

Is New York a bad place to set up shop? - karzeem
http://paulgraham.com/siliconvalley.html

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karzeem
Obviously, Silicon Valley is the capital of the startup world. But would a
startup that's successful there fail in New York?

My wariness about the Bay Area is mainly related to groupthink. Being
surrounded by people who are all in the same industry, thinking about the same
issues, talking about the same things, has obvious benefits. At the same time,
it seems that the only companies that succeed, whether they're based in the
Bay Area or not, are the ones that ignore an important piece of conventional
wisdom. And that seems like it would be harder to do when you're immersed in
it. If you don't want to drink the Kool-Aid, you should have some hesitation
about moving to the factory.

The upside of New York specifically, and Boston too (besides the fact that
they're beautiful, vibrant cities), is the cross-pollination you get by being
in touch with different cultures and industries. In the right circumstances,
that benefit could greatly outweigh the value of being in a place that has
bigger-name VCs and contacts.

And lastly, Google's second-biggest office is in New York, so that may be the
beginning of something very important there.

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pg
Empirically the advantages of concentration are bigger than the disadvantages,
and this applies as much when comparing NYC and the Bay Area as Detroit and
NYC.

Google's NY office doesn't signify anything in particular. They knew a lot of
smart people were trapped on the east coast, e.g. by family stuff, so they
established an office here. They put it in NYC because they already had an ad
sales office there. I think that was a mistake, actually; Boston is a much
more Googly place than NYC.

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danielha
The Google in Cambridge is a pretty substantial operation and I believe it's
growing quite fast.

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rms
It comes down to raising money... New York's great, but it's exponentially
easier for a social networking site to raise money in the Bay Area.

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karzeem
There are so many variables to tease apart, though. Are more companies raising
money out west just because there are more good companies out there? And the
fact that companies are more likely to get funded in the Bay Area doesn't
necessarily mean they are better companies. It might just be that angels and
VCs are looser with money out there.

One really useful metric in all of this would be comparing the Bay Area's
percentage of VC-backed startups that actually succeed to that of Boston and
New York. That would help cut right to the long-term relevance to success that
funding has in the first place. (The idea being that bad companies are
unlikely to succeed even if they do get funding and that good companies are
likely to get funding even if they're outside the Bay Area).

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rms
Some companies know in advance that their business model requires raising
money. It doesn't make sense for those companies to not locate themselves in
the Bay Area.

Everyone else is much more flexible.

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gibsonf1
My vote is for San Francisco to become the new startup capital. Why not? :)

