
San Francisco's Real Startup Secret Sauce - melindajb
http://www.inc.com/philip-rosedale/start-up-magic-of-san-francisco.html
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aashaykumar92
_"second, there is a far greater level of information sharing between
entrepreneurs here. Putting a sharper point on that second one: In New York
City they ask you to sign NDA's, and in San Francisco we don't. And what may
feel a bit risky for the one turns out to have a big positive benefit for the
many._

I think this is such a huge, and excellent, point that most other "Why Silicon
Valley is the startup hub" arguments miss. The idea of openness is simply
taken for granted in the bay area while the rest of the world still lives in
fear of someone stealing their idea if they say too much. And it goes beyond
that. Two simple examples, both YC companies actually: Airbnb and FlightCar. I
am from Pittsburgh but go to school in Ann Arbor. I've talked to friends from
both cities about each of those startups and I get the same response every
time, "But would you really give up YOUR place to a stranger?" or "Would you
really want to give up your car to a stranger?" Airbnb takes me a little less
convincing now that it is so successful but FlightCar, holy shit...I am told
that I am way too trusting and quite crazy. So in whatever way you look at it,
the sharing culture is something that is embraced in the bay area while the
rest of the world is just starting to catch on to it.

Now that I mentioned that I'm from Pittsburgh, I'd also like to nix the
'Stanford is a great engineering school" argument as well. Why? Well because
so is Carnegie Mellon--has boasted the #1 Comp Sci program in several rankings
but Pittsburgh is galaxies away from the bay area in being a startup hub.

Playing devils advocate, however, I do feel that a city like Pittsburgh may
also have the greatest chance of booming into one given that a great school
such as CMU is based here. Look at it this way--right now, almost all CMU CS
students interested in startups, whether their own or to be a part of one,
want to get to get to the west coast. What if they all started to stay here? I
think you'd naturally see a boom of startup culture here. Just a hypothetical
thought/situation.

~~~
GuiA
I've signed a number of bullcrap NDAs in SF and the valley– small and large
companies alike.

This is just romanticizing the valley.

~~~
dasil003
It's a question of degree. Obviously there is still _some_ secrecy (see
Apple). But I can't argue with the general culture of information sharing
being much more prevalent in SV than elsewhere, and I've spent my career split
between Mountain View, Minneapolis, Santa Fe, and London, so I think my
anecdote carries some validity.

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czr80
SF is a startup hub because it happened to get a little traction from a few
early companies, and then network and scale effects helped it take off. Same
reason Detroit was once a big auto hub, China is today a big manufacturing
hub, Facebook the biggest social network, etc.

Once a regional agglomeration like this is established, it's hard for someone
else to match (just like it's hard to set up a new Facebook).

And, also, once such a hub is established, people of course look for reasons
to explain why it won. Mostly they're hagiographic "just-so" stories, of no
real benefit to anyone looking to replicate it.

------
aantix
I moved to SF in Sept of 2010.

My wife and I went to the Folsom St fair because we were determined to
experience what we couldn't experience back home (Nebraska).

Might I say, a fair like that would have been SHUT DOWN WITH SWAT TEAMS in
Nebraska. I can't imagine anything remotely close to that being tolerated.

It didn't bother my wife or I, but when the extremes can be stretched pretty
far with a general tolerance, you find that the middle is further than away
from most people's average.

I don't know how the tolerance for the extreme factors in to things, but I
think it's at play with SF's success..

P.S. If you want to experience it, it's usually in late September. Do it once
in your life.

~~~
rdl
Right, but Palo Alto/Mountain View are pretty much like Nebraska in terms of
what you'd see on the street (super-rich Nebraska, though), and they also have
plenty of startups, so it's not just bare hairy man ass that generates
startups.

------
programminggeek
I think there is something else about the startup culture of Silicon Valley
that I don't see in say the midwest and that is the understanding of what a
startup is - and it's not just a new tech business. As PG wrote Startup =
Growth <http://www.paulgraham.com/growth.html>

What strikes me as a Silicon Valley outsider is the idea of 5-7% growth
rate... per week. Comparing that to companies outside of the valley that grow
that per year or per quarter and call themselves a startup and you see that
there is something fundamentally different going on in the cultures.

That growth oriented/obsessed mindset I just don't see in the midwest. Things
move slower, can be less numbers driven, and it's far less about the big exit.
There's nothing specifically wrong about that approach, but it's not the same
startup mindset as YCombinator has. If the bar to being a successful startup
is 5-7% weekly growth, than many/most non Silicon Valley areas don't have the
same high bar for startups as SV does.

Having a high density of quality people is great, but isn't not just the high
density of people who are doing startups, so much as a high density of people
doing rapidly growing companies. It's not just the tech, it's the marketing,
the relationships, all of that.

It's also possible that Startup = Growth is one big marketing lie and Silicon
Valley is just lucky, but I doubt it.

~~~
greghinch
I would argue that _any_ successful small business that could be considered a
startup is growing _some metric_ much faster than 5-7% per year. Likely
somewhere close to the per week rate. You just have to pick the right metric.
What you're referring to is likely a 5-7% growth in revenue per year, and that
can be surprisingly good. There are probably "successful" YC companies that
aren't growing their revenue that quickly for the first couple years. But some
other KPI is going crazy.

~~~
programminggeek
Sure, I'm just saying that there are plenty of companies that think of
themselves as startups that don't have KPI's growing at 5-7% a week or even a
quarter, unless they invent some metric that makes them look good even if the
needle isn't moving.

~~~
greghinch
Right but then they are probably mis-classifying themselves as startups,
rather than small businesses. That's one of the points of "Startup = Growth",
if they aren't going for major growth, they aren't a "startup".

It's not a matter of saying "startup" is better than "small business" (despite
the underlying tone you may feel on HN), it's just a way to classify how the
businesses are being operated, and how each can define their own success. All
startups are also small businesses, but not all small businesses are startups.
If your small business _isn't_ chasing that kind of rapid growth, calling
yourself a startup is a misnomer.

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hendzen
Contrary to what is said in the article, I find that NDAs are fairly pervasive
at Bay area tech firms - maybe with the exception of very early stage
startups.

At most of the big co's you have to sign an NDA just to walk past the front
desk to attend an event on their campuses or to interview.

I also experienced this at a well known late-stage SF startup when they hosted
a developer meetup in their office.

~~~
gkop
> I also experienced this at a well known late-stage SF startup when they
> hosted a developer meetup in their office.

That form is not what I think of when I think of NDA - it's one very brief
page. And they don't review what you write. In fact one staff member said
"Just print your name" when questioned by a guest. I see it more as just a
reminder for guests to behave themselves.

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logicallee
San Francisco's real startup sauce is people with fucking imagination. Try
this experiment anywhere in the world

"Hey, I've written this great thing that can change millions of people's
lives. I'd like to start a company around it!"

Typically you can expect:

"With what?"

"What makes you think you can run a company?"

"You're, what, 27?"

"There are teams of dozens of people who can do the same thing, why would you
succeed where they can't?"

"Even if you do the work that literally thousands of teams all over the
country can do and have actual resources for, what will you do next, you don't
have a company"

"Even if you make sales, you are losing way more money than you could by just
working as a coder. You're delusional".

"Let's say you get some customers and make more than you would otherwise. You
still don't have a business. You haven't run a business! Would you enlist in
the olympics without ever having even TRIED the sport?"

etcetcetc

versus San Francisco typical reaction:

"Can I see it?"

~~~
potatolicious
I think that's dramatically over-romanticizing the startup scene.

> _""Hey, I've written this great thing that can change millions of people's
> lives. I'd like to start a company around it!"_

I've been pitched a _lot_ of startups before, in San Francisco and elsewhere.
I have _never_ heard this line _even once_.

The _vast_ majority of founders (in SF or elsewhere) want only one thing:
their big exit. They couldn't give two shits about changing the world,
disrupting some huge evil industry, or anything like that. They want to get
theirs, and any type of righteousness in their message is just posturing.

To portray SF like it's some sort of haven for young people who want to change
the world is grossly inaccurate. It's not like that in SF, it's not like that
anywhere.

Sure, once in a while you get something that genuinely seems to be a work of
passion. Github is a nice example. For ever Github you have to wade through
two dozen yet-another-photo-sharing-app, yet-another-social-location-mobile,
etc etc, who are all in it for the me-too and the get-rich-quick.

San Francisco is a _very_ small number of people trying to change the world
while a whole _lot_ of other people ride along, posture a bit, and hope they
get mistakenly swept along for the ride.

------
dools
Making it less risky to work on risky things is exactly why I think socialism
is great for business.

Australia is often called out for it's "lack of startup eco system", and lack
of early stage capital for tech businesses, however it's a hotbed of
micropreneurship and the primary reason is that no matter what, you've got a
reasonable level of healthcare, your kids have a reasonable level of education
and you have a reasonable level of housing.

I started from (financially) _virtually_ nothing. I mean ... let's be honest
everyone says that and yes I had advantages others didn't have and my family
was essentially middle class but financially speaking I was always essentially
what you would call "poor" and raising 2 daughters whilst being this poor and
not having a "real job" for the past decade would be much scarier in the US
than it is in Australia.

The benefit to the country is that ultimately, I have the chance to build
something great which creates jobs and grows the economy (yeah ... I'll urr
let you know when that's done!) but if I fail, it's no big deal really.

------
kevingadd
NDAs are alive and well in Silicon Valley even if VCs don't get asked to sign
them. I've interviewed with dozens (if not hundreds) of companies here and
given product/engineering advice to dozens of other companies and in almost
every case, once a real conversation is going to start they want a signed NDA.

I don't even think there's anything wrong with that, but I've not noticed any
difference in terms of secrecy between the SV software companies I've talked
to and software companies outside of SV (in places like New York, Seattle, LA,
etc.)

~~~
kunle
I think what he's getting at with the NDA point is the start of the
conversation. As an ex-finance/NYC guy, you see this all the time in New York
(thankfully its getting less frequent but I just had it happen again the other
day): you meet a founder, he/she has an idea, and in order for him/her to
share the idea, they ask you to sign an NDA. Just to hear the idea. Happens
with alarming frequency.

~~~
michaelochurch
_[Y]ou meet a founder, he/she has an idea, and in order for him/her to share
the idea, they ask you to sign an NDA. Just to hear the idea. Happens with
alarming frequency._

I just don't talk to those asshats.

If I were going to steal something, it would be the resources to implement
_my_ ideas, not theirs.

------
qwerta
With internet you can run your startup anywhere on planet. Why would you
choose the most expensive area on planet? You could be on tropical island for
fraction of the cost. Also smaller costs gives you longer runway, it is big
difference to have 3 months or 3 years.

------
herdrick
That SF map is bullshit. In general you would never see such an even spacing
of startups (or most anything) unless someone were trying distribute them very
carefully. And specifically there are a number of super dense hotspots that
should stand out in a map like that. Someone just painted those dots according
to what might look good.

------
6ren
my _tl;dr_ :

    
    
      the magic of Silicon Valley is making it *safe* to work on *risky* things.
      reduce the risk of failure by having a lot of people around who will hire you next

------
michaelochurch
Money. That's all.

You can find smart people all over the world. What you can't find is easy
money, in large quantities, looking for outsized returns.

New York and Silicon Valley have a critical mass of people who have enough
money to put into high-risk endeavors. In New York, they give money to young,
eager people who start hedge funds. In Silicon Valley, it's "tech".

Actually, venture capital funds tend to lose money, but that's another story.
It's kind of amazing that with all the illegal collusion and note-sharing (I'm
sorry, I mean "co-funding") they do, the industry still can't turn a profit.

