
On Business Madness - ssclafani
http://al3x.net/2012/02/12/on-business-madness.html
======
dsr_
_There are good reasons to start a company in a particular place, or to move
your company from one place to another. “Because everyone else has” is not one
of them._

Some of the good reasons which depend on "everyone else has":

* Your business model depends on providing physical services to those other businesses. (Gold rush, Levi's jeans.)

* You are planning on acquiring employees from the people who are already in the area. (Most startups in SV/SF.)

* You already live there because you went to where the jobs were.

~~~
tptacek
There are compensating factors that make up for the relative sparsity of
talent outside SFBA. SFBA talent is unusually expensive and talent acquisition
in SFBA is more uncertain than in other areas. (We have an office there; we
are hiring constantly in all three locations).

There are kernel hackers, Javascript engine developers, 2D graphics virtuosos,
database engine designers and software security freaks in Cleveland and
Dallas, and AmaGooBookSoft isn't competing with you for them.

There are good reasons to base out of SFBA (selling to tech companies is one
of them). I'm not sure recruitment is a clear cut win, though; at least, not
for indies.

~~~
rbranson
I think that for medium sized (250+) tech companies with solid funding it
starts to just become difficult to NOT be recruiting in the Bay Area simply
because there are so many engineers constantly churning and the statistics
start to work against you without including the area in your talent pool.

That said, for smaller companies, I still believe the chances of getting
everyone under the same roof are much higher in the SFBA as well as in other
large, dense cities; only a few of which exist in the US and none of them
being particularly cheap. There's a reason successful companies are willing to
continue to pay the premium decade after decade for locating in big cities:
it's worth it.

Overall though I think the point Alex was trying to make is that the exact
location is unlikely to be a make or break for early stage startups. Pick a
city with a solid background in your chosen field and it can be a launchpad
for a successful company.

~~~
tptacek
In every class of YC to date, every company, do you need more than two hands
to count the number of companies that broke 100 employees?

------
jacques_chester
_How can we be like the successful ones and not like we are: tired, confused,
scared, not-rich? Just tell us the secret. There is a secret, right? There
must be. They make it look so easy._

I see this a lot in weight training. My hobby is Olympic-style weightlifting.

Everyone is looking for the One True Training Method. But there isn't one, not
really. There are a few major "schools" of thought (the Russians, the
Bulgarians, the Chinese), but when transplanted from their original context
they tend not to produce exciting results.

There is no secret to Olympic weightlifting. Consistent practice, attention to
detail, control of your emotions and the willingness to be prepare are the
basis of the sport. It's also the basis of other sports and, by loose analogy,
business and life itself. Then, of course, "time and chance happeneth to them
all".

The best weightlifters and coaches got that way by thinking for themselves, by
experimentation, by observation -- not by rigidly following someone else's
plan.

------
champion
This quote is money: "Startup founders love to obsess about location. Worrying
about where in the world to start your company is a wonderful way to defer the
terrifying prospect of working really hard on it and potentially failing."

------
jaylevitt
One of the most interesting lessons from "Founders at Work" is that for
everyone who built their desks out of wooden doors, there was another startup
with Aerons. For every company with a rigid process, there was another with
rough consensus. Bootstrapped? VC-funded. Comp-sci genius? Journeyman coder.
You get the idea.

There's more than one way to do it.

------
sgentle
This is a nice article, but I don't really like the ending. "Everything is
really complicated, so don't try to predict it or think about it too hard"
isn't a particularly uplifting message, and there's not even much reason to
think that it's true. Perhaps it's a mistake to generalise too much from the
success of a few companies, but if we're not trying to generalise at all, what
hope do we have of improvement?

I'd like to quote from a really fantastic book, The Art of Game Design by
Jesse Schell, a section called "Waiting for Mendeleev":

 _Unfortunately, at present, there is no “unified theory of game design,” no
simple formula that shows us how to make good games. So what can we do?_

 _We are in a position something like the ancient alchemists. In the time
before Mendeleev discovered the periodic table, showing how all the
fundamental elements were interrelated, alchemists relied on a patchwork quilt
of rules of thumb about how different chemicals could combine. These were
necessarily incomplete, sometimes incorrect, and often semi-mystical, but by
using these rules, the alchemists were able to accomplish surprising things,
and their pursuit of the truth eventually led to modern chemistry. [...]_

 _I wish we had one all-seeing lens. We don’t. So, instead of discarding the
many imperfect ones we do have, it is wisest to collect and use as wide a
variety of them as possible, for as we will see, game design is more art than
science, more like cooking than chemistry, and we must admit the possibility
that our Mendeleev will never come._

~~~
davidw
> isn't a particularly uplifting

Not everything that is true is uplifting.

If it were easy, you could just outsource business creation to some low-paid
workers, with clear rules about how to go about doing it.

Instead, it's basically hill-climbing with some intuitive leaps. Not to say
that the process can't be improved some, but it's always going to be _hard_.

------
adamtmca
This is a nitpick but the author has missed the historical context of Eric
Reis's lean startup methodology.

"It was Japanese management theory in the 1980s. A few weeks ago, before our
collective attention shifted to the Facebook IPO, it was whatever Steve Jobs
had done, from hallucinogens to yelling at your employees."

His link for Japanese management theory points to "theory x" but what it
should point to is the toyota production method. Eric Reis's lean startup
methodology is a repurposing of lean production methods pioneered by toyota.
It's an extension of the same management theory, not just a random fad in
business thinking.

------
danielharan
"The factors that appear to make a business successful change from week to
week, article to article, tweet to tweet, blog post to blog post."

While our perception of the leading indicators of success may be changing from
week to week, the fundamentals of good business stay the same: sell stuff at a
profit. Many things can get in the way of that: bad markets, feuding founders,
incompetent execution, poor timing, etc...

~~~
njharman
Maybe it's not "good business" but many successes and countless hordes are
trying to be acquired and cash out. There a many other ways to get acquired
other than for selling stuff at a profit.

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sycr
Alex, I enjoyed reading this tremendously. As a young guy, somewhat skeptical
of anyone who claims authority on these matters, I grok you here:

 _I am not a business person. I don’t know what makes a good business. It
seems like it helps to have a good idea, great people, the willingness to work
hard, and an absolute shit-ton of luck. Being certain about much beyond that
seems, well, a bit crazy to me._

------
janlukacs
You have to agree with the guy. "Process Cults emerge, putting more faith in
ritual than in ideas." - a very dangerous thing.

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paulhauggis
Everyone seems to want the get-rick-quick idea. What I've learned over the
last couple of years is that to be successful, you need to keep evolving your
idea(s) with your customers/users until you have something of value.

This also involves failing. You need to push something out there to see if
it's what people want and you can't be married to any one idea. Some people
get really lucky and hit on everything in the first pass, but this is the
exception rather than the rule.

mixergy.com is also a great place to see examples of this. I'm not affiliated
with the site, but I'm a huge fan.

------
wnight


