
Tech Startups Don’t Need the Valley Unless They Need VC - jasonlbaptiste
http://gigaom.com/2009/03/15/tech-startups-dont-need-the-valley-unless-they-need-vc/
======
jasonlbaptiste
It's one reason to go to the valley, but not the only one. When I moved to the
valley last year, everyone asked me why? I said "People". Those people could
be new friends at other startups, future talent for my company, future
informal advisors, potential investors, or an awesome bartender at the Olde
Pro in Palo Alto. The Valley exposed me to people that I couldn't have met
anywhere else.

If you love technology and startups, you should probably give it a shot out
there. Just because you move doesn't mean you'll have magic VC genies grant
you three rounds of funding. You will definitely meet some awesome people
along the way.

~~~
zhyder
Agree about the other benefits in addition to access to VCs, but it's still
arguable if they're worth the higher cost of living. If you're a bootstrapped
startup, you'll hit ramen profitability much sooner elsewhere. When you have
an infinite runway, you'll have infinite time to find people as well :).

~~~
pg
Living in the Valley is not especially expensive for founders. _Buying_ a
house in the Valley is notoriously expensive, because there is so much
speculation built into prices (even now). But renting a two-bedroom apartment
in Mountain View is no more expensive for equivalent quality of life than in
Boston.

We gave groups the same amount of money in Boston cycles as in Bay Area
cycles, and we never noticed any difference in how long it lasted.

~~~
staunch
It may be similar to Boston, but it's far more expensive than living in many
other parts of the country (or state).

~~~
jacoblyles
My father's mortgage payment in North Carolina is one-third of my (shared!)
rent payment in San Diego.

When I hear of my younger friends buying houses back home, I am reminded of
the real monetary costs of the life I lead.

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sachinag
Your probability of success is higher in the Valley. Doesn't mean you can't be
successful elsewhere. I don't understand why people can't reconcile these two
statements.

If you like your lifestyle where you are, by all means, stay. If you can find
investors, lawyers, and accountants (assuming you want them) that you trust,
stay where you are.

But if you're just a couple of crazy kids with a work ethic and an idea to
change the world, and if you are willing to do everything possible to give
your startup the highest probability of success, go to the Valley.

~~~
patio11
_Your probability of success is higher in the Valley_

Your probability of flipping heads is higher than your probability of rolling
1 on a six-sided die: X = .5, Y =~ .167. I have yet to even hear of a good
setup for _measuring_ X or Y, to say nothing of actual _numbers_ for them, for
measuring "probability of success in a startup". Heck, I have never even heard
a defensible universalizable definition of _success_ for a startup.

Incidentally, and this has always bothered me about statements like "give your
X the highest probability of Y": do people routinely get the opportunity to
run a simple random sample of startups, marry a simple random sample of women,
raise a simple random sample of children, etc? No? Then why do we bastardize
statistics in this manner.

~~~
sachinag
Look, you get one bite at the apple per idea/situation. A random sample isn't
an appropriate counter-factual. Your job as an entrepreneur is to maximize
your chances for success given the situation at hand.

I suppose "chances for success" wouldn't have set you off, and I acknowledge
that. But we're at the point where we mock people for using "beg the question"
incorrectly and ignore the substance of the argument, which isn't really
productive for others reading this thread.

~~~
trapper
The only people I have heard that say this, travelling around the world,
meeting multiple 9+ digit exit entrepreneurs and tons of 7+, are the ones that
started in SV.

I tend to think based on what I read that there are a lot more large exits
inside SV than outside. But, there seem to be a lot more early deaths and me-
too companies there as well.

Are you optimising for the wrong solution (insane exits)?

[edit: early deaths = companies, not people]

------
vaksel
I disagree. Have you taken a look at the culture in the valley? They are all
about helping each other.

i.e. I think this story was told at LeWeb.

Seesmic founder lets Friendfeed guys know that their products would work
really well together. The Friendfeed guys call back and tell him to drop by to
discuss it. Loic hops into his car, drives 10 minutes to the Friendfeed
offices, and after an hour or so of meetings, Friendfeed adds Seesmic to their
site.

Outside of the valley, something like this isn't possible. The spirit of
startups lets companies be a lot more relaxed and open to new possibilities.

~~~
axod
>> Outside of the valley, something like this isn't possible.

We do have email, IRC, etc etc these days.

~~~
neilk
Agreed, but it's way slower at building trust. Especially compared to the
opportunities people have in the valley to socialize outside of some deal-
making session.

~~~
axod
Not in my experience, the example given was a "link exchange request". These
go on all the time over email, and work pretty well.

Perhaps it's just me, but I often prefer dealing with people over
email/IRC/etc than face to face for a lot of things.

------
blackguardx
Some people like Silicon Valley, some people don't. To each his own.

Silicon Valley has a huge population of smart tech workers. There are
certainly advantages to running a tech startup there. Other aspects of the
area detract from the quality of life, however.

I live in the bay area, but can't stand Silicon Valley's feeling of endless
suburbia. I don't think strip malls and sprawling apartment complexes make a
good living environment for me. Some people prefer it, however. Silicon Valley
is for them. It is not for me.

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garply
The guy in the video makes a point about external funding: a lot of well-
known, large tech companies accepted money only after they were already
profitable and did so in order to expand. That seems really sane to me -
capital seems like a magnifier for a process that either produces money or
consumes money. I suspect a lot of companies that succeed with external money
would have succeeded without it and that a lot of companies that fail without
external money would have failed with it.

------
menloparkbum
There is not much substance to this article. It doesn't really even build on
the title. It's just a bunch of quotes about VC funding and startup culture by
a couple bloggers who live in Wisconsin and China. And, a video of a random
investor from Texas.

I feel like they're riffing about an imagined startup culture that died out in
2001.

~~~
dejb
Maybe it isn't what you meant but to me you post comes off as... "What would
they know. They aren't from the valley"

~~~
menloparkbum
I really just meant what I posted - there isn't much to the article.

On the other hand, there is some truth to your comment. Aside from the guy who
lives in China, there wasn't anything that suggested the authors had even been
to California.

There are real disadvantages to living in Silicon Valley, and they didn't
mention any of them. Instead, they brought up things like work culture and
being showered with VC dollars, which actually aren't the big problems.

------
jdrock
"..and forces entrepreneurs to build a startup that can make it as a business
from day one."

I think the conclusion borders on comedic. Only a miniscule # of companies
should not be thinking of this way.

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racy_rick
This inspired me:

Looking for a great city to start you startup?
<http://news.ycombinator.com/item?id=518379>

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rjurney
Silicon valley is unacceptable because Norcal has great white sharks, which
scare the pants off me and I can't live by the ocean and not surf :(

------
macco
Of course tech startup don't NEED the Valley, but to me(German resident) it
seams that the Valley is a good place to be for a tech startup.

------
mattj
Is it surprising in any way that a bunch of people not from the valley say
that being in the valley isn't important?

~~~
paulgb
No more surprising than the fact that so many people in the valley say being
in the valley _is_ important.

I notice that in the bay area, or at least SF, "startup" is assumed to mean a
web site or web app of some sort. So when I hear claims that the bay area is
the best place for a startup, I don't necessarily disagree, but I parse
"startup" as "web app startup".

