuming I
don't _want_ to live in CA, what are my chances of success in $WHEREVER and
how do I optimize them?"

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arbuge
In some ways I personally think the Valley is a harder place to start a
company these days. The competition for talent and sky high real estate prices
translate to expensive salaries which entrepreneurs have to pay somehow, and
employee loyalty is probably harder to achieve in a place where employees have
so many job opportunities vying for their attention. Those factors make it
harder to get a company off the ground, and harder to keep it going for the
long term, somewhat offsetting the benefit of easier access to capital.

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frankwiles
Agreed, a company's limited startup capital goes a lot further in other
places. Office rent, housing, hell even Internet access and electricity are
cheaper outside of the usual places startups locate. But then you have a
reverse problem of not necessarily having enough talent in the area. However,
if you're open to remote workers (which everyone should be) then that is much
less of an issue.

~~~
mindcrime
_But then you have a reverse problem of not necessarily having enough talent
in the area._

There's no doubt that some areas have a great concentration of talent than
others. But there are definitely plenty of places besides SV where there is
talent aplenty. Look at the Research Triangle Park area of NC... within
something like a 25 mile radius you have 3 major research universities (UNC
Chapel Hill, NC State and Duke), several smaller colleges, including the all-
girl schools and the historically black colleges, Peace, North Carolina
Central, Meredeith, Shaw, St. Augustines, etc., as well as two pretty good
community colleges - Wake Tech and Durham Tech.

One of the suburbs here (Cary) has - if I recall correctly - the highest (or
one of the highest) per capita concentrations of Phd holders of any city in
the US. Yes, in North Carolina... fancy that, huh?

The challenge for startups here, in terms of talent, is to convince local
graduates, and/or people who move here to work for IBM, Glaxo, Cisco, EMC,
etc., to stay here and work for a startup. But the talent is here, and as the
startup culture grows (and it has been growing, markedly so in the past 4-5
years I'd say), that becomes more and more viable.

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jimmaswell
What would you say about New York's concentration of talent, besides around
NYC?

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mindcrime
No clue... haven't spent enough time in New York to really have any insight on
that one. :-(

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ry0ohki
Ryan is already "known" and had a business that was profitable. I'm sure Biz
Stone could raise money in Maine. Try being unknown in Orlando and raising
money for a pre-revenue startup. YRMV

Also $7 million was raised with an office in Portland, which I'd consider a
startup hub.

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raverbashing
Yes

It's a contradiction to establish a company that leverages users all around
the world and then cram the team into a small geographical area together with
similar companies.

"Oh but we want to raise money, financing is there", financing is everywhere.

And you will probably find that you don't need to raise that much money if you
relocate somewhere else, since your employees can get a smaller compensation,
since they don't have to fight for a place to rent.

Your office costs can be smaller as well

And no, you don't have to get your team together all the time, be creative, it
is possible to come up with a product with a remote team. If they can meet a
couple of days per week, even better.

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pc86
Have you tried explaining to a developer (or anyone, for that matter) that
they are objectively worth less in Missouri than they are in San Francisco?

Everyone loves it when they move from the midwest or southeast to the Valley
because they can add a zero to their salary. Nobody moves out of the Valley
precisely _because_ you're subtracting a zero from their salary. It seems
folks are all about factoring in cost of living when it gets them an extra
$40k/year. When it means they should earn less, they just ignore it and refuse
to take a pay cut on principle. That's been my experience, at least.

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raverbashing
Yes, it's really complicated

My personal benchmark is "take home money" which is net salary - rent

Of course some other things help: commuting time, general costs, but also city
opportunities, cultural life, schools, etc

So maybe you can't win them for Missouri, but maybe to Boston area, Seattle,
or some other area (New Orleans or Florida or Texas even maybe)

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felix
Most businesses will succeed based on a variety of metrics, there are
environmental factors that help some of those metrics.

Startups are _hard_ \- setting up shop in a startup hub helps you succeed at
_being_ a startup. There's support and best practices in the air for you at
being a startup, which is super super helpful. SF being the largest and most
robust of these hubs provides probably the greatest support on this front.

Nevertheless, it is sometimes forgotten that startups often don't exist in a
startup vacuum - they interact on a variety of levels with the world and
different locations will help them succeed in these other aspects. If your
startup deals with publishers, being in the location where all those
publishers are helps you immensely. If you deal with fashion being in a
fashion hub helps you. If you're schtick is some fancy machine learning thing,
maybe you want to set up shop by MIT. Etc.

So while generically being in a startup hub will help most startups more than
other locations. Specifically _your_ startup might see greater benefit
elsewhere, or not in SF or whatever. And maybe, just maybe, you don't need
these environmental boosts so just go wherever the hell you want to live. It's
startups, break the rules when you want to - just know what you're giving up
and what you're getting in return.

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nicholassmith
I imagine as time goes on, and remote working becomes increasingly more and
more common, that the notion of packing up and moving to a start up hub will
become more and more rare. There's always going to be cases where it makes
sense to have employees in the office, or a reasonably central hub, but given
the majority of work can be handled from a tropical beach or a snow capped
mountain it's less relevant.

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kjhughes
Agreed about Silicon Valley colocation being unnecessary. I'd go further and
argue that imposed colocation anywhere is unnecessary. For over a decade I've
worked exclusively on distributed teams which came together only during those
times when it was naturally productive to do so. For the majority of the time,
team members worked in distributed locations independently.

Consider Joy's Law [1]:

    
    
      "No matter who you are, most of the smartest people work for someone else"
    

Generalizing, I believe:

    
    
      "No matter where you are, most of the smartest people are somewhere else."
    

Face-to-face productivity gains are easily overwhelmed by losses due to having
restricted the search for team members unnecessarily. Distributed
organizations will win in the future.

[1] <http://en.wikipedia.org/wiki/Joy%27s_Law_(management)>

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thetrumanshow
Ryan, treehouse is an awesome way to learn technical subjects. It looks like
you guys put a tremendous amount of effort into making the quality just
superb. I'm curious if your pricing going forward will change with your focus
on younger students. I have a little one at home who is really jazzed about
the iOS classes, and the price is totally doable but causes a bit of a wince.

Secondly, I have really been wanting to setup a "Computer Club" for young kids
in my town, but I don't have an educators training. Just wanted to say that
this seems like a perfect fit for filling in the gaps of my knowledge by using
your content and get this group up and running.

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willis77
The plural of anecdote is not data.

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nemrow
I've worked at a startup in Santa Barbara CA, and one in the Bay Area. The
reason I push to the Bay is for energy purposes. The inspiration of the
startup community really boosted everyones energy up and pumped us up to work
harder! It easier to work out with others that are working out rather than
doing it alone in your living room.

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bdcravens
Depends on what you're doing. If I were starting up something around the oil
industry, pretty sure I'd want to be in Houston. (Easy access to Austin talent
being a bonus, but that's a tangent)

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malachismith
Just because you don't NEED to be in Silicon Valley to build a successful
venture backed start-up doesn't mean your odds of success are not IMPROVED by
locating there.

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yitchelle
one point the article did not mentioned how often does Ryan travel to the
valley (recruiting drive, meeting potential technology partners, etc).

What I am really saying is that if he frequently travels to the valley, or
some other tech hub, is his generalisation in this article still valid?

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mmahemoff
His argument isn't "stay 1000 miles away from SV at all times". It's common
for founders of more established startups to frequent SV (and other hotspots
depending on industry and event locations), so I don't think it invalidates
the argument if, for example, 5% of the company's total worker-days are spent
in SV.

