

Why Seed Funding Isn't A Regional Business - markbao
http://jasonlbaptiste.com/venture-capital/seed-funding-regional-business/

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zhyder
What would be really great is to have a 'YC of ...' in each different area.
For instance, New York could be the YC of Finance (e.g. startup: private
equity exchange), LA the YC of entertainment (e.g. startup: low-budget TV show
delivered through the web), etc. They needn't be about SW/webapps, but
whichever area they focus on should be cheap enough to at least prototype
something.

Within just the SW/webapps space, it doesn't much sense to have a YC clone in
every US city. But it still would make sense to have a YC clone in -say- India
or China which focuses on the unique needs of its market. (I suspect these
already exist but most of us YC-fundees or YC-wannabe-fundees haven't heard of
them and wouldn't care if we did.)

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mixmax
I don't think this is entirely true.

Great companies have been started, funded and grown outside the valley.
Microsoft, MySQl, Skype, 37Signals, etc. There are more examples than you
might think.

Also, while I'm sure there is a lot of engineering talent in the valley it
isn't unique. Finland, Denmark, India and the baltic states have awesome
programmers and engineers. And they're a lot cheaper, especially in the former
eastern bloc.

~~~
sachinag
Not to be mean, but that's like saying "Since Obama was elected president,
racism is no more." You can't point to exception cases and be like "all done".
You have to look at things in aggregate and at the trend lines. And those
things show a preponderance of the necessities for a startup culture in the
Valley and in few other places.

~~~
mixmax
I think there's a lot of groupthink going on in the Silicon Valley
echochamber. The examples I came up with were just on the top of my head, not
outliers in any way. Here are a few more just for kicks.

fogbugz, Alcatel/Lucent, Ericsson, Nokia, Siemens, Avid, IBM, Ubisoft,
Research in motion, Sierra, Kazaa, Joost, Dell.

The tech-world doesn't revolve around Silicon Valley. There are actually other
tech hubs, and there are important tech companies being started in other parts
of the world. The valley is important, but not _that_ important.

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rjurney
I wanted very badly to think this wasn't true... but it is true.

~~~
jasonlbaptiste
So did I. Starting a YC like thing in your town isn't easy, but it's not
impossible. It's letting the companies grow up and keeping them in your city
that usually borders on impossible.

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alaskamiller
I'm going to coin this acronym: YACEP, as in, yet another chicken/egg problem.

But sometimes it's not even about having enough talent or enough gasoline.
Sometimes, sociological reasons prohibits the growth of multiple fledgling
startups in area.

One bit of data I want to offer is Pittsburgh, PA. Pittsburgh has both the
distinction of having two top-notch universities (CMU and Pitt) and an
emerging early-stage seed incubator. But they're having trouble getting the
startup culture going because the talented engineers and developers just don't
plain don't want to stay in the city, or they get hired for research/corporate
work right away. Those college grads actually prefer _that_ rather than
working in a startup. You can try to sell them the Silicon Valley dream
without the Silicon Valley all you want but if the mentality isn't there it's
going to take a lot more convincing than from just the school, the city, or
the investors. The rest that do stay have to compete that much harder to deal
with external factors affecting their success than they would get instead of
just moving to Silicon Valley in the first place.

But you're definitely right: time is the only thing that will change this.

~~~
dbul
_just don't plain don't want to stay in the city_

I'm not so sure it is that as much as...

 _they get hired for research/corporate work ... actually prefer _that_ rather
than working in a startup_

Most of the CMU nerds want to work at the best companies for stimulating their
intellectual minds. I suspect people who get accepted to CMU recognize its
capacity for strengthening your inner nerd, and so those are the types who go
there: people who can maximize their time thinking about difficult computer
science problems.

AlphaLab, I presume the seed funding organization you refer to, is going about
it all wrong. They are trying to be a copy of YCombinator, and I'll challenge
them to a debate if they think otherwise. What they ought to be doing is being
more open to the startup community at large to the point where all of the
startups in Pittsburgh and all of the investors in Pittsburgh are in one room
hobnobbing. So far I have yet to even have met anyone affiliated with
AlphaLab. They had some lame happy hour kind of event at their facility _once_
in the last few months, but I left when the director started to waste our time
with a presentation which I could have (already had) absorbed via the
information on their website.

I've overheard a few comments from investors here. One said something along
the lines of, "AlphaLab expects you to invest a couple million in some
companies who give 10 minute presentations? Get real." This tells me the
adaption to the trend of angel investing isn't happening here. Another
investor, when I mentioned the startups in Pittsburgh he replied, "Yeah. There
are not enough."

One solution, as I mentioned, is creating the illusion of a startup scene.
Just have weekly events and do what you have to that people will actually go
to them. Don't waste their time. Carnegie Mellon has a Pre-college program.
These are kids who end up going to UPenn, MIT, Stanford, Cornell and so on.
That is, they are there because CMU is one of the best schools for computer
science so why not get a sample of what it is like there. So, if incubators
like AlphaLab actually helped the startup scene _seem_ as though it exists,
those Pre-college students may decide they like it and choose to go to CMU
over MIT (let's say Stanford rejected them by chance) because they feel a
strong sense of a startup environment.

